 QuickBooks Online 2024. Create invoices using billable time, receive payment and make deposit. Get ready and some coffee because we're going to save time with QuickBooks Online 2024. 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 but that's okay whatever because our merchandise is is better than their stupid stuff anyways. Like our trust me I'm an accountant product line. Yeah it's paramount that you let people know that you're an accountant because apparently we're among the only ones equipped with the number crunching skills to answer society's current deep complex and nuanced questions. If you would like a commercial free experience consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com. Here we are in our Get Great Guitars 2024 QuickBooks Online sample company file we set up in a prior presentation. Opening the major financial statement reports like we do every time the reports on the left in the favorites. We're right clicking on that balance sheet to open link in a new tab right clicking on the P in the L the profit and loss the income statement to open link in a new tab and doing the same for the trial bounce the trusty TB. Let's tab to the right close the hamburger and change the range we're going from 010124 tab 022824 tab we want to see a side by side breakout month by month and then we will run it to refresh it tapping to the right repeating the process hamburger closing it then ranging changing it 010124 tab 022824 and then the month by month breaking it out and then refreshing the report tabbing to the right one more time uno vase mas here we go one more time 010124 tab 022824 tab and we will say we want the month by month breakout and run it to refresh it movie bn movie bn if we do the spanish spanish english movie good that looks movie good here we go let's go to the let's go to the balance sheet tab last time we entered our time imagining a similar situation as to a job cost system such as a partnership for a cpa firm or law firm like you might have seen in the devil's advocate movie where the guy was working for like the mafia or something but the law firm this is the point the law firm no matter where you're at the law firm is going to be like we i don't care if you were even just thinking about the client you have to bill the client so we can charge the client is the general idea here well we have a similar setup that we're basically have guitar lessons now and the guitar instructors we as the partners of the owner of the business are the money makers we bring in the people that want guitar lessons and then the guitar instructors teach them and we bill out for the guitar instructor's time so in a prior presentation we're imagining that a week has passed they've given us their time sheets we entered it into the system so that we can then bill the client it looks something like this this is a flow chart of the desktop system but we're only using it for the online system so that we can see the flow of the forms which is in essence the same so we're entering the time remembering that we could enter the time into quick books we could do it outside of quick books just giving us the time sheets from another software or possibly in an excel or word document and the time sheets themselves might not be used as we're not really using them in our case to populate the payroll and therefore we don't even need to have employees or the the employee system set up within quick books necessarily to apply this system because we might be charging our own time as the partner or owner we might actually do some work instead of just wheeling and dealing and pulling in the customers and what not and the clients and everything so if we did that we'd have to charge out our own time and we might want to track our own time on the stuff as well so uh so what we really want to do is enter the time here so that we can create the invoices that's what we are doing so whether we get the time sheets from an external source like uh like an excel worksheet or something like that or whether we're tracking the time in the system or not and we don't need employees to track the time necessarily right they might be a contractor or some other kind of system set up they might be another partner we might have an equity arrangement set up or something but we're entering the time into the system and then we're going to use that to bill out to the clients let's see how that worked if i go to the first tab you will recall that in the old system we used to have the drop down under the employees and weekly time entry but it looks like they're trying to move everyone to have the time entry now down here in this tab the time tab which you will have even if you don't have payroll turned on in the system most likely unless you have the like the the lowest tier version of QuickBooks online in which case you might still use the other method if they still have the capacity to use that if you needed to but we can still have the time we have the overview tab in the time here we have the time entries and we have the time team as well so we're going to be in the time entries we entered the time selecting the drop down we entered it on a week by week basis and then if we go into any of those time entries such as adam hamilton here we can see that although we entered it on a week by week basis it shows the time one at a time so if i was to view the time sheet then i can see the one time entry and i can go to the view the manual entry where we entered it as as a whole week's worth of data input the weeks up top and the individual items below and the service item making it billable that we set up so we set up a billable rate for the guitar instructors and we then assigned the hours to a client so that now we can use this to pull directly over and populate to an invoice to do this we went into our items to set the billable item up and now we can assign the item to the time that has been charged and we went in and we approved all the time so every all the time has been approved if we needed to make a change at this time we would need to unapprove as basically the supervisor and then make the adjustment before we approve again we did a similar process with Erica so Erica is our other guitar instructor and we charged the time to our generic customer number four so