S6: ICT in Accounting

     Key unit competence: Create company profile in QUICKBOOKS 

                                                    software  

Introductory Activity

In today’s business environment, most financial accounting systems have 
been computerized and automated in such a way that papers are not needed 
or needed less and less. Mr NGOGA Frank is an accountant in ABC Ltd. 
His day to day activities is to identify and record, classify, summarize, analyze 
and interpret financial transactions of the company in a significant manner 
and in terms of money, transactions and events which are in part of financial 
character, and interpret the related results. Mr NGOGA Frank uses a manual 
book keeping accounting system. This causes him a low performance in 
terms of providing timely financial information to the different users for rational 
decisions. To overcome this, the owner is suggesting to shift from manual book 
keeping system to computerized accounting system.

       a) Advise him on accounting software that can be used by the company.
       b) Do you think the software will help them to handle the challenges? 

        Explain.

1.1 General overview on QuickBooks 

              Activity 1.1

Holly city Technology Ltd has a paper-based database and wants to have a 
computerized one to use to keep all its customers, suppliers and third parties’ 
data. Every day Director of Holly city technology Ltd faces different challenges 
of properly keeping customer’s data because of the system they use which is 

a paper based database and Microsoft Excel program.

By analyzing this scenario answer the following questions:
      a. Advise him on the software the company can use for solving the above 
           challenges

     b. Differentiate a paper-based database from a computerized database

QuickBooks is one of the most popular accounting software for small 
businesses. Moving from manual bookkeeping or spreadsheets have grown 
into many problems, difficulties, obstacles and businesses need a better option 
compared to other current software. 

QuickBooks can be a good choice for small and medium businesses. It is best 
known for its bookkeeping software; it offers a range of accounting and finance 

solutions for small businesses. 

                     1.1.1. Key concepts

a. Accounting: Accounting is a process of identifying and recording, 
classifying, summarizing, analyzing and interpreting financial transactions 
of an entity for a certain financial period. 

b. Accounting cycle: Accounting cycle refers to a series of steps followed 
by companies to systematically process financial information from source 
documents to the preparation of financial statements on a monthly, 
quarterly, and/or annual basis. The collective process of recording, 
processing, classifying and summarizing the business transactions in 
financial statements is known as accounting cycle.

c. Manual Bookkeeping: This is a way of recording business activity 
transactions without using a computer system with specialized accounting 
software. In this way, transactions are registered by hand in accounting 
books, using a written ledger of transactions, physical records, pads of 
paper and books.

d. Computerized accounting: Computerized accounting system is an 
accounting information system that processes the financial transactions 
and events as per Generally Accepted Accounting Principles (GAAP) to 

produce reports as per user requirements

   1.1.2. Use of QuickBooks software in accounting records

QuickBooks provides a number of ready to use templates that business 
owners can use to create invoices, spreadsheets, charts and business plan. 
QuickBooks makes it easy to customize the look and feel of those documents. 
QuickBooks allows the user to look at and manage purchases, sales, and 

expenses in one spot. 

Additionally, QuickBooks helps businesses in the following ways:

• QuickBooks like other accounting is important in digitalization of 
   accounting data
• Simplifies and automates data entry. For example, a point-of-sale 
   terminal may actually become a data entry device so that sales are 
   automatically “booked” into the accounting system as they occur
• Frequently divide the accounting process into modules related to 
  functional areas such as sales/collection, purchasing/payment, and 
  others.
• Is “user-friendly” by providing data entry blanks that are easily understood 
  in relation to the underlying transactions.
• Minimize key-stokes by using “pick lists,” automatic call-up functions, 
  and auto-complete type technology.
• Is built on data-base logic, allowing transaction data to be sorted and 
   processed based on any query structure. For example, producing an 
   income statement for July; providing a listing of sales to Customer
• Provide up-to-date data that may be accessed by key business decision 
   makers.
• Are capable of producing numerous specialized reports in addition to 

  the key financial statements

      Application Activity 1.1

1. Define the following Terms:
      a) Manual Bookkeeping
      b) Computerized accounting 
     c) Accounting cycle

2. Discuss the importance of QuickBooks

1.2. Installation of QUICKBOOKS software 

           Learning Activity 1.2

Holly city Technology Ltd accountant Uwimbabazi bought a laptop which 
doesn’t have any accounting software 
        1. Demonstrate and outline the procedure will be used by Uwimbabazi for 

             having QuickBooks in her computer. 

