 QuickBooks Desktop 2023. Sales Received. Payment Received at Point of Sale. Let's do it within 2-its. 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, maximizing the home page in the view drop-down noting we got the hide icon bar, open windows list checked off, open windows open on the left hand side. Going to the reports drop-down company and financial, opening up the profit and loss ranging to the change in 010123 to 123123, January to December 2023, customize in the report, fonts and numbers, change in the font. Let's bring it up to 14 this time. We're going to we're going to level it up a notch and say, okay, is that okay? Yes, it looks good. It looks good. Reports drop-down. Let's do it again. Going to the company and financial this time, the balance sheet report. And then let's go to the customizing, then range and change in 010123, 123123, January to December, fonts and numbers, change in the size. Let's bring it up to 12 or 14, 14. That's it. Okay, so there it is. Prior presentations, we set up the new company file. We went through transactions typical for financing the company, such as putting money in from our own account, possibly taking a loan out to finance the purchase of the things we need to generate revenue, such as property planting equipment and in our case inventory. And then we finally got around to making some sales. So in the prior presentation, we're going to go to the homepage. We made some sales with an invoice. An invoice is an accrual process where we make the sale or do the work before we get paid. Then we went through the received payment, meaning then we got paid by a check or cash or some point in the future. And then we had three received payments that we're going to then put into the bank at some point as a deposit. Before we do so, however, we now want to go from an accrual standpoint and accrual flow within the customer or revenue or sale cycle to that of a cash flow basis, in which case we would use a sales receipt. Now note, you might be in some situations where you're going to go right to the deposit form in order to record a sale. That would be in a very kind of simplified accounting system. And the simplified accounting system would only work if you're in certain types of industry. So for example, if you have the gig work kind of situation, you're getting paid by a platform, YouTube's paying you or something like that. Well, then you can wait till it clears the bank and then you can use bank feeds possibly or simply a deposit form to record the increase to the bank account and record the other side to sales or revenue income at that point in time. However, you do lose some of the sub ledger capabilities to run sub ledger reports by by customer and sub ledger reports by item. But that may well be worth it in those specific situations. However, if you have more complex situations such as you're making sales at a cash register, like a restaurant or a food truck or a store of some kind, or if you have a job cost kind of system, which is like a bookkeeping company landscaping or whatever you have to do the work beforehand, build the client and then collect at some point in the future, then you'll have to go to the invoice. So the most complex kind of system is typically going to be an accrual system because then you have to deal with the receivable. That's the one we looked at last time with an invoice, receive payment, then a deposit, then we've have a cash based system, one which QuickBooks is still designed to do a full service accounting system, even though on a cashed basis, possibly with a register in the store, like in our department store for our guitars, then we were going to be using the sales receipt type of form. And then the easiest method would be a step further in ease from a cash based system to one which you're just waiting till things clear the bank and recording the transactions there possibly with the use of bank feeds. That's not exactly what QuickBooks is designed to do, but you can work that way and it would be easier if you're in a specific type of industry to be able to do so. So now we're going to imagine that we're like in our store and we're making sales in our store for guitars. Someone's going to bring the guitar up to the register and because we have everything set up properly, including our items and our sales tax and everything, it's going to be really easy for anybody that we're going to hire to kind of calculate the sale, determine how much we need to be collecting on it. So let's go into that. We're going to say create a sales receipt. And let's say this is coming from string music. This is a new customer. So I could get there by going to new customer this way. I often just type it in here string music. I'm going to say string music is our new customer and then tab. It's going to ask if we want to add it. Oftentimes we might want to go to a more complex set up if we plan on giving them our newsletter or shipping the guitars to them or something like that. We possibly want their phone number for future reference and whatnot. But I'm going to do just a quick add right now so that we have the minimum information, which is just the name, which in some cases, if you're in like a restaurant or something, your customers probably don't want to, if you're doing a food truck, the customers don't want you to collect their whole life history, you know, as you're trying to buy a taco or something or a sandwich, right? So in any case, it's going to go into undeposited funds. That's the default. Note the same setting that we looked at last time with the invoice with the payment receipt is here. So in other words, if I go to the edit preferences and we go to the payments and I go to the company preferences, that is checked off by default. And if it is, you won't see this option here and you also won't receive it in the receive payment area. The reason it's under the payment area and not the sales receipt area is because that kind of covers both bases because at this point in time you're still receiving the payment at the same point in time that you're making the sale. So I'm going to close that back out. We have the same kind of options. We might then choose depositing directly into the checking account from here instead of going to the clearing account of undeposited funds. But if you're collecting at a register, it's more likely that you're going to want to use the undeposited funds even then if you're using the full accrual system because it's likely you're going to get paid in cash or credit card payments of some kind here and both of those are most likely not going to be going into your bank account on a one by one sales basis but rather be grouped together. The cash then being grouped together with all the cash we collect in the day that we will then deposit in the bank in one lump sum. The credit cards being grouped together by the credit card company that then is going to deposit them into our bank in some kind of grouping method which we have to determine. We want to figure out so that we can make our deposits to match what's going to be on those payments because that's going to make our reconciliation process as easy as possible. So we're going to keep it going into undeposited funds here which is the default and then we're going to say I'm just going to keep it on cash. We have the