 Zero Accounting Software 2023, New Vendors Setup and Accounts Payable Beginning Balances. Get ready because it's time to become an Accounting Hero with Zero 2023. 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. Here we are in our custom zero homepage going into the new company file. We started up in a prior presentation that being get great guitars continuing on with our process of entering beginning balances as well as setting up our file to make the normal data input and the normal accounting cycle as easy as possible. Jumping over on to our beginning balances. These are the items that we're adding into our system as of the end of last year. We're going to say December 31st 2022 so we can start the new data input for the current year going forward in 2023 of January. We're starting off with some of the more difficult accounts to be entering instead of entering just one big journal entry recognizing that some accounts have more needs and therefore we're entering them one at a time. The other side going to an equity account which we will then adjust at the end of the process and it should all work out. Alright so now we're going on to the accounts payable like the accounts receivable. The accounts payable is an accrual type of account so it's a deviation from a cash based type of system and it has a sub ledger not by customer now but by vendor that we need to be tracking. So a quick look on our flow chart if we jump on over to our flow chart this is the QuickBooks desktop flow chart but it's a good just flow chart to see how the process flows here. We're on the money going out cycle now the accounts payable cycle or the expenses cycle and the easiest thing for a lot of small businesses on the expense side is just to pay things as they become due possibly with the bank feeds and in that system if you don't have accounts payable you would just basically be paying things and as they come through the bank feeds then you would be recording them to the applicable usually expense account at that time. Now sometimes when you get into more money management strategies then you would like to be setting up your payment so that you can pay them as late as possible this becomes more and more important as the companies get larger because that small time difference between like 15 days of paying today or later becomes significant when you have either large dollar amount transactions or transactions that just a lot of transactions and therefore using the accounts payable and managing exactly when you're going to pay them towards the end of the payment process becomes more valuable. So with our beginning balances then we're going to say that we have an accounts payable on the books. So like with the customer side of things we're going to add the contacts this time basically a vendor contact some that someone that we are going to have to owe money to and we want to put it on the books not just as a journal entry because one zero probably wouldn't let us do that without a vendor or contact because it needs to tie us to who we owe the money to so it can make the sub ledger and two because I want it on the books in a format that I can do my normal accounting process going from this point forward meaning I would like it in there basically as a bill so that I can show it as the bill being paid that's the normal accounting process when we have an accounts payable. So let's go on in and say well how can we do that on over here. Let's open up a couple tabs to put our reports in first off and then we'll do the do the new stuff so let's right click on the tab up top and duplicate it. I'm going to put two new tabs and open our reports. This will be the process that will do most of the time every time we go into the system as we go forward back to the middle tab and let's open up our accounting reports because we want to see the financial statements as we do stuff. I'm going to open up a balance sheet and then as that's thinking I'll go to the right and then accounting and this time open up the income statement otherwise known as the profit and loss statement. And then let's just the date range now notice in 2023 there's no activity but we might see activity in 2022 last fiscal year as we did with the income side of things and that's okay because it'll roll into the balance sheet. And so we'll see that as we did a data input back to the prior tab December 31 2022. This is what we have thus far. Now we're going to be putting on this accounts payable. Let's go ahead and just mark off the ones we've done shall we. I could say let's make that one is boom done shock a locker that one and now we're working on the accounts payable. That's the one we're on right now. So 15,000 we're going to say it's epiphone is our vendor now this time we only have one vendor so I'm not going to do an import we'll just add the one contact. So I'm going to go to the first tab we're going to go to the contacts and we can look at all contacts or the suppliers and then we can add a new contact. So when we add the new contact just like what's all with the customers we got a lot of contact information noting that a lot of times when a company deals with customers. They want like a lot of information because you might be dealing with customers in a more personal way and therefore you want a lot of contact information and whatnot if you do and repeat business with a customer. Although some other businesses they don't do a lot of business with any one particular customer they have one off transactions. Like if you have a Shopify store for example you probably don't have a lot of personal contact with the customers you're just selling you're trying to sell a lot of merchandise or something like that. And then on the vendor side of things the people that you're paying oftentimes most of your vendors you have very minimal information you need from them in your accounting system you pay the utility bill. You don't need much from them to pay the utility bill I just needed to know who to pay how I'm going to pay it. But you might have some vendors that you do a lot more interactions with it's on a more personal level such as if you buy inventory your primary vendors that you buy inventory from for example. So then you might want more detail as you enter the information into into your your new contact information. Now note that I could import it just like we did before if we had a lot of contacts we can import it just like we did with the customers and we would download the template and populate the template in a similar fashion. Also just realize that if you're moving from another accounting system into the current accounting system it might be