 QuickBooks Online 2024, Purchase Order Form or PO Form. Get ready and some coffee because we're diving into it with Intuit's QuickBooks Online. Here we are online searching in our browser for QuickBooks Online Test Drive looking for the result that has Intuit.com in the URL Intuit being the owner of QuickBooks selecting the United States version of the Test Drive software and verifying we're not a robot. Let's duplicate some tabs to put our financial statement reports in like we do every time. Right click on the tab up top so we can duplicate it. As that's thinking we'll right click on it again and duplicate it again. As that's thinking we're going to go back to the tab to the middle. Reports on the left hand side open up that favorite balance sheet report tabbing back to the right reports on the left once again but this time the other favorite report the profit and loss the P&L otherwise known as the income statement. We can close the hamburgers on each of these tabs as well. That's the setup process we do every time the first tab being where we do the data input then we can check the result on the thing that we're looking to create here the financial statements the balance sheet income statement and related reports. If I hit the drop down you'll recall we've been focusing in on the vendor cycle that's where money is ultimately going out for the payment of goods and services that we're using for the business vendor for the purposes of QuickBooks meaning specifically that that's the person the people that we're paying. First a word from our sponsor. Yeah actually we're sponsoring ourselves on this one because apparently the merchandisers they don't want to be seen with us but that's okay whatever because our merchandise is better than their stupid stuff anyways. Like our CPA six pack shirts a must have for any pool or beach time mixing money with muscle always sure to attract attention even if you're not a CPA you need this shirt so you can like pull in that iconic CPA six pack stomach muscle vibe man you know that CPA six pack everyone envisions in their mind when they think CPA as a CPA I actually and unusually don't have tremendous abs however I was blessed with a whole lot of belly hair allowing me to sculpt the hair into a nice CPA six pack like shape which is highly attractive yeah maybe the shirt will help you generate some belly hair too and if it does make sure to let me know maybe I'll try wearing it on my head and yes I know six pack isn't spelled right but three letters is more efficient than four so I trimmed it down a bit okay it's an improvement. Money actually going out to them ultimately for the goods and services we're purchasing we talked about a few different ways that payment process might happen one cashed based system easiest way you can basically pay with electronic transfers possibly use bank feed to record the transactions a little bit more difficult you enter the checks why is that more difficult because checks take a while to clear therefore you want to enter them first not totally relying the bank feeds to record them last time we talked about entering bills and then paying the bills that's going to be an accrual type of system now we want to stick to this kind of accrual system concept however this time we're going to add the added complexity of having inventory in the process a lot of businesses don't have inventory if your service business like a bookkeeping firm or something like that you might not have any inventory to deal with and that makes it a little bit easier at least on that side of things although you have other complications you might be in a job cost system or something like that if you're doing a bookkeeping firm or an accounting firm or a law firm or something like that but if you have inventory then you have to ask the question how do I want to track the inventory to tackle that question let's first take a look at our flow chart over here this is a desktop homepage flow chart but the forms are the same for just about any kind of accounting system and we just want to think about how the inventory fits into it so when we have inventory notice that inventory is going to bridge the gap or both of these cycles we're going to purchase the inventory which is on money outflow side of things the vendor cycle or the accounts payable cycle or the expense cycle or purchase cycle and then we're actually going to use that inventory to help generate revenue so we're calculating our invoices with the inventory so we're going to mark up the inventory if that's the type of business we are in we buy the inventory, we mark it up we sell it and then it's going to be included when we create our sales receipts and invoices so that means inventory goes up when we purchase it on the vendor side it goes down when we sell it on the customer side of things we're currently up here on the vendor side of things so when we purchase the inventory then normally if we're on a perpetual inventory system we would have to basically be tracking the inventory as we go when we purchase it and when we sell it we would want to also track it as we enter the sales forms such as the create invoices and that means we're going to have to track a subsidiary ledger within QuickBooks which can get more complicated so that's also one of the features that you want to make sure that you have the proper QuickBooks account to be picking up the inventory if you do have inventory needs and want to track it within the QuickBooks system now remember that you don't always have to track inventory within QuickBooks you might be using or you could use what's called a periodic inventory system in which case I'm not going to have the subsidiary ledger within QuickBooks but instead I'll track my inventory somewhere else such as on a third party software like if I have a Shopify store or something like that then we could use the Shopify app tools and whatnot but oftentimes the inventory will basically be tracked outside of QuickBooks or you might have like an Excel worksheet or something like that where you're basically entering the actual units of inventory and the way that might work is that you might actually just purchase the inventory which means you'd still record the purchase of inventory up top but then when you sell the inventory with this invoice or sales receipt possibly you don't actually track the inventory within QuickBooks but instead count the inventory on your