Installation (or setup) of software is the act of making the program ready 
for execution. Installation refers to the particular configuration of a software or 
hardware with a view to making it usable with the computer. A soft or digital 
copy of the piece of software (program) is needed to install it. There are different 
processes of installing a piece of software (program).

Because the process varies for each program and each computer, programs 
(including operating systems) often come with an installer, a specialized program 
responsible for doing whatever is needed for the installation. Installation may be 
part of a larger software deployment process. 

Installation typically involves code (program) being copied/generated from 
the installation files to new files on the local computer for easier access by 
the operating system, creating necessary directories, registering environment 
variables, providing separate program for un-installation etc. Because code is 
generally copied/generated in multiple locations, uninstallation usually involves 

more than just erasing the program folder.

Common operations performed during QuickBooks software 
installation include:
• Making sure that necessary system requirements are met
• Checking for existing versions of the software
• Creating or updating program files and folders
• Adding configuration data such as configuration files, Windows 
   registry entries or environment variables
• Making the software accessible to the user, for instance by creating 
   links, shortcuts or bookmarks
• Configuring components that run automatically, such as Windows 
   services
• Performing product activation

• Updating the software versions

Steps of installing QuickBooks Software
The following are the steps to install a QuickBooks software in a computer:

Step 1. Open QuickBooks set up icon, then the following window appear:

            

                             Figure 1.1. QuickBooks Install Shield wizard

Step 2: In the Welcome Window that appeared click on NEXT and get the 

              following:

               

                                      Figure 1.2. Welcome to QuickBooks Interface

     Step 3: Tick on “I accept the terms of the license agreement” and click on 

      Next

          

                   Figure 1.3 QuickBooks License Agreement Interface

   Step4: After accepting the terms and conditions of QuickBooks license, 
       activate the QuickBooks Desktop by filling the license and product number 

       in their field. 

          

              Figure 1.4 Field reserved for License Number and Product Number

        After click on Next then the following window of custom and network options 

        will appear. 

        

            Figure 1.5 Interface used for selecting where QuickBooks Desktop will be used

 Step 5: Select whether you will use QuickBooks Desktop on this computer 
(which is the recommended option). Then click on Next. One of the three 
options is chosen depending on how QuickBooks will be used.

Step 6: Choose installation Location 

Click on browse to select the installation location. By default, QuickBooks files 
are saved in local disk C\Program Files (x86) \Intuit\QuickBooks Enterprise 
solutions. But the user can locate it in other locations like on desktop or local 

disk D.

            

                     Figure 1.6 Location of QuickBooks Software 

     Click on install and wait for installation process

       

        Figure 1.7 Interface with QuickBooks installation Progress 

        Application Activity 1.2

Assume you have got a job of being an accountant of five-star hotel 
and the hotel wants to start using QuickBooks accounting software in 
their accounting records. Even if the hotel manager has already bought 
QuickBooks software, it is not yet installed in their computers. You are 
therefore asked to help them to install it.

1. What are the steps will you follow to install QuickBooks in computer?
2. Install the QuickBooks software in one computer in the school 

     computer lab

        1.3. Creating company profile in QuickBooks 

                 Learning Activity 1.3 

ABADAHIGWA COOPERATIVE needs to use QuickBooks in its day to 
day accounting records. It is necessary to ha a full complete profile of the 

company to ensure an easy and clear records of transactions. 

• Suggest to the cooperative the main component of the 
   company profile
• Use your own example to show to the cooperative an example 

    of a full complete company profile

A company profile or company file is where the user stores company financial 
records in QuickBooks. Therefore, it is the first thing to do in QuickBooks. You 
can create a company file from scratch or convert records previously kept in a 
small-business accounting program. It is a tool to use for analyzing the financial 

situation of companies.

To create a company profile, follow this procedure:
• Click on the QuickBooks Home page

• Click on create new company:

             

                     Figure 1.8 Creation of new company

        • Clicking on Expressing Start

       

               Figure 1.9 The beginning of Easy setup of company identification

          After clicking on Expressing Start, an easy setup of company profile interview 

           starts.

            • Complete the easy setup of company profile interview:

           

                           Figure 1.10 Business information interface 

• Fill the business name
• For the industry, click on help me to choose so that the default chart 
   of accounts should not appear in the company charts of company. 

