 QuickBooks Online 2022, entering beginning balances, customers, ventures and items overview. Get ready because it's go time with QuickBooks Online 2022. Here we are in our Get Great Guitars practice file that we set up from the 30 day free trial. Gonna hold control down and scroll up just a bit to get to that one two five percent. We're currently in the home page or in the Get Things Done page. In prior presentations, we set up the preferences going to the cog on the right hand side. Also note that we're currently in the business view and you can toggle back and forth between the business view and the accountant view by selecting the cog and going down to the bottom down below. We'll keep it on the business view for now. So now we want to start entering data into the system but one of the first things we need to think about is is there any prior data that we should put into the system to start out with as we move forward possibly prior data from a prior accounting system or possibly prior data from things that we have set up as part of the business that we haven't formally put into kind of a formal accounting system such as we already set up a checking account. We already purchased some equipment and whatnot and now we're starting our company file at this point in time. If we had a formal accounting system in the past with some other accounting software or we're doing it by hand with our own ledgers or something like that then the question is well how am I going to get that stuff into the current system? I can either enter the data from the past meaning if I've been in business for two years do I want to enter those two years of data into the current system? You may or you may just say hey look I would like to keep my past two years worth of data in the prior accounting system and start the current accounting system from one point from a cutoff time going forward. Therefore if I have questions in the future about something after that cutoff date I will be in this accounting system if I have something from the prior date I will be in the prior accounting system that's one way that you can you can kind of think through it and if that that's the method that we're going to basically be imagining at this point in time and if that's what you are doing then typically what we want to do is enter the data into the system for a full fiscal year full tax year as well if we have a January to December or normal year as our accounting year then we probably want to have the cutoff in January if at all possible meaning even if you're starting in the middle of the year you're starting in in March or something like that then you might want to consider entering the data from the prior accounting system for the first three months so that you don't have three months of a prior accounting system in the same year as the current accounting system because that's going to mess up the reports at the end of the year which are typically yearly reports that you're going to be needing in order to generate your data so that's why so if that is the case then you might want to run parallel for the first three months you might want to try to enter the data into the accounting system possibly if you could for the first three months and then and then from that point forward you know move forward to the new accounting system or something like that that would be the general idea though it would be nice to cut off and start at the beginning of the year and if it's a calendar year in that would be January so that's what we're going to imagine here I'm going to take our data over here this is going to be like our beginning balances that we're going to imagine are going to be our starting point notice it says as of the end I'm going to say of 123121 that and we're going to start our current year in our practice problem on January 1st 2022 that's going to be our scenario here so the cutoff date that we're going to start at in the current system is January 1st now remember if you don't have a prior accounting software or something like that some of this same kind of concepts will still apply because oftentimes people will have already set up their checking account people will already have some assets some inventory and whatnot possibly before they set up their QuickBooks software and the same kind of thing applies you're going to have to put those in that information into QuickBooks somehow as kind of your business starting point your baseline point to be going forward we're going to take it here from a prior system because that way we can see how the balancing thing kind of works out because if you take it from a prior accounting system you're going to have something that's generally in balance you're going to have your balance sheet and you want to make sure that you put it into the current accounting system in a way that'll it'll basically balance as well so these are going to be our data it's in a trial balance format but just you know it's basically a balance sheet assets to up top checking accounts receivable inventory cumulative depreciation furniture and fixture liabilities accounts payable visa alone or you know the credit card loan payable and then the equity section with the owner's equity notice what is not here no income accounts no income no expenses why because those accounts would have rolled into the equity account as of the end of the year and we want to start out at you know no income on the current statement because that's a performance number and if we're starting in january the beginning of the year then the performance numbers for income will start to populate upwards as we start the new year and the new accounting system in the new year so we'll have a full year's worth of income statement data in the current period the last year's income statement data rolled into equity and if we want information about the last year's income statement data we're imagining that we're going to go to the prior accounting system before we started our quickbooks file that's going to be the scenario now as we enter this into the system if you've got an accounting background and you've learned like debits and credits then you might take a look at this and say well this is just basically a journal entry i can just go right into quickbooks over here and enter a journal entry i could just go hey let's just go hit the little plus button right here and find that journal entry and enter it in as one long journal entry but you don't typically want to do that or there could be some problems if you do that in quickbooks has has some ways to to adjust it or or make things a little bit easier possibly although it could be a little bit confusing in that you can think about that journal entry as the easiest thing to do because there's some other things within quickbooks that we need to consider to make the adjustments as easy as possible for example subletters are going to be important if we enter something into accounts receivable that means that we have customers that owe us money so if we have accounts receivable we we need to also be entering something into the subletters so if i enter just a journal entry for one lump sum then i'm not breaking out who owes us the money and how much they owe us by customer same with the accounts payable if i count if i have accounts payable that's going in there that means we owe somebody else money and if i don't put the vendors in there as i'm entering i just put one big lump sum number then i'm not breaking out the amounts that we owe and who we owe the money to and we have a similar issue with the inventory because if we don't do the inventory we don't have the