 Zero Accounting Software 2023. Apply customer deposit or credit to an invoice. Get ready to be 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. We are in our custom zero homepage going into the company file we set up in a prior presentation that being get great guitars. We're going to duplicate some tabs to put the reports in like we do every time right click in the tab up top to duplicate it right click in the tab up top to duplicate it again back to the tab in the middle accounting drop down we want the balance sheet tab into the right accounting drop down we're going to pick a variant of the income statement the comparative income statement we created in a prior presentation if you don't have that report you can just open a normal income statement we're comparing January and February February being the month we are working on back to the middle tab let's go to the drop down on the dates we want to take a custom date here for 2023 go into the end of 2023 and we will update to get the updated report. Okay so let's go back to the first tab now and we're going to continue on with our scenario of our customer deposit so that we think that scenario let's go back into our flow chart this is a QuickBooks desktop screenshot but we're just looking at it for the flow process remembering we're on in essence the revenue cycle and the revenue cycle will be dictated not by just how we want to do it cash versus accrual or so on but by the industry we are in but whatever system we put in place we would expect at the end of the revenue cycle the checking account to be going up for goods and services that we provided now normally what happens is we do the work at the same point in time or we do the work before we receive the money but we had a situation at this time where we got the money first in our case thinking about a customer deposit so they wanted a guitar and we said okay we have to order it for you or get it or whatever in order for us to go through that hassle we would like you to give us a down payment to show that you are committed therefore we've got money from the customer before we did the work and that's usually recorded as a liability right we got money we didn't do any work for them we either owe them the money back or we owe them the work and or in our case the inventory the guitar so zero has a really nice system for recording those unearned revenues which allows us to record it I'm going to the balance sheet as a deposit to the checking account and the other side instead of recording a negative receivable as we might do in some other softwares and have done in some comparative example problems if you're making comparisons between this and Excel or a QuickBooks online or something like that we could instead create this liability account which is what we should do from an accounting standpoint but which is often problematic from a sub ledger standpoint because the accounts receivable is the account that ties out to the customers and what we want to do now is make an invoice that will then apply out the credits that are tied to a particular customer which zero if I go back to the first half is able to do even though they created that liability instead of accounts receivable so if I go to the business drop down and invoices I can see these pre payments here so that's great so let's just imagine then that the process that happened usually if they call in and they want and they want a guitar and we're going to make an estimate we probably make a quote for them an estimate to determine how much of this down payment we're going to have as a down payment so for example when Mr. Anderson here called in we could imagine them calling in and we might create the plus button a quote form an estimate type form so I'm kind of going back in time and the process that we would be thinking about here and say okay they're calling in Mr. Anderson and we're going to say okay let's make a quote for what you want and this is going to be Anderson guitars calling in and we'll say this happened on to Feb twenty five again Feb twenty five and quote number reference currency branding theme project we're not assigned into a project tax exclusive all right so the item we're going to say that they want an EPSH so they said I want to pick up an EPSH and we're just going to say all right they want two of those so now we're imagining and we're talking to them on the phone for example and we might make our quote instead of making an invoice to help us to determine how much that would cost right and then I would go down and say okay and they also want an ELP or standard ELP and they just want one of those so that would come out to 500 and and then once we have the quote if they say okay I would like to purchase that then we might have some kind of policy which would say hey look what we need then is an amount down which we might have a standard like we need 10% down or something like that where we can try to collect on the down payment at that point in time with the received money form that we put in place and and then we can record this quote if we wanted to and then when they come in to fulfill the order we can use the quote to finish up the process so for example I could say we're gonna we're gonna save it let's save this and so now we have our quote in place and so then if we go into our business information up top and I look at the quotes we could say Mr. Anderson comes in and wants to finish the the process we have the quote there we saw that the prepayments were there under the prepayments for the invoices and we can also see this from hold on there they are from the contacts if I go to all contacts I could also go to Anderson this way and check it out in here so we're gonna say Anderson guitars and within here we've got the quote amount and we've got the prepayment that has been put in place so now when they