the case that you have a whole lot of contacts in a prior accounting system because everybody that you have paid has a contact with it. But but you might not want to import all of the different contacts or vendors because because you may not need them all. And it's pretty easy to populate the vendors as you do transactions a lot of small businesses when they have bank feeds when you first start doing the bank feeds that will often help you to facilitate the contacts that you're going to set up. And it might be a good opportunity if you're if you're starting a new accounting system to try to make those contacts as custom and current as you can. And so it might actually be easier not to pull in all of the other contacts and just as you do financial transactions and pay bills you add those particular contacts. So just you know keep that in mind because there could be a contact is one area on the vendor side and the customer side depending on your circumstances they could get bloated and have more information than you need you could go in there and clean them up. Any case we have our one contact that we want to put in primarily because we want to put in the accounts payable related to them. So I'm not going to import this time but rather I'm just going to set up a new contact one at a time. So let's go back into my contacts here and we'll just set up our new contact and same contact fields. But now we're basically treating it as a vendor. I'm going to call the contact name at the phone and that's all I'm really going to put in for this particular contact. Now again I could get I could add all this detail but I'm basically just going to put the information I need to track the payment that I'm going to be sending to them in practice. I you know I'd have to have however whatever format I'm going to be paying them but I'm just going to put the contact name here. The other information is much the same as we did on the customer side. All right so let's go ahead and save and close it. So now we have the contact in place. Then I would like to put in the balance of 15,000 that we owe them which should also be populating on the balance sheet. And I want to do so in such a way that I can then track the payable and pay it in the normal accounting process going forward. So you could go back to your prior accounting system and look at the exact bill that you entered and replicate the exact bill. But you might not even need that much detail. You might just need to recognize the I owe them 15,000. So I'm just going to create a generic bill that I can then use to track the accounts payable and the sub ledger of Epiphone the vendor that we owe the money to. So I'm going to do the same thing we did with the with the invoice and just add the normal form of bill which is the thing that creates a payable. And I'm going to say this is going to go to Epiphone. We just set up Epiphone. I want to make sure it's as of last year because even if it goes to an income statement account, I wanted to roll over by the end of 2022 into the equity account when we get into 2023. And then down here I can choose whatever item I need or I'll just say beginning balance here and then I'm going to say 15,000. And then the other side, the other account that it's going to be going to is going to be now oftentimes it would be like an expense account. You could put it directly to equity. That would probably be the easiest thing to do. So we could say I'm just going to make it go directly to equity like owner's capital. And that way it would go there if it went to an expense account. If you wanted, for example, to mirror the bill you did in the prior accounting system and put it to an expense account. As long as it was going to the expense account as of the prior year, then it would still roll into equity and you would be okay. So you could do that or you could just put it directly to equity here. What will this do? It's a bill. That means it's going to increase accounts payable. The other side is going to go then to equity because that's where we told it to go. Normally it would go to like an expense. And then it'll also track the sub ledger by vendor who we owe money to, which should tie up to the accounts payable. All right. So then I have to put the amount in here. I need to put one 15,000. There's the 15,000. Okay. Let's approve it and say movie being for it. All right. And then if I go to the tab to the right and we just update update to get it to see what's going on and what's happening around here. And there's the 15,000. If I drill down on that 15,000 in the accounts payable, then we see it populated with a normal form that it populates with that being a payable invoice, which is like a bill, right? There's an invoice and a payable invoice. So that looks good. The other side is going to the owner's capital. So okay, let's go back on over. Then if I go into my income statement, I didn't put anything to the income statement at all in the prior year or the current year because I just put it to equity. So then if I go back to the balance sheet, the other side I put into the owner's capital account. So if I go into that, then we have our activity and there is our invoice payable. Okay. Boom. All right. Going back up. So now it looks good on this front, meaning we now have the balance, the beginning balance in place and look like it populated it with a bill. And then when we actually pay the bill and we can track it just like we normally would. So if I go back into my contacts, for example, all contacts. So here's our contact list. And then here's the people we owe money to. I can hit the contacts and go down to the suppliers or vendors, whatever you want to call it. And there's the 15,000. And now it's tracking basically the sub ledger of accounts payable. And the next step would be to pay the bill as we normally would. All right. So if we look at the summary here, so now we've got our accounts receivable, our inventory, our accounts payable and our strategy as is working. So this is what it looks like here. We're putting all our beginning balances in one at a time dealing with any sub ledgers that we would be necessary to deal with as we do so. The other side going to some kind of equity account. And therefore once we're done with all of these individual accounts, the total equity will balance. And then we can just do a journal entry into the equity side to break out the equity to whatever accounts need to be there within the equity account. And put everything into, in our case, the retained earnings because that's the account that zero is using to roll over the income into. So we'll talk more about that in future presentations.