QuickBooks Online makes it easy to send and track invoices and payments, pulling details directly from your account to populate business and client information, payment terms, sales tax, product lists, and payment options.

Before you send your first invoice, it’s important to fully set up your account to avoid potential errors and delays in getting paid.

When you open an account, Intuit will walk you through the setup process. For paid plans, that includes AI-powered intelligent onboarding with access to an expert who can help if you hit any snags. But if you’ve signed up for a QuickBooks Free account or you prefer to do it yourself, here’s how to get set up.

1. Start with your company settings

Every invoice you send will provide key details about your company and how it operates. You likely entered a lot of those details when you opened the account, but it’s worth confirming and adding anything you missed.

Confirm your company profile

To do this, log in to your account and navigate to “Settings” > “Account and settings” > “Company.” Here’s what you can confirm or add:

• Legal business name
• Business address, phone number, and email address
• Employer identification number (EIN)
• Company logo
• Tax information

Choose cash or accrual accounting

With the cash accounting method, QuickBooks will record your income when you receive the payment, while accrual accounting counts it when you send the invoice.

The accounting method you choose will also affect when you make sales tax payments. For example, let’s say you send a $2,000 invoice in January with 7% sales tax, and your customer pays half in February and the other half in March.

With the accrual method, you’ll owe a sales tax payment in January because that’s when you sent the invoice. Meanwhile, the cash method will have you making two separate sales tax payments in February and March, when you receive the payments.

You can set your accounting method under “Settings” > “Account and settings” > “Advanced” > “Accounting.”

Set up sales tax

If you sell taxable products or services, QuickBooks will add it automatically to your invoices. Before you get started, register with your state’s tax agency. If you have a physical presence in more than one state or you earn a certain amount of revenue in a different state, you may need to register with each state’s tax agency.

In some states, you may also need to register with your city, county, or special tax district.

Once your registrations are confirmed, you’ll log in to your QuickBooks account and go to “All apps” > “Sales Tax” > “Overview” > “Use automatic sales tax.” Confirm your business name and address, then tell QuickBooks whether you plan to collect sales tax in another state.

You’ll then enter each agency to which you’ll pay sales tax, and QuickBooks will add the correct rate to your invoices.

2. Set up your accounts, products, and customers

Setting up these details ahead of time will save you from needing to reenter the same information on every invoice you send.

Set up your chart of accounts

QuickBooks builds your chart of accounts when you create your company file, based on your business entity. The income accounts in that list determine how your sales are grouped on your profit and loss report.

For many businesses, the default accounts may be sufficient. But if you want to track certain revenue streams, such as product sales and consulting fees, separately, you can customize your chart of accounts accordingly.

You’ll do that under “All apps” > “Accounting” > “Chart of accounts.” It’s also possible to create subaccounts for even more customization. That said, each plan caps the number of accounts you can have, so you may need to make some adjustments.

Add your products and services

Go to “All apps” > “Sales & get paid” > “Products & services” to add each product and service your business provides. For each one, you can include:

• A name and a description customers will see on the invoice
• The price or rate
• The income account that tracks the sale
• Whether the item is taxable

Note that if your rate varies by job, you can leave the rate field blank and then fill that in for each invoice you send. You can also edit items later, if needed.

Add your customers

When you add customers ahead of time, you can select the one you’re billing, and QuickBooks will populate the invoice with their information. You can do this under “All apps” > “Customer hub” > “Customers & leads.”

You’ll start by entering the customer’s name, then you can add other details, such as billing and shipping addresses, taxable status, email address, payment methods, and payment terms.

3. Set your invoice terms, template, and payment options

With everything else in place, the last step is determining what your customers will see and how you’ll get paid.

Set default payment terms and reminders

Payment terms, such as net-15 or net-30, tell your customers how long they have to pay your invoices. You can set your payment terms on the “Sales” tab under “Settings” > “Account and settings.”

This section will also allow you to set up progress invoicing, as well as automatic reminders. You can schedule and send email reminders up to 90 days before or after the invoice’s due date. You can also send second and third reminders, if necessary.

Customize your invoice template

To choose which fields your customers see, select “Create” > “Invoice” to open a new invoice. From there, select “Manage” > “Customization,” which will allow you to turn certain fields, such as shipping fees and discounts, on and off.

You can also use the “Design” feature to change the look of your invoice, including the color and font.

Turn on online payments

You can choose to let customers pay you directly from the invoice by card, bank transfer, or digital wallets like Apple Pay, PayPal, and Venmo. To do this, visit the “Payments” tab under “Account and settings” to sign up for QuickBooks Payments.

Just keep in mind that QuickBooks charges 2.99% for payments made by cards and digital wallets and 1% for ACH bank payments.

If you’re on the QuickBooks Free plan, using QuickBooks Payments allows you to send unlimited invoices rather than the standard two-per-month limit.

4. Connect your bank account

You’re not technically required to link a bank account to QuickBooks Online to send an invoice, especially if you arrange payments from customers outside QuickBooks Payments.

However, if you want to use QuickBooks’ online payment options, you’ll need to connect your bank account first. Doing so will also allow Intuit to directly import and categorize transactions for you.

If you have a QuickBooks Free account, you can link a single bank account, while paid plans allow unlimited accounts.

The takeaway

Setting up your QuickBooks Online account for invoicing can take some time, but it’ll save you from having to reenter the same information over and over again with each invoice you send.

Once your company profile, products and services, sales tax, chart of accounts, customers, invoices, and payment methods and terms are set up, each new invoice will take just a few clicks to send.

Keep in mind, too, that you may need to continually update your invoice setup every time you add services, change prices, add new customers, and sell in new states. Stay on top of the process to avoid potential mistakes and delays.

Frequently asked questions

How long does it take to set up QuickBooks Online?

Once you sync your bank or credit card transactions, getting the basics up and running takes just five minutes, according to Intuit. However, getting invoicing set up can take longer, depending on your situation.

Can I send an invoice before I finish setting up QuickBooks Online?

Yes, you can send invoices, even if you haven’t finished setting everything up. However, if you skip certain steps, such as confirming your company details, adding payment terms, or setting up sales taxes, your invoices could go out with missing or incorrect information.

Can I change my accounting method?

Yes, you can change your accounting method in your account settings. That said, the Internal Revenue Service (IRS) generally requires businesses to use the same accounting method from year to year, and you need to obtain approval from the federal tax agency to make a change.