physical worksheet and do a cost of good sold calculation or a count the inventory to figure out how much inventory is left cost of good sold beginning inventory plus purchases minus ending inventory gives us our cost of good sold and then periodically do an adjusting entry to record the reduction in inventory and the recording of the cost of good sold or expense related to the use of the inventory possibly at the end of each night or the end of each week or the end of each month or something like that so just note that that is an option you don't have to do the perpetual inventory system if you have some other system that would work well with the inventory so if you're dealing with inventory you want to dive into it in a little bit more detail where you sell in the inventory from your website from a Shopify store can you connect the app or something like that to the Shopify store can you use a periodic inventory system in which case you do a physical count and do a periodic adjustment into QuickBooks or in some cases if you don't have a lot of inventory on hand but you purchase inventory for a specific job then you might just be able to expense the inventory when you purchase it to cost of good sold because it'll be really close to the point in time when you actually make the sale and so that would be another another option but if you're dealing with inventory on the purchasing side you might have this purchase order now again you might not have the purchase order sometimes because it depends on what kind of business that you are in if I buy something for example from an online store then it's not like I can request the purchase as an individual and have them ship it to me, check what they gave me and then pay them no instead I have to pay them upfront when I order it which means a financial transaction has happened and then when I receive the inventory I get the inventory right but the inventory is basically mine when I purchase it in that case because I paid for it but sometimes if you're ordering large things and you might have the ability as the purchaser if I'm ordering a bunch of coffee cups for example to be shipped from China or something then I might be able to request the purchase of the 100 coffee cups upfront have them be shipped here once we receive them the box of coffee cups having a bill in it and then we pay the bill once we receive it in that case we have this purchase order now the purchase order is or a little bit more unique than most of these other forms because it doesn't have a journal entry related to it the estimates is a similar kind of form it's an internal form there's no transaction related to it because once again I don't make the payment when I request the coffee cups and I didn't receive the inventory when I request when I requested the coffee cups right so that means we have to be able to track the purchase order but it's not an impact on the financial statements and then when we receive the payment then we can enter the bill at that time which is generally when we will increase the accounts payable and we'll record the inventory at that point in time so if I go back on over to QuickBooks here we would track that basically on the expenses side of things and then you might go into the expenses tab up top and we could sort by the purchase orders so we want to sort by the purchase orders and then here's all the purchase orders and the ones that are outstanding we could filter and say I want to look at the status for the open purchase orders and okay so there we have them we could also then go to the contractors and find I'm sorry the vendors and find the detail for the purchase orders in here as well we can go to the particular vendor and look at the detail for that particular vendor if there's a purchase order here's a one purchase order if I go into this person we can see the purchase orders within here so there we have it that way as well let's actually enter one so we can see the data input of it I'm going to select the tab up top the plus button and we can enter the purchase order from here we could probably find it within the expenses center as well but this kind of houses all of your data input forms quite nicely let's do another generic vendor vendor number 10 so remember that the system refreshes every time I do a presentation because I log out and come back into it so you might want to do that to make sure that your everything is the same on your end and then we can ship to now if we wanted to ship it to a different location like a customer particularly we can ship it to a particular customer and that will change the shipping on down below but I don't want to do that I want to reverse that and I don't know how I'm going to close it out and go back into it I'm going to say do you want to leave yes and let's say let's go back into the another purchase order and we're going to say vendor 10 so we're not going to ship it to an actual customer we're going to keep our address which is the shipping address which is going to be in the detail when we set up the company file we'll talk about how to set up the company file more in future presentations but the purchase order date let's make it in 2024 010524 and then we can have ship via if you had something to populate within that field we're not going to add any tags note by default we don't have the category detail populated because this one is not extended why because normally the category field is where or this is similar to what we saw in the bill form if I was to be able to enter this to a direct account such as I guess inventory or to an expense account but we're not doing that with the purchase order forms because this form isn't actually even affecting any accounts at this point in time we're just doing it for a request and because we're purchasing inventory so let's actually add the item I'm going to add a new inventory item as we go so I'm just going to call it item one so we'll talk about adding inventory items in more detail later but the general process would be we're going to add inventory we're going to make it inventory because I want to track the inventory I'm going to call it item one this is the thing that we're going to imagine that we're purchasing marking up and then reselling if we had an SKU number we can put that here we can actually put an image on it we can categorize the inventory I'm going to imagine we don't have any on hand so zero I'm just going