 Here we are in our QuickBooks online test company file we started up in a prior presentation remembering we're in the accountant view as opposed to the business view you can toggle between the two views by going to the cog up top and switching the view down below. We're going to duplicate some tabs to put reports in by right-clicking the tab up top to duplicate right-clicking the tab up top again to duplicate again back to the tab to the reports on the left hand side we want to open up the balance sheet as that's thinking tab to the right reports on the left this time the profit and loss closing the hand boogie changing the range we want to go from 010125 to 06325 I want to see it on a month by month side by side for the month by month and run it that's what we have thus far tapping to the left we're going to close the hand boogie changing the range in 010125 to 06325 and let's see this by a classes breaking out a lot of we want a classy report a lot of class happening here okay then we're going to go to the first tab we're going to then go down to the projects on the left hand side and let's go into the projects so we're within the projects so let's recap what we've done thus far in our excel worksheet because it's a little bit easier to tell the story so we started with an estimate we gave out the estimate total of the estimate was a 100,000 when the job was accepted we wanted a $10,000 down payment so we didn't record revenue but build the client for the 10,000 and then we recorded expenses for the month of operation that actually started on month two and these were actual expenses that we recorded we recorded expenses for month number three and we recorded the related revenue not not in alignment with our billing structure but rather in alignment with the percentage completion concept that we did with this calculation here and then on month number three we did the same thing we we basically calculated our actual expenses and then we had this percentage of completion and now we want to be calculating or recording the revenue so let's just recap by the way I did not record this last bit in our excel worksheet although we did do it in QuickBooks so we'll record that here now when we did the work here and we'll record that on I'm going to say 331 and it's going to be cost a good sold for all the stuff that we did material labor overhead I'm going to put in a cost a good sold for the 19 total 19 527 the other side let's add some more blue space I'm going to need some more blue spaces and let's say let's just add one more for now to and then we'll add some more after after after okay and then the other side's going to cost a good sold we just paid cash cash went out the door for to get it done all right and then if I record that over here I'm just going to say cost a good sold is right here I'm going to say f2 plus f2 f2 and that's going to be 19 527 and then the checking f2 plus f2 and there we go and so now we're back in balance and notice here when I do this in like a little worksheet format we we can only see this we know we can't break it out by month so that's why in in quick books it's nice that we have this revenue that can be broken out over here uh on a month by month so we kind of add a dimension in like the database program the total still coming out to the 16 15 621 for that time frame that we could see in our little worksheet 15 but it gives us some more dimensions in quick books although it adds complexity to do so because we have to deal with these forms and whatnot in order to calculate these journal entries all right so now we're going to recognize the revenue so I recorded this on our side if I go to this first tab and we look at these the costs for example as we can go into the costs of good sold and we had these expenses that we entered and when I entered this expense item I made it billable now when I say billable and I did a 30 markup we're not going to actually give the bill to the client because we're billing the client based on our billing structure here that we came up with that we came up with in accordance with our estimate so but we are going to make it billable so that we can then record the revenue with an invoice because the invoice is typically the form used to record revenue so now we're going to pull this into an invoice not so we can give it to the client but so we can record the revenue in our quick book system so let's go back to our projects project number two close the hand buggy and then I'm going to say we're just going to make an invoice and the invoice is not going to come from the estimate because that's what I'm using when I actually want to give the invoice to the client but rather I'm going to pull in these billable items which is going to help me to calculate the actual revenue on a percentage of completion kind of concept so if I go through this thing here and say okay that's good and this is going to happen on we'll say 331 okay and so now it pulled in the materials labor and overhead and put it into and then it did the markup over here and so that looks good now the invoice is typically going to be increasing the accounts receivable and the other side is going to be assigned by these line items revenue for our purposes what do we want to have happen we want the revenue to be going up but we want the other side to go to work in process so if I see that on this side on on our excel sheet we're going to let's do this on our excel sheet so I had my 19 527 the percent completion is that divided by my total estimated cost not including the markup that I'm going to say here and then we're going to say if I multiply that percent times the total revenue then the revenue that I should be recognizing related to that cost should be 25 385 so if I was to do a journal entry down here let's add a little bit more blue so I can do it and then I'll we'll make another area to enter because I'm getting too far down but one more one more transactions down here just one more 331 we're going to say I'm going to put the revenue on top even though it's a credit because that's the first thing I think about right so I'm going to say the revenue is a credit of that 19 of not 19 of the 25 385 and then the other side I don't want it going to to accounts receivable but rather work in process which is easy to do from a journal entry standpoint but we have to do a little bit more funagling a little bit more funessing on the quick book side if I want to use an invoice instead of a journal entry which I do and so that's what we will do so well let's go back up top and record this I'm going to go into the revenue say f2 plus f2 and go down 25 385 and the other side was going to work in process the whip account f2 plus f2 and work in process boom so that puts us back in balance here that's what we do want to do but if I record this in quick books again you could do it with a journal entry to just record a journal entry but I'd like to have my revenue typically recorded within voices because that's the form so sometimes when I look at my reports and track the revenue recording the journal entries are useful for that and it's also easier sometimes to assign it to the classes and the projects and and be able to sort the information also by project and customer so we have our our invoice laid out here but I needed to make it go to work in process so all I'm going to do is tweak this bottom bit the bottom bit needs to be a tweaked and then we're going to say this is going to be negative 25 385.1 and this is going to go to class two