 QuickBooks Online 2023. Financial reports generated from bank feed transactions. Get ready to start moving on up with QuickBooks Online 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 bank feed practice file. We started up in a prior presentation using the 30 day free trial. We also have open the free QuickBooks Online sample company. You can open the two at the same time by using the incognito window or another browser to open up the sample company. You can open incognito if using Google Chrome by selecting the three dots in the browser incognito window typing into the search engine QuickBooks Online Test Drive. We're using the sample company to compare the accounting view the one the bank feeds practice file is in and the business view the one the sample company is in. You can toggle between the two by going to the cog up top and switch the view down below. We're going to duplicate some tabs to put reports in by right clicking the tab up top and duplicating it and then do it again right click and then duplicate and then back to the tab to the middle open up the financial statements and the reports on the left one of them being the big balance sheet the famous BS balance sheet and then note that in the business view the reports are located in the business overview by the way and then the reports on the left hand side that's where they're at. Let's go to the tab to the right open up the other famous and recognized report everybody's favorite the income statement or profit and loss it has multiple names because it's so famous and people you know generate nick names and stuff when they get famous like reports do that too. So we're going to change the range up top we're going to go from 010122 tab 123122 tab run it to refresh it and then let's tab to the left and then close up the hamburger scroll up top and then change the range going from 010122 tab 123122 tab running it to refresh it that's the setup process we do every time and prior presentations we have been constructing our financial statements primarily from the use of the bank feeds. So if I go to the tab to the left just to note where the bank feeds are they're in the banking tab on the left banking up top so we imported this information by the way in the business view the bank feeds are in the bookkeeping and then the transactions and then the bank transactions. So we imported the data from the bank feeds for multiple financial institutions checking accounts and Visa and PayPal you can do that with that as well and then we used the bank feed limbo to add the necessary information which includes the account as well as the vendor and customer oftentimes to pull the information from bank feed limbo into the promised land of the financial statements either creating or double checking what has been created in the financial statements with the financial transactions. So now we want to go to the end result what has been constructed on the financial statements and basically see if we can deconstruct see what has been happened and drill back down to get a better understanding of what has been constructed and when you you can use the bank feeds to basically create your financial statements and when you're going to have to use the bank feeds to double check your financial statements. So we took a look at this in the past with the use of a flow chart remember that if you're on a cash-based system you can kind of break out that thought process as to whether you're on a cash-based system for the expenses side of things cash outflows and the income side of things cash inflows at the end of the process. A lot of small businesses might be on a cash-based system one that they can depend on in essence the bank feeds to record transactions on the outflow side of things but maybe in an industry that they still need to do something a little bit different on the inflow because they have to deal with a cash register situation or they have to invoice meaning they have to do an accrual kind of thing on the revenue side of things. So that means that the bank feeds will act a little bit differently as either something you're using just to construct your books from in the simplest case which would be great if you're in an industry where you can do that or they'll be a little bit more complex as we've discussed if you have to do an accrual kind of component or a full service accounting system. So now let's kind of think about what has been constructed remember that the major two financial statements are the balance sheet and the income statement. So oftentimes when I'm entering the transactions I'll have these two things open for the year that I'm currently working on or you just might do it for the year to date that you're working on you also might use the trial balance as we've discussed from time to time in the past let's open it up by right clicking the tab up top duplicating it then we're going to go to the reports on the left hand side I usually open the trial balance by simply typing in up top trial balance if you use it a lot you can save it by putting a little star next to it so that you have it in your favorite reports it's in the accounting or for your accounting account group down below and this basically let's do a range change 010122123122 running it this is basically the balance sheet on top of the income statement and it's much more streamlined and therefore easier to kind of drill down on sometimes easier to have one report open rather than two reports as you're doing the data input and you want to kind of double check your your numbers and drill down on what has happened all right let's go to the first half now I'm going to switch this up a little bit so that we can see a month by month side by side report these are some of the things that you can do with the major