to put as of the beginning of the year reorder point meaning how if it gets down to a certain point when do I want to reorder it I'm just going to leave it blank the inventory asset account this is the asset account that will be going up when we purchase the inventory description item one the sales price I'm going to say we sell it for $160 it's going to go into the sale of product income notice we're not selling it now because right now we're doing a purchase order no transaction is happening when we get the inventory and finally sell it to a customer that's when it's going to go to that income account if it's taxable we were going to say it's taxable we'll talk about taxation later but the tax is currently being applied so we'll keep that for the sales tax the cost I'm going to say is $100 we buy it for $100 we sell it for $160 and we're going to say when we sell it the cost of goods sold will be impacted in other words on a perpetual inventory system when we sell it with an invoice or sales receipt the accounts affected will be the sales will go up and the cost that sold will go up the difference between the two $60 will be the net income but that's not going to happen here because we're just doing the purchase order which will not record anything let's go ahead and save and close it and let's say we purchase two of those and there we have it so $200 $200 and we could then add line items if we wanted to purchase multiple lines we could purchase multiple things from the same vendor and add the multiple different items we're adding down below we can add lines, clear lines, we can have a message to the vendor, a memo we can have attachments if we need we can cancel, we can clear we can print it so if I look at the print we get a preview form now this form because it's actually going outside of the company unlike the bill form and the pay bill form it's a little bit more important to customize it to whatever you want so you can customize this form put your logo on it and that kind of thing but right now we're just looking at it in terms of what's going to be recorded from it so this is what it would look like when it be sent out and then we've got the make reoccurring if we needed to more we can copy it, we can delete it we can look at the audit history we can save and close it, we can save it or we can save and new save and send that of course would mean that I'd have to have an email address here which is normally the way that we send things out these days because everything is basically electronic so I'm going to say save and close and then we can go back, let's go back into our expenses notice nothing will happen on the financial so I'm not even going to go into there because nothing's going to happen but if I go into my purchase order forms this is where we can track them if I had my purchase orders there they are we filtered them by the open purchase orders and here we have our open purchase order right there boom we have the options on the right hand side once we receive the goods then we can copy it to the bill that's what we would it be expecting to happen at a future point if I go into the contractors I'm sorry vendors I look at vendor number 10 notice I have two purchase order open purchase orders vendor number 10 there's the purchase order so I can go in here and once again copy to a bill so once we actually receive whatever it is we're going to receive if it were coffee cups for example and I receive them then these are the two areas I might then go to record I imagine that I get the coffee cups the coffee cups that I ordered that I'm going to then sell to someone they have a a bill in them right and so now we're going to enter the bill once we receive them before I do that though note that if I go back into this purchase order I probably should have noted that we still have like this customer field right here so the customer field is something like if I was purchasing coffee cups or whatever it is that I might be purchasing there might be two reasons for me to do that if I have a store that I'm working in if I had like a Shopify store or something like that or an on-ground retail store then I'm probably just going to buy a bunch of coffee cups to stock it up to try to try to have enough for whatever sales are going to come up shortly but if I'm in more of a custom shop if I have custom guitars custom surfboards or something like that I might already have a commitment by a customer to be purchasing the goods for that particular customer so you could put the customer here note though that the customer doesn't actually change like the vendor doesn't care who the customer is when you put the customer field in here it would only be for internal tracking purposes so meaning you're going to turn around from the purchase order once you receive the information you're going to create an invoice from it now you could try to tie all this stuff together meaning I can enter the customer here and then when I enter the bill I can make the bill like bill a billable item which will then pull into the invoice but it doesn't actually work as smoothly as it does in the desktop version that actually works quite smoothly the reason it doesn't work as smoothly here is because the billable item when you pull it into the invoice might pull in just the cost as opposed to the sales price right so but you might put it in here for internal use so you might say this is like customer I'll make a new customer customer one and so now this is going I'm purchasing this for customer one I'm going to say ok and then save and close alright so the next thing that would happen we get the coffee cups or whatever in our warehouse we open them up there's a bill with it so we could go into the expenses and we could find it here and we could say ok there's the purchase order that we received or we might go into again the actual vendor and find it there either way we could select the drop down and copy it to a bill so if I copy it to a bill there we have it and notice the vendor is already populated up top and then down below there's nothing in the categories of course but there's the item is populated down below now it's possible that if you can also enter the bill and type in the vendor and it should connect so if I close this back out for example do you want to leave without saving I'm going to say yes and I just hit the plus button and I said that I want to enter a bill now and I put in