 Zero Accounting Software 2023, Enter Transaction, Purchasing Equipment, Using Bank Feeds. Get ready to become an Accountant Hero with Zero 2023. Here we are in our Custom Zero homepage going into the company file. We set up in a prior presentation the Bank Feed File. Duplicating some tabs to put reports in like we do every time. We're going to right-click on the tab up top so we can duplicate it. We're going to right-click on that duplicated tab and duplicate it again. Let's go back to the tab to the middle and the Accounting drop-down. We want to go into the balance sheet report, one of the major financial statement reports. Then we'll tab to the right, Accounting drop-down, and this time the income statement or profit and loss. The other major financial statement report. I'm going to bring the range of the dates back to 2022 because that's the data input range I'm adding to the system. So I'm going to hit the drop-down 2022 January to December of 2022 and update our reports. So we have just what we've entered from the Bank Feeds and the prior presentations tabbing to the left. We have 2022 for the point in time on the balance sheet that looks good. Let's tab to the left again. This time we want to be looking at our Bank Feeds. So we've uploaded the Bank Feeds in a prior presentation and the Accounting drop-down. If we go into our Bank Accounts, we have our Bank Feed information here. We'll hit the drop-down up top. I'm going to go into the Account Transactions and now we're basically in our Bank Feed type center. We're going to go into the Reconcile area as we have done in prior presentations. And this time we want to imagine a situation will be a little bit different in that we still have money going out, but instead of a normal kind of purchase that we're making for expenses that happen periodically fairly regularly and therefore lend themselves to bank rule creation quite readily, we are now going to be looking at the purchase of equipment, which is not something that happens on as regular a basis and therefore when we think about the rules and the account we set up, we've got to be a little bit more mindful of it. All right, so I'm just going to pick a transaction and imagine that the transaction is coming from the Bank Feed. So I'm going to go next here. I'm sorry. It's going to imagine that it's coming through the bank feeds for the purchase of equipment. It's hard to talk and look for the transaction here, but I'll just be quiet and find my transaction. There's the one. This is the one I want. So I'm going to pick this one here. So we haven't been entering any transactions on our end. We've waited till things clear the bank and now we're going to be recording them on our side. So we're going to basically do the same kind of thing we did last time, record the transaction and think about whether or not we want to make a rule for it. Now let's just take a quick look at the difference in a flow chart. This is a QuickBooks desktop home page flow chart, but we are just using it to look at the flow of transactions, which is basically the same for any kind of accounting system. We're looking at the outflow here. Now remember when the money is going out of the business, we're purchasing usually services oftentimes and goods that are short term, things that are expenses when we actually pay for them. Therefore, with the bank feeds, we can basically use a check form or a reduction of the bank type of form. And that works perfect. That's what we looked at last time with the utility bills and the telephone bills. However, if we're purchasing equipment, then you're basically going to have to deviate from the standard accrual or cash kind of basis and do an accrual thing, putting the equipment on the books as an asset. Now you might say, why do I have to do that? I'll just expense the equipment when I purchase it. But if you're in the United States, for example, just for taxes, the tax code is going to force you to deviate, even if you're on a cash basis from that cash basis to an accrual basis. And so you're going to have to do that on certain types of things. So that's why equipment becomes more complicated. You can see the rationale for that most clearly with something like a building. If you paid $100,000 for a building, what would happen if you just expense it when you compare January's performance on the income statement to February? January would look like a very bad month if you purchased a whole building and expensed it during that month, which isn't actually proper from an accrual standpoint because you're going to be using the building in the future and therefore you should allocate the cost over the useful life. And so that's the same concept with other pieces of equipment that you're purchasing, like a forklift or large equipment. So that means that when we're looking at this from our bank feed standpoint, the problem is we don't buy equipment all the time. It's not like a regular thing that we do, such as we do do with inventory or something like that. If I buy inventory or I pay for my normal utility bill, that happens on a fairly routine basis and the vendors are probably just providing that particular thing such as inventory or the utility, the electric or something like that so it's easy to make a bank feed with. But with large pieces of equipment, we're usually deciding something that we need at this point in time that we haven't purchased for a long time and once we make the purchase, we're going to be using it for a long time and we might be purchasing it from the same place that we purchase, say, supplies from. So if we just set up our bank fees to say whenever I purchase something from like a Home Depot or in our case, this series or whatever, then I want you to record it as an expense of supplies expense. We're going to run into problems that when we purchase large pieces of equipment, we might accidentally record it as an expense when we're going to need to in reality record it as an asset in order to comply with the tax code and whatnot for that particular purchase. So you might be able to think about kind of how can you set up your bank rules so that there may be there's dollar limitations to help you to determine to at least think over whether or not something should be expensed or put on the books as an asset. Now, the other thing just to mention when you're purchasing large equipment, for example, you might have a loan or part of it is financed. So you might be paying a down payment and finance the rest of it. If that happens, then clearly the only thing that you're going to see pulling through from the bank feeds, if you're waiting till it goes through the bank feeds is going to be the dollar amount here. So that came out of the checking account, not the financing portion. So you would have to then think about how you're going to be dealing with the financing portion. Now, you can enter a transaction so that you can include the loan that you're putting on the books or you could try to stay on a cash based system, for example, and work with an accountant to help you to shore these things up at the end of the year. So if you paid any money for the equipment, as long as you make sure to put it down on the books as equipment, for example, and then tell your accountant at the end of the year and say, Hey, look, I'm trying to stay in a cash based system. There was a loan kind of transaction that took place here. I've just record the payments to the loan to the loan account, but you need to shore up the transaction with regards to the purchase of the equipment and put the loan on the books for the proper amount and make the adjustment for short term and long term loan if you need to as well as break out the interest. So again, if you're working with an accountant and you're trying to automate everything, you might be able to come up with a system where you basically can kind of automate everything even when you hit some of these more complicated areas if you're able to yourself or work with an accountant that knows the system that you're doing and can make the proper adjusting entries to shore up those things that make it difficult to automate the bank feeds. All right, so I'm going to copy this and just say this is going to be the name and choose what it's for. I'm going to expand this down here. Let's add the details so I can add a new account when I choose what it's for. So here it is. The date's going to be good reference. We're not buying inventory, so no item. So this is good. Now on the account, we're going to need to add an account and this time it's not going to be an expense account. We're going to put it on the books as an asset type of account. So I'm going to add, so where the assets should be up top, I'll just say like one, two maybe. So I'll say add number. I'm trying to think of the code. One, two, one, zero. Let's see. I think that will be open. And then the account type is going to be a fixed asset. So it's a fixed asset type of account. I'm going to call it equipment, equipment. And that looks.