reports balance sheet income statement you could have a summary balance sheet and you could make the balance sheet comparative balance sheets to a prior month have multiple months in it you could have prior quarters or multiple quarters in it and you could do comparative balance sheet reports so if you're doing your own reports or if you're a bookkeeper making reports for others then you have to think about how do I want to present these reports you almost have like an infinite number of reports just from the financial statements once you start comparing month the month year to year period to period and then do multiple months or multiple periods and then comparing to the prior year and doing difference analysis we'll talk about that in a little bit more in a second but for now let's change the range I'm going to go from because the data that I put in here I think was from 080122 to 103122 and then I'd like to see it on a month by month breakout so I'm going to say month by month and then run it so that gives us my side by side for the three months of data input because this is a balance sheet this is as of a point in time note that if I do the same thing on the income statement because it's a timing report if I take this from oh let's take it from 080122 to 103122 and break it out on a month by month run it that gives us the three months and the total for those three months because the income statement is a performance report showing how we did over time and the balance sheet basically is just showing us where we stand as of the end of each month the last day of each month so let's just go into each of these accounts now and kind of drill down on them a bit to see how they have been constructed as we've been doing the data input now clearly the most complex account is the cash account so if I go into the cash account we're going to have the most detail in the types of transactions in the cash account we've got deposits we've got expenses we've got transfers because the cash is the lifeblood of the company that's why we need to do the reconciliation and obviously the bank feeds feed in directly to the cash transactions if all your information is coming from bank feeds then you would expect that you would just have deposits and expenses and transfers and possibly credit card transfer transactions in in your checking account as opposed to having like sales receipts up here or receive payments in here you can sort your cash transactions by customizing them and filtering the transactions generally usually by type so deposits checks expenses so on all right so that's clearly one of the main account that we've been focusing on with the bank feeds now the accounts receivable note we have something in here but you would only have accounts receivable if you had an accrual component so that's on the revenue side of things if you're constructing your books from the the checking account you're just going to construct with deposits you won't have accounts receivable if you're at a cash register then it's a little bit different but you still won't have accounts receivable only when you're invoicing for work that you did and you have to track the receivables to have them pay you will you have accounts receivable accounts receivable will go up with invoices and down let's go let's 10 3122 and down with payments up with invoices down with payments notice there's only basically two things you expect to be happening with the accounts receivable that's them there's also going to be a sub ledger report for accounts receivable tracking by by customer that you're going to have to deal with we'll take a look at those in a second those other reports inventory also an item that's basically an accrual component so remember if you have inventory you could try to stay in a cash based system meaning when you buy the inventory you just wait till it hits the bank and you record it as cost a good sold when when you have the the expense through the bank feeds and then you just record the revenue side when you sell the inventory but if you have any significant amount of inventory you're going to have to deviate from that put it on the books as an asset either use a periodic inventory system or a perpetual inventory system if you use the full inventory system a perpetual one then you can't really use the bank feeds you got to deviate from that as we discussed in the past because you're going to have to sell the inventory with an invoice or a sales receipt in order for it to track not only the dollar amount of inventory but the units of inventory in a sub ledger so then we have like investment accounts so we talked about some of the issues with recording an investment account which you could wait till they clear the bank fee to record an investment and like stocks and bonds record the interest and dividends but to record the capital gains and losses you might have to you might have to tie that out to the bank statements and do an adjusting entry periodically I won't go into that in a lot of detail here but we talked about that before and then we've got the equipment so remember with the equipment notice if I go into it and I change the range to 10 31 2 2 we don't have a lot of activity in the equipment such as we did in the cash account or would have in other accounts like accounts receivable if we use a accounts receivable all the time in a day to day transaction because we don't buy property plants and equipment all the time we just do it periodically so therefore the dollar amount is often significant large and it's something we need to track because we got to put it on the books as an asset even if we have a cash based system because the tax code is going to force us to do it meaning we're deviating from the cash based system to an accrual based system