when they want to complete the order we've got everything kind of in place to do that so I think oftentimes you might do this so now we're gonna we're gonna complete the order here you might do it from this screen if they come in or you might do it from that quote screen so here we've got the quote and we can say view and let's actually go into it here I think it's created as it's at a draft right now in other words if I go into the business drop down and I look at my quotes I can see I haven't sent it so it's here as a draft so let's go here and say we send it and so I'm gonna say or let's just mark it as sent so let's cancel that let's just go into it and say we want to mark as sent okay boom and then I'm gonna go back into the business drop down and then go into my quotes so now within the quotes we have it sent so it's sent here and then from here I can check it off and say that we're gonna decline it or accept it I'm gonna accept it and so that pulls it over into the accepted area now it's accepted and the next thing is we can when we're done with the job in this case feeling finishing the guitar sale we can check it off and we can create an invoice from it so let's go ahead and create an invoice from it and then it's gonna mark as invoiced so that one's gonna be marked as invoiced okay perfect that's what we want to do and now it pulls it over into the invoiced area and now we have our invoice beautiful so now we've got Anderson we're gonna say this is gonna be February 25 our normal invoice process and it pulled everything in from the quote just like we would expect that looks great what it does not do is it is it doesn't have the credit that has applied in that's that's automatically be an applied applied in here however when we when we approve it we should get a pop-up that says hey there's a credit do you want to apply the credit out so let's just think about what gets recorded first and then we'll take a look at it so this is an invoice it's gonna increase the accounts receivable 1,365 but then it should be decreased by that credit that we already received the other side is gonna go to sales but only for the 1,300 the difference going to sales tax liability count 65 the inventory is gonna go down by the amounts that aren't on here but driven by the items cost a good sold expense going up by that same amount net impact on net income the increase of 1,300 minus the cost of goods sold also accounts receivable it's gonna be impacted by Anderson which should match it out against the credit after we do this and we also then have the inventory which is going to be tracked by unit as well as dollar amount so if I say approve then let's approve it and we get this pop-up then so it says our Anderson guitars has that $300 in outstanding credit would you like to allocate the credit to this invoice now remember we're using credit like if we talk to a client that's or a customer that's what we say it's a credit like it's a good thing we're gonna put this credit to your account but remember it's just a debit and credit it's it's on the credit side of the ledger and accounts receivable credit side of the ledger so it's a good thing for the customer because it's the deposit so we're gonna say yeah allocate it out here and boom so it does so so now we've got our allocation how much do we want to allocate it allows us now to be able to take that full amount or some other amount given us some nice flexibility again more flexibility than I think some other software has such as the chief rival quickbooks online so we have the amount due to invoice the credit that brings the total down to 165 so we're gonna allocate the credit and so so there we have it so the invoice is now updated so now we have our updated invoice that we can provide to the client that has the breakout of the line items down below so what's the only difference notice when we record this out this credit often kind of messes people up when you start to think about how this is going to be recorded on the financial statements because it's still just going to record the same thing we talked about before meaning increase to accounts receivable of 1365 and you're going to say yeah but they don't owe us 1365 they only owe us 1065 true but but that's because the 300 dollars they are they already gave us and it actually will that the the 300 dollars is going to be decreasing in essence the unearned revenue at this point in time so the unearned revenue is going to be decreased by the 300 dollars uh there so and then the other side of the transaction is going to go to revenue of the 1300 the sales tax is now broken out between those two categories still five percent uh and inventory is going to go down a cost good sold it's going to go up sub ledgers for accounts receivable should now be correct uh and the sub ledger for inventory so let's check it out so we'll go on to the balance sheet and let's say update it and uh so now the accounts receivable so if i go into the accounts receivable we have an increase for the invoiced amount uh the invoiced amount uh for for anderson guitars uh the the 1365 so there's that but then it actually allocated this amount out of of because this is the extra journal entry that is happening so notice what happened here and this is a little bit different than some techniques and other kind of software meaning it put the full amount on the books for the 1365 that's the full amount plus the sales tax and then it made another transaction of the 300 which is basically decreasing the unearned revenue and recording it here on the accounts receivable so the net then which is the 1065 which is the bottom line after the credit is basically being recorded to accounts receivable at this time pretty cool okay so then the other side of this is going to the sales so let's go to the income statement and check it out going into