now we're just going to go in and we're going to see how that time populates and pulls in nicely once entered into our invoices let's go into the sales tab and we can go into the all sales this is one way that we can track it we got this filter for unbuild income now this is income that isn't on the income statement when we say it's unbuild that means that we haven't we haven't charged when we do that again there it is we haven't charged for the income so we have this time in there and we haven't yet charged for it yet no impact on the financial statements yet these are just an internal document thus far if i go to the customers we can do the same thing i can look at the unbuild income and now i can see the customers that those unbuild income items are four so we charged two Adam worked on two customers two clients guitar lessons and then Erica as well so if we go into one of those we can see for example customer number one has this time charged in there the next step would of course be to create an invoice now we could do the easiest way to do this would be just simply to select convert to invoice and it would then populate the invoice now we could also pull in the billable time here and add the other billable time you can see this billable time has been added but we really want to add both of the billable times into the invoice so i can add this one as well so now we have both of our billable times if i tab through this this is customer number one and as of let's say oh two twenty seven two four let's say it's going to be the date i'm going to close this back out and close this out get out here and then down below we've got the Adam hourly Adams hourly guitar lessons and i should probably put that so add them i should have put this in the description on the items guitar lessons let's say that on the description boom boom and seventy five dollars each they're linked we can see of course to the billable time so that is good if you click on it it'll take you to the time entry which it shows in a card as opposed to the entire time entry that we did week by week so that looks good it's not taxable because the item that we set up was not taxable we charge seventy five dollars per hour two hours on two separate days and that comes out to three hundred dollars so there's our our invoice the uh recording of it's pretty straightforward because there's no inventory involved it's an it's an invoice what's it going to do it's going to increase the accounts receivable the other side's going to go to revenue driven to service revenue by the item here and the sub account for the customer accounts receivable will be impacted by customer so see how easy that we can save and send it this is what this is all the partner does they go they go out and they they wheel and deal and have nice meals and whatnot and bring in clients and then they and then they tell people to work and then they charge for the work that the that the all the staff did this is how this is why you try to be the partner apparently you know apparently because that's what any case that's tough work as i'm i'm just being i'm just kidding going out to try to wheel and deal and pull in clients is not i don't think it's easy some people like it but i'm not not my favorite thing i'd rather just grind it out doing the account in a case let's go back into this we're going to say that we have the accounts receivable and we're going to say that there's there's the three hundred dollar uh three hundred dollars to to do for uh our invoice here it is this one this is the one we made and that looks good okay the other side closing that back out back let's go back to the income statement the other side's on the income statement running that one it went into our service income there's the three hundred dollars there looks like it should and so that looks good and then if i go back then uh we can see that there's no cost a good sold because we didn't sell inventory there should be a sub ledger for the accounts receivable let's open up the sub ledger report right clicking on the tab to the right duplicating it so that we can go to the reports on the left and then close up the hand buggy and scroll down who owes you and we want to go in by the way you can you can also run these reports for the unbilled charges and unbilled time i don't think these are super useful because you can kind of see them internally but possibly if you want to see them in report format for the time entered that has not yet been invoiced you can check those out but i want to go into the customer balance detail right click open and if i go into that one we can see it's for all dates hand buggy closed and there's customer number one three hundred dollars owed to us if we add up all the customers we get to twenty one two fifty six fifty that should tie out to what's on the balance sheet twenty one two fifty one two fifty six fifty if i go back to the internal uh information to the sales area and we go into the unbilled income it has now uh if i click on it unfiltered it that one charge should be gone now for for customer one is gone and then if i go into the customers and if i went into unbilled the customer one is gone because now we've we've uh if i go into recently paid then actually not recently paid let's just clear the filters and go into customer number one all right and so there's the two time charges have been converted you could you could view them if we so choose over here it goes one by one modify this time sheet does not uh update the associated invoice so uh do you want to continue i'm just going to say no close it yes and then the other side is in the invoice of course and the invoice has not yet been paid here's the activity of the invoice and if we were to edit the invoice we can see the time entries have been uh have been pulled in here we see the nice little link to see how they are connected together everything fits together nicely and has a nice beautiful audit trail now let's go ahead and just receive the payment the next thing that would happen would of course be that we've received the payment so the next thing we could see the the invoice here and we could just say okay now we're going to imagine that we got paid on the invoice so we'll go into that customer number one let's say that happened on