because we have to and we're going to want to give this information then to our tax preparer so that they can they can make the financial statements from it or make make a depreciation schedule from it using the tax software oftentimes that's how we'll set it up now accounts payable like accounts receivable is an accrual account so if you had a flowchart and you're just paying all of your expenses with electronic transfers or credit card payments then you're not going to have an accounts payable it's only when you start to enter the bills and then track them and pay them at a later point that you would have accounts payable usually larger businesses start to need the accounts payable because it becomes more important to pay the bills as late as possible as the dollar amounts go up and the number of transactions go up because of the time value of money becoming more significant with larger dollar amounts the credit cards like we looked at can be done with the bank feeds so with the credit cards you'll have similar information if you're using credit cards a lot as with the bank account but it should be more simplistic oftentimes for many companies because the expense forms will be similar to what you'd see in the checking account coming through the bank feeds but instead of decreasing a checking account or a cash account they are increasing a liability account and you don't really have to deal with the deposit side of things because the other side will typically be a payment a credit card payment out of the checking account paying off the the credit card account so there's only going to be those types of transactions a lot of expense transactions for the things that you're purchasing and then the payment of the credit card is what you would expect to see here tying this information out of course to the bank feeds and then the sales tax remember that the sales tax always throws a wrench into the system so if you want to use the sales tax within the quick book system then you're going to have to integrate the invoices and sales receipts because those are the things that calculate the sales tax otherwise if you want to make your sales recorded with a deposit form using the bank feeds you're going to have to manually calculate the sales tax in some way shape or form which we talked about in the past our loans can be we saw the loans going on the books which can be a little bit tricky we'll see the loans go on the books if cash is affected if we finance the equipment it could be a little bit tricky and then we have to deal with those amortization tables breaking out the interest and principle which messes up the bank feeds a bit and then down here we have the equity side of things this is the owner's kind of claim to the assets in the business because remember the accounting equation is assets equals liabilities and equity so if this is what the company has liabilities represent a third party that has claimed to those assets the bank oftentimes and equity represents the owner's claims to the assets now the equity though could be a little bit different depending on the type of of organization if it's a sole proprietor you would expect to see the account that you rule stuff into called owner's equity you might still call it retained earnings because that's that's the account that quick books often gives you but i changed it to owner's equity because that's the name you would expect to see oftentimes and then the opening balance equity you might have something in there but we should probably clean it out i won't do it here but it's not really professional to have something in owner's equity because it's kind of like a a plug account for quick books to to be in balance and the draws represents money that has been pulled out of of the business and an owner investment would be the owner putting money into the business now if this was a corporation same kind of idea except that the owner's equity would be called retained earnings the earnings that have been accumulated that have been retained that haven't been given back to the owners or drawn out by the owners not with the form of a draw but in that case in the form of dividends draws would be dividends and then you'd have the investment owner the owners investing in the company would be called the capital stock the issuance of the stock would be the investment so the stock that means that the value of the company has been basically cut down into fixed units of stocks as opposed to like a partnership which is a little bit more complex actually oftentimes than a corporation because then you have to track the owner's equity per partner each partner's claim which is not always equal claim as it is like in a corporation and therefore you have to track it in accordance with the partnership agreement and that can get fairly complex so that's the general balance sheet on the income statement we saw that we have the income accounts which usually we would only I have a couple income accounts like service items and items for inventory in income because then we would have a sub ledger breaking out the information by customer if we wanted to or by things that we sell service items or inventory items however if we're constructing our books from the bank feeds we lose that added detail because we're not using the forms designed to provide it that being an invoice in the sales receipt but rather using a deposit form which doesn't have that capacity making it more likely that we just want to enter our income accounts by name like who paid us like the platforms that's why we ended up with amazon audible blah blah blah that who who gave us the money and then of course you've got your cost of goods sold which you would only have if you you had inventory that you're dealing with same inventory issues we