Setting up accounting software takes about twenty minutes if you accept every default. Those twenty minutes generate most of the cleanup work we see three years later.
Six decisions do the damage.
1. The start date
Pick a date and commit to it. The beginning of a fiscal year is cleanest; the beginning of a quarter is workable.
What causes problems is a vague start — importing "some" history because the bank feed offered ninety days, without deciding whether the file begins there. You end up with a partial first period that is neither a full year nor a clean opening, and every year-over-year comparison through it is broken.
2. Opening balances
The single most-skipped step. On your start date, every account had a real balance: cash, receivables, payables, loans, fixed assets, equity.
Skip this and the file begins from zero, which means the balance sheet is wrong from day one and stays wrong. The tell is a balance in Opening Balance Equity — it should be zero once setup is complete. If it is not, something did not get entered.
3. The chart of accounts
The default list is generic by necessity. Replace it with one built around the questions you actually ask.
The important structural decision is cost of goods sold versus operating expenses, because that split produces gross margin. Direct costs — what scales with delivery — belong in COGS. Overhead belongs below it. Getting this wrong makes the most useful number on your P&L meaningless.
Err toward fewer accounts than feels right. Forty expense accounts produces inconsistent coding, and inconsistent coding is worse than coarse coding.
4. Bank feeds and rules
Connect the feeds, then be conservative with rules.
A rule that miscategorises does so at scale, silently, hundreds of times. Build rules only for vendors where the categorisation is genuinely unambiguous — the utility company, the rent payment. For anything variable, review beats automation.
And connect every account, including the ones with little activity. Accounts nobody connected are accounts nobody reconciles.
5. Products, services, and the second dimension
If you want to know what sells, revenue has to be recorded against items rather than typed straight into a revenue account.
This is also where you decide whether you need classes, locations, or projects — a second dimension that lets you slice by segment without multiplying the account list. Deciding later is possible; applying it retroactively to two years of transactions is a project.
6. Who owns the file
The subscription and the primary admin should be the business, on a business email address. Not your bookkeeper's account, not a personal address.
This sounds administrative until someone leaves and the file is attached to an account nobody can reach. It is the most avoidable crisis in this entire list.
The verification step
Before relying on the file: run a balance sheet as of the day before your start date. It should be empty. Run one as of the start date — it should match the opening balances you entered. Then reconcile the first month.
If those three checks pass, the foundation is sound. If they do not, fix it now, while there are four weeks of data rather than four hundred.
Our team are QuickBooks ProAdvisors, and this is what setup and onboarding covers. If you are moving from Desktop, that is a related but distinct job — see migration, where the concern is verifying that balances tie across the cutover.
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