Zoho Books Full Product Tutorial

This guide provides a clear, step‑by‑step overview of Zoho Books—covering initial setup, core settings, chart of accounts, sales and purchasing processes—based on the recorded webinar by Zenatta Consulting. It’s structured to help both new and existing users understand what’s changed and how to get the most from the platform.

1. What Is Zoho Books?

Why would a business choose Zoho Books?

• Zoho Books is a cloud‑based accounting software for managing invoices, purchases, banking, inventory, and financial reports in one place. zoho.com
• Key benefits: automation of accounting tasks, online payments and banking feeds, integration with other Zoho apps.
• Particularly helpful for small‑to‑medium businesses looking for a system to scale.

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2. Application Overview

What does the user see when logging into Zoho Books?

• The Homepage/dashboard gives a visual snapshot of key metrics: receivables, payables, cash flow, etc. (mentioned by the webinar speakers)
• Left‑hand navigation includes modules such as Items, Banking, Sales (Customers → Estimates → Invoices), Purchases (Vendors → Bills), Time Tracking/Projects, and Reports.
• Example: Under Items you can create services or products, set up item‑groups (e.g., variants), composite items, and price lists.
• Banking section supports live feeds via aggregators like Yodlee and Plaid, to import transactions automatically.
• Sales & Purchase sides mirror each other: manage customers/vendors, recurring invoices/bills, credit notes/credits.
• Document management: store bank statements, receipts, attach files to transactions.
• The above reflects a high‑level workflow from the webinar that covers the modules and menus.

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3. Settings & Configuration

What foundational settings should be reviewed and configured?

Below are the major areas to set up before heavy usage:

Organization Setup

• Enter company profile, address, warehouses (if using inventory)
• Custom domain mapping is possible so you don’t have to use the default “books.zoho.com” URL
• Multi‑currency setup: enable/dis­able exchange fees, add custom currencies

Tax & Compliance

• Set up sales tax / VAT rules (in U.S. context: sales tax; other regions: VAT)
• For U.S. multi‑state sales tax, integration with a tax engine like Avalara is recommended.

Preferences & Fields

• Choose which modules are active (Estimates, Sales Orders, etc.)
• For Customers/Vendors: set default types (Business/Individual), credit limits, address formatting
• Enable custom fields, custom buttons, related lists for deeper customization

Accountant Settings

• Define how advances (vendor advances, customer advances) are treated and which GL accounts they map to
• Manage user‑roles and permissions: for example, restrict staff to invoice access but not banking

Transactions & Templates

• Set number‑series rules for invoice, credit notes, purchase orders
• Customize PDF templates for invoices, estimates, sales orders, packing slips
• Set up online payment gateways (Stripe, PayPal, etc.), and automate recording of bank/clearing account entries

Automation & Integrations

• Workflow rules: e.g., when invoice overdue → send reminder email
• Webhooks/API: integrate with external systems
• Other integrations: e‑commerce (Amazon, Shopify, eBay), shipping (UPS, EasyPost), SMS (Twilio)

Tip: Because Zoho Books has deep customization, it’s recommended to review settings early and set up only what you need to avoid complexity issues later.

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4. Chart of Accounts

What is a Chart of Accounts (CoA) and how should it be set up?

• The CoA is how your incomes, expenses, assets, liabilities are categorised. In Zoho Books you’ll find a pre‑populated list of accounts. zoho.com+1
• Some accounts come locked (system‑accounts) and cannot be deleted; these handle bank‑fees, deferred revenue, etc.
• Best practice: Keep the structure simple rather than overly granular — especially when you prefer a concise Profit & Loss.
• You can add sub‑accounts under a main account for detail (e.g., “Automobile Expenses → Fuel” and “Automobile Expenses → Maintenance”)
• Important to map your beginning balances correctly when migrating from another system.

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5. Sales Process Workflow

How does the sales flow work in Zoho Books?

A typical sequence:

1. Estimate/Quote created for customer → optionally converted to a retainer invoice
2. Estimate accepted → converted to a Sales Order (if applicable)
3. Sales Order → Package → Shipment → Invoice
4. Invoice → Payment → Record payment (automated if gateway setup)
5. Recurring invoices: For subscription or repeat services, set up schedule and auto‑charge if enabled
6. Credit notes / sales returns if required

Key features:

• Line‑item discounts, change orders, internal notes vs. customer‑facing notes
• Ability to specify payment gateways per customer
• Status tracking across the flow (packed, shipped, invoiced, paid)
• List‑views for quick status checks (e.g., shipped but not invoiced)

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6. Purchase & Expense Workflow

How does the purchasing side mirror the sales side?

Typical flow:

1. Create Purchase Order to vendor → Receive Goods → Convert to Bill
2. Bill → Payment via check, ACH, vendor credit
3. Recurring bills (e.g., rent, subscription) can be scheduled
4. Vendor credits/refunds processed as needed

Additional module: Expenses for employee spend, company cards. If using Zoho Expense, feeds into Zoho Books for categorisation.
Bank feeds and reconciliation tools are part of the process—especially helpful to match payments & check status of outstanding checks.

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7. Best Practices & Tips

• Use the dashboard to monitor KPIs like AR aging, cash flow, AP aging
• Reconcile bank accounts regularly—not just rely on feed imports
• Maintain consistent naming, tagging and sub‑account structures for reporting clarity
• Automate as much as possible: reminders for overdue invoices, emails for shipping, workflows for approvals
• Document your CoA and tag strategy (especially if migrating from systems like QuickBooks where reporting constructs differ)
• Only enable modules you need initially (e.g., if you don’t need Sales Orders or Inventory, disable to reduce clutter)

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FAQ