 QuickBooks Desktop 2023, new vendors set up and accounts payable beginning balances set up. Let's do it within two-inch QuickBooks Desktop 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. Here we are in QuickBooks Desktop, get great guitars practice file we started up in a prior presentation going through the setup process we do every time we open it Maximize in the home page to the gray area in the view drop down we've got the hide icon bar and open windows lists checked off open windows open on the left hand side opening up the major financial statement reports with the reports drop down company and financial P and L profit and loss. The range change for this is the prior year that we're entering the data in as of and then we start the new company file and new data in it in 2023 January of 2023 so I'm going to make this from 010122 to 123122 and then I'm going to customize it so we can increase the size of it. You might not need to do this fonts and numbers change font but I think it'll be easier to see for the presentations bringing it up to 12 yes and OK. Let's open up the balance sheet now the big balance sheet reports drop down company and financial the big balance sheets right there and then I'm going to customize it and we'll change the range from January to 123122 and then I'll go to the fonts and numbers and change the size there while we're here to 12 okay is that all right yes it is okay so there we have it. So now we're going to be looking at the vendors so there's two things with the vendors we added our customers you'll recall in a prior presentation and when we added the customers there's two things that we needed to think about one was to add the customer so that we can enter the data in the invoices and the sales receipts and two we wanted to add the opening balance represented by the customers owning us that money similar for the vent for the payables now on the payables side of things we have the vendors and we need to set up the vendors so it will be as easy as possible for entering the bills and the checks and so on so similar to what we saw with the customers if you had a prior accounting software system or prior system before going to QuickBooks when you start QuickBooks you could try to upload all the data into QuickBooks or you could try to download all the vendors that you had from the prior system and upload those into QuickBooks here as well however you also might want to think about kind of trimming down your vendors list because oftentimes you can get a little out of hand with all the all the different vendors because you're you're paying for everything that you need within the business and you're selling the thing that you're specializing in that means you're going to have a lot of different types of of vendors and usually you can kind of add the vendors as you start paying bills so as you you're paying for the things that you need you're going to be paying the vendors so when you write checks for example you can open up a check and you can add the vendor name as you go when you're writing a check and if if you're just writing like a utility bill or something like that it's pretty straightforward to add the vendors because you don't need much more detail than simply the names for the vendors if you're using bank feeds for example and entering data if they're electronic payments you might have that vendor data in the bank feeds and you can use that data to basically help you out to memorize the transactions so so you want to keep that process in mind it could be pretty easy to add the vendors as you go and then in the following month after the first month it'll be a lot easier to just to enter the data because you've had entered the vendor in the prior month however if you have any information from the prior year about vendors that you really want more detail about these often being vendors that you have like an inventory purchasing relationship with because then you might want to save the terms and give the contact information the shipping information and all that kind of stuff then you might want to as you start the new QuickBooks file add those vendors in we have the same process that we saw with the customers you might export the vendors for example to an Excel worksheet and then try to copy and paste them in bulk into our system in QuickBooks and if we don't have that many vendors that we need to add then we can put them in manually which we will do this time we'll have the one vendor that we will add manually also note that you might have an accounts payable remember our example problem here we're imagining that there was a prior accounting system I'm not going to add all the data into QuickBooks I'm just going to take the ending balances as of the end of the last period December 31st 2022 and put them in place as of that date so that the starting point to enter new data January 2023 we're good to go so I'm going to add this 15,000 here for accounts payable but I can't just add the dollar amount I have to add who I owe the money to so that I can then pay the appropriate person in the future and everything can kind of roll forward as normal so I'm going to add the vendor which will have that vendor available so it'll be available for me when I make a new bill or a check for the vendor and I'm going to put the fact that they currently owe me money so that the accounts payable will increase as I do that QuickBooks will probably create a bill type form because the bill type form is the form that increases the accounts payable account the other side will probably go to an expense account so and and that'll roll into equity in a similar way as we saw