talked about before you can have a a cash based system but you're probably going to need some other based system and a cruel based system and that means you got to do a periodic system or perpetual system and then all of the other expenses most of the expense accounts have been constructed as we made cash payments or credit card payments and so they're usually going to be constructed if you're building them with the bank feeds with expense type forms so and that's usually where you have the most accounts down here and you have the most kind of flexibility and the biggest necessity to kind of determine how you want to group your expense accounts do you want to have a lot of sub accounts do you want to have a whole bunch of accounts or have a very limited amount of accounts and so on and then you've got your other income down below so now let's look at some of the other reports i'm just going to kind of list them out quickly i'm going to duplicate this and just look at some of these other reports just to see how they kind of tie in so you got you might be overwhelmed you're going to look at all these reports and say well there's a bunch of reports down here so note the business overview reports you got an audit log i won't go into that in detail a balance sheet comparison is really just a balance sheet that they have then made into a comparison report balance sheet detail similar thing balance sheet summary is just another balance sheet but now they've limited they've only given you basically the the account categories instead of all the actual accounts within standard balance sheet business snapshot gives you like a snapshot view of it i won't go into that in detail and then the profit and loss percent of total income it's just another format of the income statement or profit and loss we can construct that if we want to profit and loss comparison another format of the standard profit and loss you could build that from a profit and loss report profit and loss detail and then the profit and loss year to date comparison just another comparative report profit and loss by class which we would only have if we had class tracking turned on we gave some examples of that profit and loss by customer just another format of the profit loss you can build it from a normal profit loss profit loss by month just another format of the normal profit loss you can build it from a profit loss profit loss by tag which would only be relevant if you were using the tag feature and then the normal profit loss and then profit profitability summary i won't go into that in detail quarterly profit and loss summary these are summary reports and the statement of cash flows that is another important report it's going to be and it's another financial statement report and it's it's you don't we don't normally open it with the the profit and loss or income statement and the balance sheet even though it's a major financial statement report because it's really being constructed from those other two financial statements and it becomes more and more relevant if you're not on a cash-based system which we kind of are because we constructed our books basically from the bank feeds because if you're on an accrual system then you also want to see the cash flows so the cash flow statement kind of helps to give the best of both worlds in an accrual kind of income statement and then the cash flows give you more of a cash flow kind of statement so it's an important report but i won't go into that in detail here who owes you these are all going to basically be giving you more detail generally on the balance sheet account of accounts receivable which you'll only have if you're tracking accounts receivable if you issue invoices so so if you're constructing your books from the bank feeds you won't need most of these so accounts receivable aging accounts receivable aging summaries let's just take a look at it this one gives you how outstanding the balances are and if i put this as of uh let's say 10 31 22 it also gives you this information by who owes you the money the point is that that 919 25 ties out to the 919 25 on the balance sheet so it's giving you more detail about a balance sheet report our collections report customer balance detail deals with the same accounts receivable customer balance summary same idea invoice list invoices are the things that make the accounts receivable balance similar report invoices and receivable payments similar thing open invoices open invoices you would think would give you the accounts receivable balance statement list terms list these are lists for uh or terms that you could put on an invoice like 30 day net 30 and so on uh unbilled charges these are charges that you had billable from an expense form or time a billable time that you can create an invoice from which you wouldn't be doing if you're constructing your books directly from the bank feeds typically and then we've got the sales and customers information we would expect this to be giving mainly more detail on the income item on the income statement so but it'll be less relevant oftentimes if we're constructing our books directly from the bank feeds so you got the customer contact links that's just a contact list deposit detail gives us more information kind of similar to the to the transaction detail if you just click on the deposit on the cash account on the balance sheet uh estimates and progress invoicing only there in certain industries that you're using like a job cost system for example so probably not there if you're building your books from the bank statement estimates by customers so these are estimate form reports which is again only there on industry specific things typically income by customer summary so this is like an income statement but it's by customer so you can