5. Set up your Products and Services list

When you enter a Pledge* or Sales Receipt in QBO, you can’t categorize by Account. Instead, you have to use the Products / Services list. These map back to an account in QBO. We’re going to prepare that system now so it’s ready to go when you start making entries. To do that, we’re going to create Products / Services that match 1-to-1 with your income accounts. 

If this doesn’t make sense or sounds silly and unnecessary, just trust the process for now. Later, when we go over entering income, it will make a lot more sense!

Navigation: Gear Icon > Products and Services

Edit default Items

QBO comes with a few default Products / Services. Some of these are the reason that you can’t inactivate accounts in the COA. You have to edit them, rather than inactivate the items, because inactive items using the account will still prevent it from being deleted.

Choose Edit all the way to the right of the item.

Change Income account

Scroll down to the Sales section and change the income account to the first income account in your list. (But not the parent account, if you’re using one!)

Change the name

Scroll back up to the Basic Info and change the name to match the income account you just chose. So in this example you would change “Hours” to “Individual Donations.” Save.

Do this process for all three default accounts, working down your income account list.

Add new Products / Services

For the 4th income account in your COA and going forward, you’ll make a new item for each account.

Click the New button at the top right and choose Service.

Choose income account

The process is pretty much the same as before. First scroll down and choose the next income account in your COA list.

Add name

Then change the name to match the income account.

Scroll down and click the Create New button.

Continue this process until you have one item for each of your income accounts.