 Here we are in our QuickBooks Online test company file. We started up in a prior presentation. We also have open in a separate incognito window, the free sample company file. If you want the two open at the same time, we suggest using incognito window, which you can open if using Google Chrome by selecting the three dots in the browser, new incognito window, then typing into the search engine, QuickBooks Online Test Drive, looking for the option that has Intuit.com in the URL because Intuit is the owner of QuickBooks. The sample company being useful because it allows us to test things out in the sample company while not distorting the data in our test company file as we work through a practice problem. It's also useful to toggle back and forth between the accounting and business view in our example. The test file will be in the accounting view. The sample company will be in the business view. If you wanna toggle between the two views, you can go to the cog up top and switch the view down below. Now we wanna think about progress invoicing, which obviously has something to do with an invoice. Invoice is being found in the new button. There is our invoice, the form typically used. The form usually sent out to clients and customers to request payment. Usually to request payment for work that was done in the past. However, anytime we are requesting payment, whether it be for work done in the past, work currently being done, or work that will be done in the future, it's tempting to use an invoice because the invoice is the form that's easiest to convert to actually receiving the payment. It's the best form for requesting a payment. The problem comes up that it might not line up with our revenue recognition concepts and principles and that's what we have to kinda look at and consider when we think about the problem of progress invoicing. Now, if you do progress invoicing, you need to turn on progress invoicing. You can do that by going to the cog up top. We go into our settings on the left-hand side. We're gonna go into the sales tab and then scroll down to the progress invoicing. It's not generally on by default, so you gotta toggle the progress invoicing on and then say save and then we're gonna say done. Now, normally the process when you have a progress invoicing type of system will be that you're gonna be entering an estimate and then you're gonna be basically billing for part of that estimate in the future and that's gonna be setting up your progress invoicing structure. So let's just think about the accrual kind of problems with a progress invoicing system. The actual progress invoicing tool and QuickBooks is quite straightforward and easy to use. However, the concepts from accounting that they come into play as to why you need to use that system get more complex. So let's think about when you might need a progress inventory kind of progress invoicing system. Let's jump on over to a flow chart. Now, this flow chart is just a screenshot of the QuickBooks desktop homepage. We're using QuickBooks online, but this has a nice flow chart and we just wanna think about the normal flow of the forms and when and what type of accounting system and what kind of business a progress invoicing tool might be used. So we're focused on the revenue, sales, accounts receivable or customer cycle. At the end of that cycle, we usually expect to receive money, our checking account going up for goods and services that we provided. Now, if you have a very easy kind of system, you just do gig work or something like that, then we might be able to just record revenue with a deposit form possibly with the bank feeds when we receive payment. But you can only do that if you're in the kind of industry that will lend itself to that easy kind of system or we might have a cash register type of situation in which case we would be thinking of like a create sales receipt type of form, which basically records the transaction when it happens. So if you have a restaurant or something like that, then you're gonna be recording the sale when it happens. The work has been performed at the same point in time that you got paid. And usually you can't just use the bank feeds to record the deposits in that system because you're gonna have to collect all the payments for the day and then group them together by credit card payments or cash payments and then make a deposit into the bank. Then we have a system where we're gonna have to invoice the clients. Normally when we invoice the clients it's because we're gonna do the work first and then we're gonna be invoicing the client and we're gonna get paid at a future point in time. So we're forced to do that by the industry. So if we're in a law firm or an accounting firm the industry usually dictates that we do the work first we might have to track hours or what we actually did so that we can then bill the client and then when we bill the client the invoice will increase accounts receivable the other side will go to revenue and then the invoice will also hopefully make the facilitation of the receipt of the payment as easy as possible so the client can then pay us and then when we get paid we reduce accounts receivable and either put it into the bank or we put it into undeposited funds and then we make the deposit.