item so let's go through these line by line and just take a look at some of the special needs that are going to be in each account and because of those special needs the system that we're basically going to use is that we're going to enter this data one account by one account into the system in the best way possible and then let quickbooks post the other side of the transaction to whatever it wants to post to which is going to be equity in some way it's either going to go to equity down here usually an opening balance equity or it's going to be going to the income statement but we're going to post it in the prior year so it'll roll into equity and it'll put it into like uncategorized income or uncategorized expense which will roll into equity because we're going to put it in as of 123121 prior to the cutoff and everything will roll into equity as the cutoff so the basic rule would be we're going to enter these things one at a time trying to meet the specific needs of that particular account quickbooks will put the other side into equity and if we do that for every account then equity will be correct at the end of the day although quickbooks will dump it into this opening balance equity and then we'll make just a journal entry to fix opening balance equity because that is just basically a holding account a clearing account or an account quickbooks is using to say hey look this is what i did to make the thing balance okay so that said let's go through each of these individual needs first we have the checking account now this is the checking account from our business side of things from the from the books that we have notice that that might not match what's cleared on the bank as of the cutoff date of 123121 so i'm going to have to enter this in to start out with but when i do the bank reconciliation you got to remember that you're going to have that issue with the cleared balance versus the balance that's on the books and have to deal with those outstanding checks and deposits so we'll get into that when we get into the bank reconciliation but other than that it's going to be straightforward we're just going to enter this right into the beginning balance and then the other side is going to go to the quickbooks will dump it into basically equity and so that's going to be that also note that bank feeds you could set up bank feeds as well and you'd have issues with relation to make sure you get the right data for the bank feeds we're going to talk about that in the bank feeds section that'll be after the whole practice problem you first want to see how to do it without the bank feeds to see how the accounting system works and then think about how the bank feeds fit in to the accounting system then we have the accounts receivable accounts receivable has a special need in that we need a sub ledger that's broken out by who owes us the money so that means that as we enter accounts receivable we also have to enter the customers that owe us that money and then the beginning balance for each of those customers so this one's will be a little bit more intense or a little bit more detailed than the checking account to enter as we do that as we enter each customer and their opening balance QuickBooks will post the other side to equity in some way most likely to an income account called uncategorized income because they'll probably make an invoice related to it because that's the form that increases accounts receivable and then it'll roll into equity as we get from 1231-21 prior year to the current year January 1st 2022 inventory inventory has special needs if we're tracking inventory in the QuickBooks system on a perpetual inventory system if we're not if we're just using a periodic system and not tracking the inventory in the system then it's not as much detail but if we're tracking inventory then we have to add the inventory items we have to add the actual inventory items and the amounts of each inventory items so QuickBooks can track it so that will probably be the most intensive one for us to enter as we enter the items of inventory and the cost of those items QuickBooks will then do the journal entry increasing inventory posting the other side to opening balance equity most likely and then the the furniture and fixed in equipment and accumulated depreciation those are pretty straightforward we can typically just put that into opening balance equity note that you do have a sub account for the furniture and fixtures in terms of your depreciation schedules but oftentimes for most companies or many companies then that depreciation schedule will be done by the tax software because the tax software is going to need to calculate depreciation on a book basis or on a tax basis and usually has the capacity to calculate it on a book basis as well so we do need to know the supporting information for it meaning what types of equipment do we have what's the accumulated depreciation per type of equipment but that'll typically be on sub ledgers and we're going to imagine them outside of the quick book system in the tax software and then we got the accounts payable it has a special need in that that means we owe other people money so we need to hope we need to know who we owe the money to and how much we call them vendors typically in the bookkeeping terminology so we're going to have to enter our vendors and how much are the beginning balances for each vendor and then if we do that quick books will set up the beginning balance and accounts payable after we enter the balances per vendor the other side will go to equity but it'll probably go to they'll probably make a bill form because a bill form is the form that increases accounts payable which will increase you know an expense probably unclassified expense expense or something that will be rolling into equity because it's an income statement account that rolls into equity and then visa that's a credit card account that'll be pretty straightforward we'll just enter the balance for visa in the beginning balance the other side will most likely be going to opening balance equity loan payable same thing pretty straightforward we'll enter the beginning balance in there and quick books will post the other side to the equity account most likely opening balance equity after we do this after we enter each of these beginning balances taking into consideration each of their individual needs and any kind of sub ledgers that are necessary as well as customers and vendors and items that are necessary quick books will then record the other side to equity in some way shape or form either posting it to this undeposit or this opening balance equity account which is kind of like a hold-in account quick books telling us hey look we did this in order to put the other side to some equity account or they will record something to uncategorized income or uncategorized expenses most likely for the receivables and the payables when we enter those items with invoices and bills but we will have done those in the prior year which will then roll forward into equity for the current year we will then have an amount in equity opening balance equity which is not a very professional account to keep it in because it's kind of a hold-in account so we'll take a journal entry out of the equity account and put it into these owner's equity so that may sound a little bit complex but if we do this a step we'll do it one one account at a time and we'll see how to get this thing in the quick book system not only in terms of getting the balances correct but also getting the supporting data correct the items of inventory the customer balances the accounts payable and so on