 QuickBooks Online 2023. Progress invoicing example two record customer payment cost of goods sold and revenue for month number five. Get ready to earn the skills needed to boost your bank books on up with QuickBooks Online 2023. Here we are in our QuickBooks Online test company file. We started up in a prior presentation. Remembering we're in the accountant view as opposed to the business view. You can toggle between the two views by going to the cog up top and switch the view down below. Duplicating some tabs to put our reports in like we do every time. Right click in the tab up top to duplicate it. Right click in the second tab to duplicate it back to the middle tab down to the reports on the left hand side. And we want to be opening the balance sheet as that's thinking tab into the right reports on the left. This time the profit and loss the major two the big two closing up the hand boogie changing the range 010125 to 0632 5 and run it. And then I'm going to be well actually I want to see this on a month by month breakout so let's hit the drop down here before I move forward and go to the months and then run it. Boom shaka locker tab to the middle close support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. Close up the hand boogie run the range 010125 to 0632 5 let's see this one as a classy report breaking it out by classes class tracking run it and then we're going to tab to the left. All right we're in the projects down below and we're in project number two that's where our focus is let's close the hand boogie and let's recap what we have done thus far. So we have created an estimate and then once we made the estimate we made a billing structure that we're going to charge the customer for starting with that customer deposit that we recorded with an invoice. But we didn't want to record it as revenue because instead we want to be recognizing the revenue in like a completed a percentage of completion type of way. So we've been recording the actual expenses that have happened as we've gone through this process here and recorded our expenses to cost a good sold for this project. And then we've calculated what our revenue would be a proportion of the revenue based on the completion process and recorded our revenue that way. And that's the general process and we've been going through that process until month number five here. So now we're on month number five. Now last time we left off we had invoiced the client for and we're going to be receiving the payment now so we invoice them with an invoice. But the invoice increased accounts receivable like we want but the other side didn't go to revenue but rather to billions and now they're going to pay us on it. We're going to imagine because we gave them that nice easy invoice making it easy for them to pay us. That's going to happen on five fifteen. We're going to get money checking accounts going to go up check out the checking it's going up man because we're doing business. The other side is going to go to the accounts receivable. It goes down because we got paid and then we're going to say that amount that's going to be our transaction. Let's record it in Excel straightforward transaction. Nothing unusual here checking account. I'm in v3 f2 plus f2 scrolling down pick it up that thirty five thousand and other sides going to decrease this accounts receivable account f2 plus f2 and thirty five thousand. And so it goes back down to zero boom. Let's do that on our our QuickBooks which again nothing kind of unusual happening in order to do that because we were just going to receive the payment for the invoice that we sent out last time. By the way if we if we look at this information in our customer field this way and I go to my customers over here customer number two we can see the detail by form of all the kind of transactions that happened. And we can see that we've been using these invoices for external and internal invoices. But it's working out quite nicely that that the ones that we're billing on are still showing up as a payment that we need to receive right. And so this at this point in time I'm just going to say OK we're going to receive payment they paid us on the invoice. So we're going to pull that up and this will be as of when did they pay us five fifteen let's say that's been our process OK. And this is just going to increase the checking account the other side decrease in accounts receivable just like we saw in the Excel worksheet and save it and close it. And so there it is there payments been received invoice have showing as paid Mui B to the end going to the tab to the right running it. Checking account goes up fifty fifty three two fifty four that ties out to our worksheet don't it don't it. I think it do fifty three two fifty four yes it do. OK and then well then the other sides go into the accounts receivable accounts receivable goes back down to zero. All right great. And then we're going to just wrap this thing up for the last month recording our expenses for the cost of goods sold for the last month. And we're going to break that out materials labor and overhead like we did before I'm just going to put in our numbers let's say this time it was fifteen thousand materials. And then I'm going to say fifteen let's say fourteen thousand here and one one seven eight here. And if I sum that up that comes out to thirty thousand one seventy eight thirty thousand one seventy eight. All right so we'll record that and then we'll figure out our revenue based on