the sales if we may and it should be just like normal sales being recorded for the sales amounts the credit thing doesn't have an impact on this part of the transaction and then back on over here the difference is going to go into the sales tax payable just like it normally would uh no impact on i mean we're still recording the sales tax based on the sales numbers uh not taken into consideration you know the prepayment we're still paying paying it based on the sales price and then we had the inventory is going to be going down just like normal no impact from the advanced payment or unearned revenue on this whole side of things you would think so we're going to scroll down and we're going to say anderson these are going down by items driven by the items back on over if i go to the income statement cost of goods sold is the other side there no impact to cost of goods sold from the whole advanced thing this is just like a normal invoice stuff here the impact on or here here the impact on uh net income then is the just like normal the revenue minus the expenses cost of goods sold in this case back to the tab to the left we also note that the accounts receivable has a sub ledger let's open up the sub ledger tab to the right right click duplicate the tab and let's open up a sub ledger breaking out the receivables by customer accounting drop down reports and we're going to go down to the payables and receivable summary and so if we go into that then we have our receivables broken out here by customer anderson now only knows that 1065 which is what is still due after having applied out the credit on that one invoice the sum of these totaled into the 20,876.50 that should tie out to the balance sheet of 20,876.50 and the inventory should tie out just like it normally would so let's duplicate another report just to double check the inventory that it's doing what it should be doing too and we're going to go to the accounting drop down reports and check out the inventory list which is giving us a list of the inventory by unit and by dollar amount here's the units here's the dollar amount dollar amount at 5824 5824 5824 ties out to the 5824 there looks good now if i go to the internal reporting tab into the left and we take a look at our business drop down and we look at our invoices now we have applied out that prepayment should be applied out so it's been applied out here so anderson has that little yellow thing indicated i believe the prepayment applied out if i go to the awaiting payments and we see there there it is there so meaning a partial payment has been made because the full invoice was more than 1065 we applied out the 300 and so we expect then to be paid in the future for the remaining balance and we can just go from here like we normally would i can also go into the contacts drop down and we can go into all contacts and take a look at mr anderson here uh mr anderson causing trouble again mr anderson uh anyways so there we have this one and it's it's showing the prepayment it's showing uh the invoice uh the invoice partially paid of the 1365 so if i go into this item here then again it gives us the detail about the invoice what needs to still be paid the 1065 if i go back on over uh we could see that in like the summary amount that is uh invoice awaiting payment so again zero has a pretty pretty nice system for this prepayment type of situation uh that's quite nice now if you're following along with other software note it like like if you're comparing this i have some comparative uh presentations with like quickbooks uh then then i might many times in quickbooks what would happen is in in the receivable reports you would have possibly uh negative receivables we have two other client two other customers that we did this for where we where we said that they had a prepayment and sometimes like in quickbooks oftentimes people will make negative receivable amounts because because that's how you can basically easily track things within the customer section and so notice if you're comparing our problems in uh to to quickbooks a quickbooks problem we are working then you have to net out at this point in time the 20 876 50 of accounts receivable and the unearned revenue of the 450 so in our case in zero's case uh they have this system which allows us to to break that out kind of as we go without interrupting basically the bookkeeping side of things so that's what we will we will do here so that's quite nice all right let's open up a trial balance and see where we stand at this point in time so we're going to go into the uh accounting drop down let's go into our reports and type in trial balance because that's what we want to pull it up and if you type it it will come if you type it it will come so make sure you don't type anything scary like the mark like that giant marshmallow man in the ghost busters because then it'll you reap your destruction i don't know what i'm talking about so in end of december let's update this one and so if you are following along and everything ties out great if you were on last time but something's off this time the things that we changed were uh we did an invoice so the accounts receivable changed the inventory changed the sales tax changed the uh liability changed for the unearned revenue the sales line changed and the cost of goods sold changed so i think a lot of action going on with invoices here especially with those advanced payment invoices and whatnot so you would think one of those might be the thing that was thrown off even though we didn't do that many forms on the data input because of the complexity of the perpetual inventory system and the advanced payments that we were putting in play so um uh if there's something different try changing the date range drill down on the data and and go to the source document change the date if that's what the issue is