the 27th as well i'm just going to keep with cash for the form of payment could be any kind of form of payment this is an internal form documentation we're going to put it into payments to deposit practicing the method of using that clearing account in the event that we're not getting electronic transfers for all of our payment and therefore need to go through the clearing account so we can group our payments in the format that will be on the checking account so we can easily reconcile with the help or use of the bank fees or just in the bank reconciliation process so there's the the invoice this is a receive payment form we know that the receive payment form is going to decrease the accounts receivable that's the first thing that should kind of come to mind although cash is affected that's probably a lot of people's first thing that comes to mind but you want to think this is linked to the invoice it means accounts receivable is going to go down the other side is going to be impacting cash in some way or checking in some way cash and cash equivalence but it's going to be going not in this case into the checking but rather into the payments to deposit the clearing account okay hold on before i do though i'm going to change this to february i had it in january change it to february we're on the second month of operations and then we will save and close it and then check out the balance sheet and let's run the balance sheet and then we should have accounts receivable going down so if i go into the ar the ar account accounts receivable is going down this 300 for customer number one here right there and then we're going to go back and then the other side is in the payments to deposit within that 400 400 that we have on hand ready to deposit so we've got the 100 or the 300 there so that looks good and then internally if i go back to my sales tab and we go into our customers we have customer number one so that is the activity for the customer we have this invoice that we have received a payment for if i select the invoice we can see it's been paid not yet deposited we're getting ready for the deposit we've got the payment up top which is closed and we can see the payment is now linked to the deposit if we if we edit the payment we could see the payment linked i'm sorry linked to the invoice and then we're going to make the deposit all right everything's lined up looks great all right now let's make the deposit so we're going to we're going to we're going to make the deposit from this we're going it's at the end of the night and we're going to say we have this money that we're holding on to that is in the payments to deposit of $400 we don't want to hold on to that there's crazy people around here we want to take it to the bank put it in the lock box where they've got security and insurance and whatnot so that's what we're going to do now even if you've got some other kind of payment if it was a credit card payment or something like that you'd still might use this account because i want to group it when i take it from here into the checking account in the same format that will appear on the checking account and so i might have to use a similar method if i have some other form of payment that has a financial intermediary such as a credit card let's go to the first tab to do that we're going to say the plus button up top and let's just go into a deposit form and we're going to say it's going into the checking account let's say 022724 is the date i'm going to deposit both of these note that one came from a payment which is the form after we have an invoice we received the payment the other came from a sales receipt the form used when we're at a check register both of them we are imagining our cash therefore although from different types of transactions we have cash on hand that we need to deposit into the bank at a lump sum of four hundred dollars now if it so i'm just going to select both of them if it was a credit card you might have another account down here called charges bank service charges or something like that bank service charges and then you might have to reduce it by whatever the bank charges you because they take it out of your money before they deposit it into your account so maybe they only hit your bank account with 350 instead of four hundred dollars because they charged you 50 and that's how you might account for that so that when the deposit hits your bank it's going to be there in the same amount that is on the bank statement so you can easily reconcile possibly with the help and use of the bank fees all right let's close that out though because we don't have that this is simply going to increase the check and account four hundred dollars other side's going to decrease the undeposited funds so let's save it you have to write date i do save it and close it let's go to the balance sheet balance sheet i balanced the sheet i could balance the sheet of paper on my nose i have talents here's the balance sheet watch this balance sheet action so we're going to go into the checking account here and there's the four hundred dollars been deposited mui b to the n let's go back and say don't day for crying out loud a star la ultra that's my spanish in english don't day for crying out loud a star la ultra transaction we're going to oh wait a second is that so yeah so then these so then these two went in there at one hundred and then three hundred and then went out in the same format one hundred and three hundred so we can tick and tie them going in and out and there is that and the format that is in the checking account should now be in such a format that we can do the bank reconciliation and match it out possibly with the bank fees let's go to the first tab now and i'm in customer number one and we can see now that the payment has been deposited so if i look at this invoice and i click on it we can see the full activity was open paid and then it even shows the deposit so we get the full audit trail which is really nice so now i would like to just basically add the invoices for the other billable customers but we're not going to go through the receiving of the payment so i'm just going to go to the customers here and i'm going to say that i want to see the unbilled income so there it is and then i'm going to say start invoice let's