the vendor and I said this is vendor number 10 vendor number 10 then you can see this pop up on the right hand side is saying hey look I'm paraphrasing QuickBooks is like hey look there's a purchase order of 1005 do you want to open it or add it you can open it to check it out we can add it and then we could say yes please add that thank you QuickBooks for letting me know and then if we tap through this so it would be just a normal bill let's put this on bring it up a couple days and then there's nothing in the category and then here is our item so just like we saw before what's this going to do it's going to basically increase the it's going to increase the accounts payable and the other side is going to go to inventory this time because we're on the inventory side of things because we pulled this over from a purchase order note that the customer pulls in this way which is a good indication for us to then make an invoice for this so that will tell us hey look the bill came in we see that there's a customer field so I can turn around then and actually make an invoice from it now you might think that I can then check this billable item here and pull it into the invoice I'll just show you what happens and why that what's an issue with that and also like later we'll talk about how to turn this billable item on this often is not on by default you would only use this if you're if you have these expenses that you want to then pull over and create an invoice from which is often the case for for people that have a job cost system but let's save it and close it save it and close it and then the next thing so now we actually recorded the bill so if I go to the balance sheet and run it we could say okay the bill has been recorded in accounts payable AP okay and then oh wait I needed to change the date let's change the range up top we're working in the future we're okay not now not now quick books oh one oh one two four twelve thirty one two four tab and let's now go into the AP and we can see there's our bill increases the accounts payable and then the other side doesn't go to the income statement because we bought inventory so now I'm going to go into the inventory and we can see it's been tracked here with an inventory and then I'm going to go back and I have two sub ledger reports now once I've recorded this one for the inventory one for accounts payable so let's right click on the tab to the right and just check that out again and we're going to go down and see to do reports and let's go close up the hand bogey and let's open up who owes what you owe and this is the vendor balance detailed report boom and so we can see there that we have cut vendor ten there's the two hundred the one thousand eight oh two sixty seven tying in to the one thousand and the one thousand eight oh two sixty seven and then let's tie in the inventory sub ledger let's go to the tab to the right right click duplicate it again and we'll go into the reports and I'm going to type in inventory valuation summary close up the hand bogey and this now is tracking our our inventory right so we have the inventory for what did we just item one we purchased the item wait a sec the date's not right twelve thirty one two four run it okay so now we've got our item that we purchased there's two items there it is now this is the added kind of worksheet or detail that has to be tracked and this is actually somewhat complex quickbooks has quickbooks online the general quickbooks online has pretty good capacity to track like a general inventories but when you get into more advanced inventory complexity then you might have to level up or think about how you want to put that system together so and also just realize that if you have a minimal amount of inventory and you're using some other system like an external worksheet or a supply store to track your units of inventory then you might not want to track the inventory within quickbooks so we have we might have a section on like the Shopify store and stuff and we'll talk a little bit about inventory more especially when we get into the bank feeds but just be aware of how if you have inventory how are you going to do it right you want to think through it a bit but in the case this ties out to seven ninety six twenty five the balance sheet is now at the seven ninety six twenty five now what if we paid off that bill just to show you if I if I now turn I mean if I made an invoice now for customer one see here's customer one and notice it says hey I can pull in this billable item because we made it billable which means I'm turning around and now I'm going to sell it to the customer I'm going to add it and I'm going to say okay and and you can see it added it but it put it in there at the at the cost as opposed to the sales price see if I put the item down here again and it's actually it should be for three hundred and twenty because it pulled it in the cost so so you can kind of use that as a work around but you have to be really careful we'll talk about that more a little bit more later I don't know why it seems like they have the item here so it seems like I would have thought they would have been able to figure out how to do this so it pulls in the the the sales price because it actually works on the desktop version quite well so this is one thing that's still like I'm still I can't believe that I mean I feel like they should be able to fix that but that's the way it is right now so I'm going to close that out and say do you want to leave without saving I'm going to say yes and I just want to show real quick in the settings where those billable items are so you can see where they are so if I go to about a cog up top account and settings and you go into the expenses on the left hand side this thing right here where it says expenses and items billable and it says track billable expenses and items as income I don't think that's on by default we'll see this when we start a new company file and we'll look at all these settings so if you're looking at a different company file that's not in here then that might not be on by default if you're starting from scratch that's where that billable item would be and that's where those added fields come into play when we go into say a bill form and the purchase order form where we have this field on the right for a customer even though we're entering a bill so we can possibly pull it over to the invoice we'll talk more about that later