with the accounts receivable QuickBooks created an invoice so let's check it out we'll go over here we're going to say vendors let's go into the vendor center we have a couple vendors because we set up our sales tax stuff and now we're just going to add another vendor now we only we're only going to add one vendor that has that 15,000 that's going to be Epiphone so I don't need to go through the whole the whole process of bulk adding the vendor so if I hit the drop down I could say new vendor or I can add multiple vendors in a similar way as we did with the customers if I look at the multiple vendors just to check it out so so here it is it's a similar process that we saw with the customers and if you if you line them up and customize the headers up top to line up to an Excel worksheet for example where you have your vendor information stored you can copy and paste the information in that way which could save some time as you're doing your set of process because we only have one and because we want to practice doing the data input in the normal kind of system let's close that out and then go to the vendors and say we're just going to add one vendor now I'm just going to add the minimal information for this particular vendor which will just be the name the name and if it was just like a utility company or something like that that's all you would need but some vendors you might want more information for them again if you have a more of a long-term relationship the opening balance this is going to be the balance that I'm going to put in place they currently owe us the 15,000 and I'm going to put that in as of 1231 222 the end of the prior period in our practice problem the current period that we're going to start entering data into will be January of 2023 and then I'm not going to add data to all these but just let's look at the other fields that you could add data to the ones we added to our own or the required fields so we got the beginning well beginning balance wouldn't be required unless you had a beginning balance so we got the name the job title the phone number of course contact information and then the build from information and the shipped from information you got the payment settings the account credit limit payment terms something like net 30 and so on you might get a discount these would be a cash related discount so that you know when you enter a bill then when is it going to be due by so it can set the due date automatically for you billing rate levels so you could set up different billing rate levels if you want more information is kind of a specialty area you can take a look at the questions and answers here and then print name on the check tax settings vendor tax ID are they subject to a 1099 so this is going to be a tax filing requirement so notice in the United States we have a an income tax system so the IRS is going to try to to overlook or look over people's shoulder to see when they're earning money so that they can try to collect the taxes on it and they actually have the leverage for people to kind of rat out the people that are earning the money on the payer side because every transaction that we have you've got someone paying on side of the table someone on the other side of the table where it is income these are vendors so we are the one that is paying whenever we're the payer the IRS wants to try to pressure us to give them information on who we're paying so that they can collect the income from the person that's getting the money as income so if they're employees we can see that most clearly we have to actually take the money from the employees directly before we give it to them and give it to the IRS in the form of withholdings but if they're not employees then we might still have a 1099 requirement that we have to give them and so you got to go through the ideas are they subject to 1099s normally if they're incorporated they will not be subject to 1099s because the IRS I believe the thought process would be they're large enough that the IRS already has other ways to to get them in compliance because they're they're they're above the radar but if they're sole proprietors they might be flying under the radar and the IRS doesn't feel like they have any other way to kind of kind of you know check on these people and therefore you have to file the 1099 so they're usually going to be sole proprietors down here so you so you want to be thinking I'm paying someone are they incorporated if they're not incorporated are they a sole proprietor are they subject to a 1099 there's also a dollar threshold but it's so low that anyone that's subject to a 1099 you might want to get the detailed information just in the event that you pay them over the amount that would be subject which means you have to get their ID number which would be an employer identification number or like a social security number and this will help you to file that okay account settings tell us which expense account to prefer when you enter bills for this vendor spending a little time here it can save you money accounts you select here show up automatically in the accounts field so you could choose the expense account that would be related most times to this vendor which might make it a little bit easier for the data input and then you've got the additional field vendor type you can put added information for the vendor which could help you to sort the vendor information when you're doing different reports and so on okay so I'm going to say okay here and then we've got our vendor for the 15,000 has been set up if I go on over to the balance sheet I would expect then the 15,000 to have been put on the balance