just go ahead and invoice them from here so i'm going to say start invoice boom and so let's say this one is as of customer number two both items have pulled in because i pulled the invoice in from that particular location instead of going into an individual invoice and then saving i want to invoice from the individual invoice so leave without saving no i want to just close this out and so there it is 227 i'll keep that the same and so then anderson these two 300 same thing is going to happen here it's an invoice accounts receivable is going to go up the other side's going to go to income it's going to go to a service income and the sub ledger will be impacted for the client let's go ahead this time instead of saying save and send i'm going to just say save and print we have the save over here let's do save and new this time so i'm going to do save and new and say that this time we're going to customer customer number two number three customer number three same thing now the billable items are pop populating over here i'm going to add them bringing them in we're going to use the same date we're saying it's the end of february now we're charging out for erica's time worked to uh four hours total so that's 450 i'm going to close this up the transaction being the same now for a new customer though increasing the accounts receivable because it's an invoice by this amount and the other side going to the the revenue account let's do one more we had one more and so i'm going to say save and new again altra vez another time here we go we're going to go this is going to be customer number four i didn't hear no bell that's from rocky he doesn't stop unless he hears bells i don't stop unless i hear bell because that's usually indicates that there's food so i'm going to then go through here and say this is erica once again same thing for the next customer in terms of the transaction increasing the ar the other going to revenue let's save and close it this time so let's just save and close and then we'll check it out real quick go into the balance sheet running it let's run it to refresh it we can see in the ar account if we scroll on down that we've got the customers for the ar numbers we had the one the two three and four customers we have the ar for good other side on the p&l the profit loss the income statement let's run it and then go down to the service product income check out the total for february and we can see that we have the february names uh where are they where are they but this is product income you're in the wrong area uh service income is what we're looking for in the service income we can see then under the names we've got there's our income there from the invoices looks good if we go to the sub ledger we're going to say sub ledger over here and run that one and we now see that we have customers uh two three and four that we're going to collect invoices from the total of the sub ledger broken out by customer 2217650 should tie out to the balance sheet of where 2217650 if we look at this internally go into the internal tab looking at our sales items we then can look at the unbilled items we shouldn't have any anymore because we have build them out we can then go into the uh invoices so now i want to say open invoices and there's our open invoices now and we can track those invoices on the invoices tab of course as well and we might say that we want to take a look at the unpaid invoices talvace possibly and then we can also then go to the customers and we can check out the unbilled income we don't have any because we'd have now build them out and then we can undo that filter and we can go into these individual customers such as customer number two and we can see that we have then the time charges have been converted and we see that we have the invoice and if i go into the invoice there's the converted if i go into the invoice we can see the link to the time charges so that's great so that's going to be our process this is where we stand now in terms of the balance sheet let's run it to make sure balance sheet that's where we stand and then the profit and loss this is where we stand on the p to the l the profit and the loss let's look at the trustee trial balance running that if your numbers tie out to these numbers and you follow it along great if not then try changing the range see if it's a date range issue remember that trial balance is the balance sheet on top of the income statement starting with assets checking account accounts receivable inventory investments payment to deposit prepaid insurance accumulated depreciation contra asset connect to the furniture and equipment the ppne that's one side of the coin what the company has measured in dollars not in units of inventory or equipment in dollars then who has claimed to that the liabilities and equity starting with liabilities accounts payable visa the government for sales tax the bank because we took out a loan and then the government for payroll taxes unearned revenue if we had any would be a liability and then our claim to the assets of the company in the format of owner investments which would be similar to common stock issued by the corporation if it was a if it was a corporation and then owner's equity similar to retained earnings and then the income statement with income minus expenses credits minus debits credits be an income debits mean expenses credits should win if we have income and therefore we can roll this whole income statement into this one number owner's equity which is basically the same as retained earnings which QuickBooks does automatically on a yearly basis let's check that out by changing the date range up top from 010125 to 010125 run it and you can see the income statement due to them being temporary accounts kind of like an odometer that instead of keeping it going forever resets after we do every trip in this case a trip of year long trip to see how long we go in a year reset the odometer but the odometer doesn't go away instead it rolls into the retained earnings or owner's equity this being kind of like the odometer for the lifetime right it's kind of right and then the income statement would be like the resetting of the odometer that's going to start at zero in each of the temporary accounts and then count upwards for the next year