 We're gonna now go into these purchase orders either here searching for them here when we get the box of goods and then we're going to Make make a bill or a check form out of it at this point in time Now also just realize that if you had a larger company as the company gets bigger You might have someone counting The the inventory in like a warehouse or something like that oftentimes you would like them to be able to count the inventory without having access to the purchase order because then They'll actually physically count the inventory and they won't just know what the number is So that's one internal control you can kind of think about as you kind of as you as you scale up But typically we would expect the box of guitars to match the numbers that we had on the purchase order So over here, we've got our options of sending we can send the purchase order again We can copy it to a bill, but we're not going to make a bill this time We're going to make an a check or expense type of form And so we're not going to do this step this time instead We're going to go to the plus button up top and we can go to an expense or check form Remember these are two basically almost identical forms and that they decrease the checking account But the check form of course has a check number related to it Imagining that we're actually physically writing a check or printing the check out of the system So we're going to make this for epiphone I'm going to say it's for epiphone There's our vendor and then as we do that notice QuickBooks has this nice thing over here that says hey I'm paraphrasing we've got these two these two items and this bill down here. We're just going to add these items in To connect it out. So I'm going to say Purchase order. Let's add the information from the purchase order that you entered last time and then I'm going to add This purchase order as well. So we're going to add those Now if I scroll down we could see the activity, but let's just populate the top of it here Just to make sure I get everything the way we want it. It's a cash and we're going to say okay, mailing Let's pay. Let's make it as of the 14th this time. So let's that's good. That's good Day, let's keep it there and then I'm going to make the check number now that if I'm actually physically writing checks Then I'm going to start with one oh I'm going to put one oh four in the check number here to try to match our bank Reconciliations that will do at the end of this in our practice problem if you're actually writing the check then You could print it later Meaning you'd have to actually buy physical checks put them into the printer and then use QuickBooks to print the check or You might have a checkbook for example that you're manually writing the checks Which already have a check number on it and you want to make sure that you're tying out the check numbers here To the physical checks that you're writing which you should only have to do the first time you enter the check Because everyone after that should should automatically populate the check numbers Now also notes, you've got the links up top So if you got two links that are indicated if you click on that you can actually go to the purchase orders That are used to and and to populate here That is a really good feature within QuickBooks these links between the forms Which if you've learned accounting from just debits and credits and like a classroom You might not have a full appreciation of So you want to kind of get an idea of how all these forms are tied together notice that we're not using the so if I scroll down here We've got the check number. We're not using the category tag because we're not applying this check for something like the purchase of The telephone bill or something like that where we would just assign the category So I'm gonna collapse that but instead we're using the items the inventory items that we set up And then we put them into the purchase order So the items are gonna be what drives the transaction that will be impacted when we record this So we've got our list of items here that we populated directly from the purchase order And then we've got our amounts the amounts are the amounts at cost Not the not the sales price. This is what they put them on there at cost Also note that we've got these two people here that we have the customer added because we imagined that we bought these items specifically for this customer and we want to turn around and Make an invoice for them now that we have the items and this kind of gives us a reminder of that We also have the links over here that give us an indication that each of these line items are linked We could add more to this check As well down here with items that are possibly not linked and so on and you could you could sort these two if you wanted to sort them Notice that you have this billable option here If you've used the desktop version, this is one area with a desktop version I think has this kind of worked out a little bit better than the online version because you would think you can kind of check These off as billable items and then when you when you turn around to invoice Eric music I'll just test this out just to show you then Then these items will pull over into the invoice But the problem is I believe they're gonna pull over at cost instead of pulling over the sales price Even though we're using an item so you might be used to that with the desktop version You got to be very careful of it here I'll just show you what I mean right now But before I do that I'm gonna go to the tab to the right right click duplicate another tab I'm gonna pull that all the way to the left just so I can check out a couple things here So I want to go to the sales tab and just see where our products and services So if I go into a product and service here, which if you were in the other the business view would be under The get paid and paid area and then under the get paid. It would be under products and services So there it is under the business view if we looked at some of these inventory items Notice we've got the cost and the sales price. So those are different. We're buying them now We're gonna be buying them at the cost and then when we sell them with an invoice will be that that should populate With the sales price not the cost But oftentimes when we use this billable form in the online version It's not able to to pull over the fact that the item it's not pulling over the item It's pulling over the billable kind of component to it the cost kind of component to it So that that's a little bit little bit wonky there or a little bit different than you might see on the desktop version If you're used to that so just be aware The other thing I want to point out is if I go to these options to turn that billable item on we went into the cog up top And we went into the account and settings Then we went into the expenses and then we went into the bills and expenses and right here You see it says make expenses and items billable and then down here It says track billable expenses and items as income that means when I pull it over It's gonna put it into hopefully an income account instead instead of like reimbursing like an expense type of account But it still may not pull over the actual sales price But rather the cost even though it's gonna put it into an income account What we would like it to do is be driven by the item To determine where it's gonna go in terms of the account that will be impacted But that's the feature that kind of tells you that that billable thing is there. Okay? Let's close out this whole tab now I'm gonna close out this whole tab and then go back to our check form so the check form looks good What's this gonna do? Well, it's a check form it's gonna decrease the checking account and the other side is gonna be going to driven by these items the inventory account putting them on the books and Then it's also gonna have a sub ledger Effect in that it's gonna also be tracking the units of inventory because we have a perpetual inventory system set up So let's check that out So at the bottom we have the option cancel clear we can print the check we can order checks We can make this reoccurring and we can void and so on so I'm gonna go ahead and say okay Let's save and close it down below and then just to let you know what happens on the invoice We're not gonna actually populate the the invoice yet or record it But let's hit the plus button and just imagine that we turned around and sold this to that customer, which was Eric Music, so if I go to Eric music tab, we've got this item to pull in But notice that if I pull this item in if I add this item in it puts it on there at $400 which I believe is the cost because if I was to type this in ELP It should pull in the sales price, which is $500 per per unit. That's the problem So we could kind of use this to show when I put in Eric music that the billable items gonna pull over But it's not like a perfect link right there because again, it's not really using the item to record it It's kind of using that billable feature and so that kind of that'll mess things up a bit So be quite careful of that. We'll talk more about some of the issues with that billable item Later and we'll record this in the future and just show how that will work So do you want to leave without saving? I'm gonna say yes. I'm not gonna save this yet. We'll do that in the future let's go to the balance sheet now and Run the report. I'm gonna hold control scroll up a bit We should see then the checking account is gonna go down So if I go into the checking account, we could check out the checking. There's the check form Number other side go into the split account because there's multiple line items That's why it goes to the split even though all of the other one went to the income or the Inventory account there it is closing that back out and then I'm gonna go back to the form the other side's also on the balance sheet under Inventory, so if we go into inventory Then we should see that that check there it is there it is looks good movie B to the end and So notice it put it in here These are all the same check and it put it in here in multiple line items matching the line items that are in the on the The form for the check. Let's also go to the tab to the right right click on it and duplicate the tab So I can look at the inventory report Just make sure that that ties out because we're using a perpetual inventory system So that's gonna be on the reports on the left hand side and I'm gonna close the bookie and I could just type in here Inventory let's look at the inventory Valuation summary and range to the change from 0 1 0 1 2 3. Let's just do as of 12 31 2 3 I'll just say the end of the year Even though we're at the beginning of the year, but this is the year to date So we're at the 39 9 76. Here's our units of inventory thus far that should tie out that 39 976 to what's on the balance sheet and it does so that's good news