sheet by QuickBooks so QuickBooks then 15,000 there it is in accounts payable so how did it do that because I didn't enter a form remember the thing that usually drives a transaction is home page open windows entering a form or entering the form of a journal entry we didn't enter a journal entry or a form we just entered that beginning balance QuickBooks put this here where did they put the other side what form did QuickBooks probably default to probably a bill because it's accounts payable accounts payable goes up with a bill so if I double click on it so there it is we got a bill that they created I'm gonna double click on the bill there's the bill looks like a bill form down here they put the other side to uncategorized expense which makes sense because it's a bill and they put it to some expense account now you could change this you could say I don't want it going there I want it to go to like a revenue account opening balance equity so you could change it right there but the fact that they put it into an expense doesn't really bother us because we put this in as of the last day of the prior period and the income statement will roll into the balance sheet so it will be inequity either way so let's close it out and I'll show you what I mean if I close this out if I go down here in income we've got that five thousand five hundred that ties out to the income statement or profit and loss if I go to the profit and loss there's the five thousand five hundred which consists of the twenty thousand five hundred from the accounts receivable which QuickBooks created invoices for and then the fifteen thousand for the uncategorized expenses now the fact that they have an income of uncategorized uncategorized income and expenses makes no sense but that happened in the prior period and I'm not gonna look for activity in the prior period in this QuickBooks file because I'm gonna look at my prior accounting system to look at anything happened before the cutoff of January 1st 2023 so I'm not worried about this the only thing I'm worried about is is it messing anything up in the current income statement for the current year as of 010123 to 123123 answers no because because the income statement is a temporary account it rolls into the balance sheet on the balance sheet side you could see income down here that income will roll into whatever the the roll-in equity account will be which is I think owner's equity or retained earnings so if I for example go up one date here to the 23rd income is now in owner's equity so notice then we're str the strategy is working in other words meaning we were entering the beginning balance we did it for inventory we entered the beginning balance for the accounts payable and for the accounts receivable the other side washed out to equity in one way or the other either going to beginning balance equity or going to the income statement which rolled into the equity account in owner's equity in our case once it's an equity at the end of this whole process then all we have to do is sort out equity with another journal entry and with a with a sole proprietor that would be easy I'm just going to remove the opening balance equity and put everything into one account owner's equity if it was a partnership we would then have to take the added work of breaking out the equity accounts into the various partner accounts in accordance with their current balances at that point in time if it's a corporation pretty much we have like one account called retained earnings because the corporation breakout between the owners is done so with the holding of the shares and we might have a common stock kind of issuance as well that we have to deal with all right the other thing that should have happened is we should have a sub ledger that's given the accounts payable by vendor let's check that out reports drop down accounts payable and we've got the AP summary let's do the detail and well let's not do that hold on hold on let's do another report you got the AP balance vendor balance summary let's do that there's the 15,000 we only have one vendor that we owe at that this time the 15,000 that ties out to the balance sheet so by entering the bill quick book quick quick books was able to to force us to tie out the balance sheet account to the sub account which is the other that other report we also then of course need to pay this bill in the future and the fact that quick books put it in place as a bill allows us to go to the home page and then pay the bill just like we normally would so when I pay that 15,000 I can just check it off and say I'm going to be paying it and then and then move forward even though that's not like the original bill because it was done in the prior accounting system and of course if I wanted to track the bill in the vendor center we can track the bill here in the vendor center and say okay if epiphone contacts us or something I could say I could say yeah okay I see I got a bill here the bill was for the prior you entered the bill as of the cutoff date so I might have to go to my prior system to see any more detail about the bill but at least I can say yeah okay I see I have an outstanding balance that I need to pay epiphone at this point in time so that's the the general idea we're going to continue on those are some of the more complex accounts by the way because accounts receivable inventory and accounts payable have those sub ledger accounts some of the other accounts will be a little bit easier because we don't have as much detail in terms of the sub accounts that need to be supporting the the line items so we'll continue adding these one at a time in future presentations