same kind of payment options. These differences cash versus check versus credit card doesn't have a material impact or any impact on the actual transaction that's going to impact our financial statements meaning the impact on the financial statements balance sheet and income statement but give us a good reference tool to help us to sort the transactions by different methods. So I'm going to keep it on cash here for our purposes. We're going to then say this happened on the 19th let's say 1923 sales number sold to we don't need any address or anything because we're selling it in the shop although we might want to collect it if we could and then we've got our item so we're going to say we sold an ELP ELP tab because the item is set up it's easy to populate if they bring that guitar up to the cash register I should be able to identify it even if I don't understand items and how they're set up or how this is going to impact the financial statement I should still be able to do my job of collecting the money recording the transaction. I'm going to say we got three of these so 500 times three is 1500 and then we're also going to sell a G a GSB which is a Gibson SG we're saying one of those at 777 so there is that. So there's the transaction tax is applying the tax is applying automatically because we turned on the sales tax in the same way as with the invoice and we set up we set up the grouping that needs to apply here the items are taxable items therefore the tax is being applied thusly. Alright so what's going to be the transaction when we record this what's going to happen well it's a sales receipt that means instead of accounts receivable going up it's going to go to some kind of cash account in this case undeposted funds which is not a checking account it's in other current assets but it still represents an increase in cash in essence we could put it to the checking account but we're going to undeposted funds that's going to be for the full amount 2003-90-85 the other side is going to look a lot like the invoice it's going to be going to revenue driven by the account specified by the item to the revenue accounts but not including the sales tax then the sales tax is not going to hit the income statement because the tax theory theoretically is imposed on the customer we're just the collection agent so it shouldn't be recorded as income we also shouldn't have a sales tax expense we're just going to record it on the balance sheet it's a non-income item increase in the liability of the 113-85 we're also going to have a decrease to inventory for amounts not shown on the sales receipt because we don't want to show this to the customer if we're going to give them the actual sales receipt as in essence a receipt but the system knows what the cost is because we put that in place when we made the items in the item list then the other side is going to go to cost to get sold which is in essence an expense account which will be recording the expense of the use of the inventory that we needed in order to generate the revenue and we're also going to have the sub ledger of inventory impacted counting the quantity of inventory that's still going to be on hand okay let's save it close it check it out save it close it check it out go to the balance sheet we've got the undeposited funds so here's undeposited funds we've got a lot of cash we're holding on to so we better go to the store before we're robbed there's the 2003 90 if i double click on that there's the 2003 90 85 full amount including sales tax closing this out closing the other side the other side is on the profit and loss going into the sales double clicking on sales there it's in there same sales receipt two line items because we sold two different types of items but that's going to be for the amount not including the tax so you can see those items don't include the tax closing this out the tax then is going to be on the balance sheet under the sales tax payable double clicking on that it's in here with these two line items once again because now we're paying the state and the the city even though it was taxed at the same five percent four percent for one one percent for the other is the way we broke it out which we made up for the practice problem and then inventory so inventory up top double clicking on the inventory we could see it's going down with the sales receipts and if i double click on the inventory so there is it if i look at the inventory account notice it went up with a check it often goes up with a bill as well if we purchase in that format and then it goes down when we sell stuff the sell stuff forms are invoices and sales receipts so i'm going to close this back out and then the other side is on the profit and loss so a lot going on with the sales receipt if inventory is involved as well as as well as sales tax cost of goods sold there's the cost to get sold note that these amounts here are not actually on the sales receipt because hold on a sec these amounts right here 1200 for example not on the sales receipt because we don't want to report it on the sales receipt in case we give that to the client as a receipt but the system knows about it because of the way we set the items up closing this back out and closing this back out back to the balance sheet the other thing to look at is the the inventory here sub ledger reports drop down we're going to go to the inventory inventory valuation summary let's go up and customize it and change the dates from 010123 to 123123 fonts and numbers let's bring that up to 12 and see if that'll work or if that's too many too much for this report in terms of the columns it's still good it's still good i can see i can just widen these out a bit and so there now we're adding up to the 38878 here are the inventory items that remain that should match what's on our balance sheet which it does so that looks good also if i go to the home page this deposit form represents four items now that are have gone through undeposited funds three of them with the received payment one of them with the sales receipt we're representing all of them in cash so we can show the concept of us putting them together possibly which we won't do yet but in theory if i went to the bank with one lump sum deposit of 22,890 dollars and 85 cents that's how i want it to show in the cash account on our side so the bank reconciliation will be as easy as possible but i'm not going to do that now closing it out closing it out ultra vase one more time we go here let's do another one we're going to make another sales receipt we're imagining someone's in our store they come up to the cash register with all these guitars and we're like okay that's a sales receipt not an invoice because they're going to pay me here and now sales receipt this is going to be for a new customer i'm going to type in sam the guitar man the guitar man and notice you might be in an industry where they were like you're at a food truck and they don't they don't want to give you your name all the time so you might have like a generic name which would be your this is your customers and you might record all the sales under that one customer if you're not collecting this kind of data from your individual customers in terms of you know who they are in order to record sales still possibly any case we're going to say sam the guitar man and