• Select other/none

            

                   Figure 1.11 interface with a list of industry types

The selection of Other/None allows the user to have a free field of charts of 
account so that he can set the appropriate charts of account according to the 
transactions he will be recording.

If the user selects the Accounting or bookkeeping on the field of Industry, 
the default account relating to the selected industry will appear in the chart of 
accounts including the ones the user does not want.
                   

          The field of Business Type should be filled according to the user’s choice. If 
           the user needs to continue by setting his own charts of account, he can select 

          Other / None. Then OK

            

                         Figure 1.12 Details of company information 
  
 Note: For Employer Identification Number use the format xxx-xx-xxxx (Three 
              digits- Two digits-four digits).

           • After filling all fields click on Create the Company

    Then wait for the company creation process until the following window appear            
               

                    Figure 1.13 Interface for adding Business People, Product or Services

In the above window the user adds people to do business with, product or 
services sold by the company and bank accounts. Otherwise, the user may skip 

to start Working tab.

         Then the QuickBooks Home Page interface appears as follows:

            

                Figure 1.14 QuickBooks Home Page interface 

The menu bar has fourteen menus namely: File, Edit, View, Lists, Favorites, 
Accountant, Company, Customers, Vendors, Employees, Banking, Reports, 

Window and Help.

          Application Activity 1.3 

BWIZA Ltd is a small sole trade business of purchasing and selling of 
Eggplants. It is located in NDUBA Sector, GASABO District KIGALI CITY 
(Tel +250788567012-722567012; P.O Box 1123 Kigali). 

BWIZA Ltd is facing serious problems related to the use of manual accounting, 

it decided to use QuickBooks. Create accompany profile for BWIZA Ltd.

   1.4. Customization of company preference

          Learning Activity 1.4 

If the QuickBooks user wants to customize company preferences in QuickBooks 
to fit his personal style and business needs he can do it with the help of 
QuickBooks preferences as long as references permit the users to choose 
how they want QuickBooks to manage things or to set own preferences.
 
• What should be the examples preferences that the user can 
    customize?

• In which process it could be done?

Preferences allow you as the user to decide how you want QuickBooks to 
handle things or set personal or company preferences.

Examples of preferences that the user can customize:
– Age from due date: The overdue days appears on the invoice, 
      statement or bill, that start from the due date that
– Age from transaction date: The overdue days start on the creation 
     date of the invoice, statement or the date of when bill receiving.
– Format: If you click this button, then this button will open the Report 
   Format Preferences window which authorizes you to customize Header 
   or Footer & Fonts and Numbers on QuickBooks reports. You can modify 
   the appearance of the report.
– Reports: Show items by defining how reports display the name of the 
    items.
– Reports: If you need to display account numbers in your reports, click 
    Name and Description or Name only.
– The Classify button: With the help of this button, you can reclassify 

    accounts for the Statement of Cash Flows report

Preferences can be found by going to the top of the main QuickBooks Home 
page and click on Edit and then preferences. Click on Edit Menu, on the 

QuickBooks Home page and find the following window:                

                             

A click on Preferences gives to the user the wide option to customize either his 

preferences or Company Preferences.

               

For example: If the user needs to customize the use of numbers on the 
accounts, he/she must follow these steps:

1. Click on Accounting

                

• Click on Company preference and tick on Use Account Numbers

   and OK

         

  • After clicking OK, check the accounts and see the numbers on the 

          accounts

         

         Application Activity 1.3

1. What is the meaning of customization of company preferences?
2. Give the examples of preferences that the QuickBooks user can 
    customize to suit its work.
3. Present a preferences window where on My Preferences, Payroll & 

    Employees, Only Online Payroll and Last Name are selected. 

   End of Unit Assessment 

1. Define the Installation of software
2. List the common operations performed during QuickBooks software 
    installation
3. MUTARA ENTERPRISE is a small sole trade business of manufacturing 
of furniture items. It is located in KAGEYO Sector, Gatsibo District 
in Eastern Province (Tel +250788567012-722567012; P.O Box 
1123 Gatsibo). MUTARA ENTERPRISE Shop is well known for its 
services performed in Society that attracts customers.

• Use the information above to create a company profile.
• Customize the charts of accounts so that they appear with 

   relevant codes numbers