My newest website is the Automation Field Engineer.com. I’ve got it up and running with all the good plugins.

My goal is that by end of February the website have 500 visitors (in this month alone). Right now we are at 180 visitors.

Many of my website transaction are done through PayPal. To keep track of the transactions in Quickbooks I used to deposit PayPal funds into my bank account all the time so all the transactions were done through bank account to keep tracking easy on Quickbooks.

Here is how to add PayPal as a new account in Quickbooks. This is how I did it. There probably is a better way:

• Go to “Pay Bill”
• Click on “Payment Account”
• Click “Add New”
• Simply don’t put anything for bank routing and account number and call it PayPal.

If you sell anything online and process credit cards online, you receive merchant payments a day (for me with Bank of America) or couple days after the processes in your bank account. Here is how you can report those payments in QuickBooks.

In my QuickBooks, I don’t define every single customer. I have defined one customer as my website and record all transaction (money received from merchant account) under the name of that website. I keep track of every single customer separately.

1. Under “Banking” select “Record Deposits“
2. Fill in the information. Put your customer’s name (the website) and the “From Account ” as “Merchandise Sale” or whatever other forms of sale that you had.
3. The money automatically gets added to your account balance afterward.

Quite a few of bills for an online business are monthly subscription fees. These include subscription payments for things such as:

• Hosting
• Email Marketing Accounts
• Online Tools Services
• Stock Photo subscriptions
• Marketing and SEO services

You can either enter these amounts in QuickBooks every time they are due or setup transactions that automatically get renewed every month to reduce your work and increase accuracy. Here is how:

1. Click on “Enter Bills“
2. Fill out all the necessary fields for your transaction (vendor, fee, due date, account type, etc).
3. Click “CTRL+M” to have QuickBooks memorize the transaction
4. In the Memorize Transaction form you can fill all the required fields to setup weekly, monthly or any other form of recurring subscription. You can also have QuickBooks automatically enter the bills for you at the due dates every month instead of just reminding you.
5. Click on the image to the right to see my settings for one memorized transaction.
6. To retrieve memorized transactions click “CTRL+T“.

Sometimes you might want to enter a transaction that you have already paid. You don’t want to enter the transaction as billed but simply as paid. For this simply un-check the “Bill Received” small box when entering the bill. This way you it will only be saved as a receipt and will count for your taxes at the end of the fiscal year.

In 2008, I didn’t really use anything to track my online income and expenses. I didn’t have much online income so it wasn’t hard to file tax returns for that year. In 2009 I used Excel sheets to track the income and expenses (different Excel sheets for different websites and accounts). I now have to file that tax return which shouldn’t be too bad either.

This year, I have decided to use QuickBooks Pro for my book keeping. It might be a little tricky to use QuickBooks for online business since a lot of the profit is from affiliate accounts and non-tangible services from very wide range of customers. I will post whatever I learn in the process on this blog.

Following are the original steps:

1. Start a new business on QuickBooks
2. Choose the Interview process so QuickBooks walks you through the procedure
3. For Industry, choose “Retail Shop or Online Commerce “
4. Choose your company’s organization type. Mine is a “Single Member LLC”.
5. The following steps are pretty self explanatory.

Once you are done setting up the account, create your regular vendors. For me this included vendors such as hosting companies, my coder(s), designer(s), email marketing company, etc. You can do this by simply clicking on the Vendor icon and choosing “New Vendor” option.

In future posts I will show you how to setup your hosting company and other monthly subscription bills on QuickBooks.