i'm just going to do a quick ad if i wanted to collect more data like their address their shipping address their their phone number then i would have to do a more indent setup here but i'm just going to do a quick ad for now it's going to go into undeposited funds i'm going to say it's cash just for the convenience of us being able to think about grouping cash in the same format as it would be deposited which we have a problem with because if it was a check then it's going to hit the bank in that same format as one check in which case we might want to use the checking or we could at least do that and we wouldn't have a grouping problem between our books and the bank account but even then it's useful to have just one method going into undeposited funds and that means that all deposits or all increases in the checking account will be deposit forms or possibly transfer forms but we won't have these other forms like a sales receipt or payment form as an increase which can be a little bit easier when you're drilling down that way as well but in the case tab and through we're going to say that this they brought up to the register a a service item so now we've got some service items we're going to do so we're going to say that they came into the shop and they ask for a diagnostic now what is a diagnostic on a guitar that sounds like a car kind of term i think yeah kind of was i think at the start so we kind of just made some service items because i want to show the difference between the service items and the difference between the recording of a service item versus the inventory items so bear with me on the types of service items we set up hourly service item one pretty generic you probably want to have a better service item name than hourly service item one but that's what we have we did hourly service on someone's guitar we like sanded it or something i don't know and so then the next one's going to be tuning we got tuning support which is quite expensive i'll tune your guitar for way less than that but then there's 12 okay so that's our services the thing we want to point out what the service is here is that one you would like to set up your service items in such a way that the billing process is easy as possible for example if you're a bookkeeper you might not want to do just an hourly service item but rather see if you can group your your your your billing on some other thing like how many transactions you put in place that can be a little bit more concrete it's actually a little bit easier to do the billing in some way because then you're not always worried about how on point you were in terms of how much hours or time you put in place that varies from one job to another right so in any case we have that also note that it's not taxable the in the system knows it's not taxable because we set up these service items as non-taxable items so the item is the thing that's telling QuickBooks whether it's subject to tax in this case we're talking sales tax so you can see no sales taxes being applied down here what's going to be the transaction when we would record this it's a sale so it's still going to be increasing some kind of cash account in this case undeposited funds the other side is going to go to a sales account but or an income account but probably not the same one probably not sales it might go to like service income it'll be driven and knows where to go by the items that we set up and then we don't have to deal with sales tax we don't have to deal with inventory on the balance sheet we don't have to deal with the sub ledger of inventory and we don't have to deal with the cost of goods sold so much more simplified transaction when we don't have inventory when we don't have sales tax let's check it out let's save it and close it and i'm just going to say tuning i misspelled to whatever uh okay so now we got another item in the deposit apologize for the spelling and we're going to go to the balance sheet and so now we've got here in undeposited funds it has increased we got 28 thousand 70 dollars and 85 cents that we're holding on to for some reason because we're crazy but we gotta we gotta make a deposit man this is not safe i don't feel secure i'm gonna close this back out and so close this back out so there we have that the other side is going to the profit and loss so now it went into income but the item told us to put it into service income this is the major kind of categorization separations that we typically want to see on the income statement like the broad categories meaning sales represents inventory we're selling service items represents service items that we're doing notice what we did not do is make another income account for every kind of guitar we sold or another service account for every kind of service we performed because if you have a full service accounting system you can run other reports to give you that detail so for example if i go to the reports up top and i can see the sales sales by i can see sales by customer for example from 010123 to 123123 which gives us that added detail the 15,257 uh going over here to the 15,257 i can run a report reports drop down sales sales by uh sales by item summary making it from 010123 to 123123 and that's going to give us our sales by service items inventory items totaling up at the 15,287 profit loss uh 15,287 now if you start posting stuff to sales for something other than using the invoices and the sales receipts your sub ledgers can can get out of whack like if you record deposits directly to a sales account revenue account income account then those sub reports don't work as well so if you're using gig work that's what you that's some of the detail you lose that's those sub accounts so those are the pros and cons there but if i go into the sales account here we see the sales receipts so notice they broke out all three items even though it's the same sales receipt because we had three separate items within the sales receipt closing that out and then of course we have we don't have to deal with the sales tax we don't have to deal with the inventory we don't have to deal with cost to good soul so now we still got this huge amount in undeposited funds which is represented over here in the home page in future presentations we will make a deposit we don't want to do it yet i want to i want that five look at it's red i have to do something about it it's red but in the future we'll click them off here and group them in the same format as we will be seeing on the bank statement making the reconciliation easy not yet though not yet wait wait for for more gratification in the future we're going to go down and let's open up the trial balance and just check our numbers now we're going to say this is from 010123 to 123123 let's customize this thing fonts and numbers change the font let's bring it on up to 16 16 yes please okay and just see if your numbers tie out here great if something is off you might want to change your date range and and and that's often an error that is there if you see some date that's wrong or some amount that is off you can double click on the account go down to the source document you can change the source document something you want to be very careful of in practice but quickbooks does allow you to make those kind of changes and they're great to do in a practice problem like this