build that from a normal income or this is income by customer so this is giving more detail about mainly the revenue line item but also I think the cost to get sold but it won't be there uh uh if you if you construct your books using the bank feeds instead of making the income recording with a sales receter invoice uh inventory detail so obviously these reports would be summarizing the inventory so if I open this up inventory valuation this gives you detail I'm going to make this as a 10 3122 this this will track the inventory items so this 250 if you were tracking on a perpetual inventory system would tie out to what's on the balance sheet it does not hear because we put some stuff into our books without uh an item we posted to inventory without an item but if you were doing a full perpetual inventory system this report would give you the units of inventory tying out supporting a line item on the balance sheet which you would only be doing if you had a bit more complex a system than constructing your books directly from the bank feeds payment method list physical inventory worksheet product and service list this is a list of the things you sell sales by customer summary so now this is going to give you more detail about your sales line or would so if I was to say this is going to go from 101 122 to 10 3122 you would think that this numbers should tie out to my sales for the year to date on the income statement which is right here it doesn't of course because we made our sales not with the sales receipts and uh and the invoices but we constructed our sales not using these but with a deposit form so even though we added the customers it can't populate it's not populating the customer summary because we didn't use the proper reports to do though so we lost that detail by constructing our books from the deposit forms which is okay but we lose some of the detail sales by product or service same thing this would give us the sales line item not by customer but by what we sold we don't have that detail that reports useless if we constructed our books from deposit forms instead of invoices and sales receipts because we don't have the items in it so let's just go down who owes you all of these reports have to do basically with the balance sheet account of accounts payable which once again would only be there if you're on an accrual based system entering bills tracking the accounts payable if you're constructing your books from the bank feeds it's not going to be there and then expenses and and vendors uh what you owe expenses and vendors this will have to do somewhat with the expenses on the income statement 1099s have to do with a report for 1099 report filing which you you do have to kind of deal with even as a small business oftentimes if you're dealing with contractors you can go through your list of vendors and uh check off which of them might be subject to 1099 reporting and you can then issue them a 1099 check detail expense by vendor summary open purchase orders we probably wouldn't have if constructing of course from the bank feeds purchased by class detail uh these would be more purchasing reports tracking inventory purchased by product transaction list sales tax you would only be using these if you turned on the sales tax if tracking the sales tax within the system you would have to be using invoices and sales receipts rather than constructing your books just from the bank feed deposit forms employee ease would only be there if you had the uh payroll turned on and for my accountant some of the main reports in here are the general ledger which which gives you all your transaction accounts by accounts similar to like drilling down on the accounts the journal gives you all of your transactions basically in journal entry format which is a great tool to practice with and then you've got your transaction detail by date report which is also a great report also just note that your trial balance is here too now i just want to do a quick thing with our profit and loss i just noticed with our with our with our balance sheet and profit and loss reports you've got this way that you can see the profit loss by month you can also see them side by side by quarter you can also do a comparative report so let's compare two periods for example if i wanted to go from from uh let's say from uh oh nine oh one two two two ten and then i'm gonna say i want to compare these two by taking the previous period percentage change dollar change so now i just got two periods that that i want to be comparing to and i'm going to change this back to total and run it okay so now i've got two months that i'm basically comparing to and so i have the difference between the two and the percentage change that's a common report uh that you would also uh be be running and you also the other common report that you might change this into uh you can do a previous year comparison but i'm going to take this off and then run it again and so there's a there's back to the normal you also might do a percentage uh a percentage of the column and so now this is taking a percentage everything given a percentage of total assets those are common reports on the income statement you can do the same thing let's just but let's just bring this back to the totals but if you did that percentage column thing then you're usually taking the percentage of income percentage of income and which is which is a little bit counterintuitive but now you're comparing everything to total income because that's like the goal of the income statement revenue generation so that's just a quick look at kind of like what we've constructed a little bit of look on how you can see those reports and and a look at you know how all the other reports kind of would fit into these major financial statement reports