that. Now notice that if I total this up now by the way total if I sum it up sum it up and little darling. OK I'm going to copy this across this total here ties out to our total exactly now that's not likely. I mean obviously you might have to basically adjust the estimates based on the actual what actually happens. Right but we're just for the practice because we're kind of focused on the progress in voicing will keep it there worked out perfect great. OK so then that means that I'm going to record that over here. Let's do that over here. So we're going to have this last for the last month I'm going to say five fifteen is that what we've been cost to goods sold cost of the goods. And the other side is going to be going to the cash we're going to be paying for the stuff the materials the labor the overhead for the amount of that thirty thousand one seventy eight. There's our debit there's our credit let's record it journal entry style and then we'll go to QuickBooks. So it's going to be cost of goods sold right here in V nine V nine F two plus F two scrolling down cost of goods sold then on up to the checking checking account right there. F two plus F two scrolling down there's the checking. OK so there we have it that looks good. And now of course we have a loss here because because we haven't recorded the revenue for that final bit which we're going to do next. OK so let's I got to do that over here but I'm going to do it with the expense form. So let's go back to our project which is probably the screen it would be sensible to do that with project number two project we've been working on. We're going to say it's an expense type of form and we're going to say it's just been the generic vendor one and I'm not going to do it by category. The date will keep the date there. That's OK. I'm not going to do it by category but by item let's just delete the items and re-input that in one more time one last time one more round because I didn't hear a bell and I don't stop. I didn't hear no bell until a bell rings. I don't stop. So thirty five thousand. There it is. We're going to make it billable. So it pulls over to to the invoice that will make for internal purposes revenue recognition purposes. This is going to be class number two and then we're going to say this is liability or labor labor. And that actually hold on a second. Wait a second. Wait a second. Let me look at my breakout over here. It's not exactly correct because I got to break it out. Fifteen fourteen fifteen thousand. OK. That makes more sense. Fourteen thousand. Where are you getting those numbers from? What are you thinking? I don't know. I don't know. Overhead. Overhead is going to be then the one one seven eight. OK. One one seven eight and then we're going to mark it up by that thirty percent. This is going to be going to class number two. Let's pull out the trusty calculator to double check the revenue that's going to pull into the invoice for our revenue recognition which is calculated over here. That's what's going to pull into the invoice. So it's going to be nineteen five plus eighteen two plus one five three one point four. And if I check that on this side, then I'm going to do the same calculation over here to figure my revenue now. So the percent completion is going to be equal to that thirty thousand one seventy eight divided by the total cost. And then I'm going to format paint brush it from here home tab format paint brush her and bring that on down. So there it is. And then I'm going to say this then the revenue of one hundred thousand times that amount is going to be that thirty nine two thirty one boom. And if I sum this up on the side, we get to what a hundred percent hundred percent if I percentify it. And then over here, the total revenue recognized is going to be about the one hundred. There's some rounding. There's some rounding issues going on, but that's OK. It's pretty it's pretty dang close. So we'll deal with those rounding issues in a following presentation. So let's just record this for now. And so that looks good. This is going to decrease the checking account. The other side going to the cost of goods sold. Let's save it and close it. Tab into the right and running tab into the right and run. And then we're going to say just like Jenny just like Jenny told me to run. OK, so we're going to say that comes out to what did I do the checking accounts going down focus. Focus. There it is checking accounts going down. The other side is in the accounts receivable and hold on checking it. The other side's going to cost a good sold cost to good sold. And so there it is. So there's the cost gets sold in the last month. So now we need to pull in the revenue that's going to tie out using our percentage of completion conceptual framework. So we did that. Did I do that over here? I don't think we did it yet. Let's do it journal entry format, which is a little bit easier. So we'll just say journal journal format way of doing it 531 revenue. I'm going to put on top even though it's a credit because that's the first thing I think of. And that's going to be equal or negative number of the revenue recognition for our table that we came out to. That's what we need to recognize. You better recognize. And then we're going to say that this is going to be work in process and negative of that number. So there it is revenue and work in process. So let's bring it on up and we're going to record the revenue in V8 F2 plus F2 bring it on down and boom revenue has been recognized and then work in process. Work in process. Let's do that and put in the work put in the work in the process. There we have it. Now these two you note are matching out against each other. So when we close the when we close the project we can kind of net those two out. And then we've got our revenue minus our cost of goods sold broken out here all in one column. When we see it in QuickBooks we can see the cutoffs then that are hopefully nicely matched by month. Right. That's the idea. So then I'm going to go back on over and how can we do that in QuickBooks. I'd like I'm using revenue so I'd like to do it with like an invoice form because that's the thing that we do to record revenue. That's the form we use to record revenue most of the time. So I'm going to hit the drop down and record an invoice not so I can send it to the client because we've already totally billed them already. The estimate is gone. We've already billed them. We're just pulling over the billable items for internal revenue recognition purposes. And this is going to be on 531 531. And so then these items are going to be going to revenue. So what would this do if I just record it invoice increases accounts receivable by the total 39231 40. And then the other sides would be going to revenue. I want these going to revenue but I don't want that going to the invoice. I need to make that zero and put it to where I want it to go which is work in process. So I'll just make a little thing down here that I already made and just say it's that's going to make it go to the work in process account. Negative total amount 39239 231.4 class number two and that should do what we want it to do. No accounts receivable instead work in process other side revenue. Let's save it. Let's close it. This isn't going to the client. This invoice isn't going to the client. It's an internal invoice. We can see that by the way if I go over here to my to my sales information customer number two. You can see that that it already shows as like paid because it was had a zero balance to it. And so it's zeroed out. It's paid. So that works quite nice. And then we go to the tab to the right and we can see now that the work in process is at that the 100,000 the billions at 100,000. So those two match out except for the rounding difference and we can basically close that out next time. And then and then if I go over here and run this one, I've got that nice match out for my last month in May. So that works really, really good, really, really good. Let's go to the first tab and just double check our numbers. Double check. Take a double check. 23, 23076 and then 1001, 10000. Okay, looks good. And then if I go to the income statement over here, then I've got one. I've got 100 because that's the revenue for the job now minus the 76, 924. And so there's that. There's a 76, 924, 23077, 23077 and excellent. So let's right click here and duplicate this just so we can see this report on a full year, 1231 to five. If I was to break it out by class because I use the class tracking. So notice the class tracking and the projects as well as the tags normally focus mainly on these income statement accounts so you can kind of break out by column by column. But the class tracking gives you this nice total at the end, which doesn't happen as easily with the tags. And again, with the project reports, if I open up and duplicate the projects for all of the projects, then you get a much more, you know, summarized report project, project summary report from 01, 0125, 1231, 125, boom. And you get that. You also have, of course, the project reports here that are broken out by projects. Within this class, I can go to my I can go to my project reports and see the projects, which are different than the classes, but we're using classes to assign to the projects to kind of give that double redundancy for it. But I don't see I can't I don't have the report that side by side project by project, but I get this nice report for a single, you know, project within that project area over here. So we can also see on the balance sheet if I run this for the full year 1231 to five. So now it's got my two projects for the full year one was at the end one at the beginning. If I had amounts in the work in progress accounts. This is what the class tracking adds to the to the to the picture here because that's kind of nice because then I can, I can easily see the balance sheet account for those two accounts so that I can kind of match them out and close this job out with regards to them quite easily. If I didn't have classes, I could go into this account and again, sort it by sort it by customer like that. But remember, if you sort by customer, you got to make sure you have the name field, which is why another reason why we use the invoices so I can sort by, you know, the project and the customer over here. There's only one in it right now. So just note that if there are multiple customers, I could sort it, you know, by customer, which is nice. So that's another way that we can get kind of that redundancy in there. So now where we stand, of course, is that the job is basically completed. And we've we've now got these accounts and work in process and the billing and the ending closing journal entry for us would basically be to close net these two out. So I'm going to net these two out and then that rounding difference. We can just close that out to a cost of goods sold. Usually if it's a if it's a minor difference, so we'll do that next time.