 in the cog dropdown, looking at our settings. I'm gonna keep on going through the settings for this foundational items when we set up the new company file. Last time we got down to the sales area, this time we're going to the expenses and we're gonna go all the way through to the advanced. So expenses, this is gonna be kind of like the cash outflow side of things. So these are gonna be the check forms, the expense forms, the bill forms. At the end of the cycle, we would expect money to be going out for these items. So you got bills and expenses. So show items table on expenses and purchase forms. So that's going to then adds a purchase product table on the expense and purchase forms. So you can itemize products and services. That's on by default. We will keep that on as the default. It says show tags, field and expense and purchase forms. So lets you add tags. We're not gonna be dealing a lot with tags because that's gonna be another kind of specialty area. We might have another section on tags in and of themselves. If you're not using them, you could turn that off because it'll be a little less busy. I think QuickBooks is trying to kind of promote the use of tags because that's a differentiating thing that they have than many other softwares. But again, it's kind of a specialty area so we won't be using it for the most part in this practice problem. Track expense and items by customer adds a customer column on expense and purchase forms so you can track expenses and items by customer. So let's check that one out in a bit more detail if I close this back out. And I was to open say an expense form, a check or a bill type of form. Let's open like an expense form, for example. You can see here it doesn't have any customer field on the right hand side by default. The vendor is who we're paying up top. Now I could add a customer field so that I can then add the items that I'm paying for possibly to an invoice in the future. You gotta be careful with this. We'll talk about it more in the future. But to do that, I can close this out and we'll turn this one on cog dropdown, account and settings. And I'm gonna turn that on expenses. And then we're gonna go into here and it says track expense and item by customer. I'm gonna turn that on make expense and items billable. So this one it says adds billable column on expense and purchase forms. So you can add billable expenses and items on sales forms. So let me turn that on and I'll show you what I mean by that. And then you've got your added options make expense items billable. But before I get into that, let's just look at this first. Let's save this and look at the impact. I'm gonna close this back out again. And then I'm gonna hit the plus button and go into that same expense form. This is a form we typically use kind of like a check form and we would have a vendor up top for something that we're paying for. You can see now we have added a billable item and a customer. So why would you need a customer if you're dealing with an expense form? Well, possibly I'm in a system where possibly it's a job cost system and I'm paying for expenses that I'm gonna apply directly to an invoice. So I wanna have an expense that's gonna be recorded here that next time when I make an invoice for the customer that I apply this expense to, it will then pull in as a line item to that customer. Now you gotta be careful with that because the question then is when I pull it over to the invoice, we're not using items to do that. So when I pull it over to the invoice, I don't really have a formal item. So the question is how is QuickBooks gonna record it? Is it gonna record it as income or a reduction to the expense accounts? So you gotta kind of be careful when using that tool, although it can be an effective tool, we'll dive into it a little bit more in a future presentation. We will keep that on for now and touch on that in our practice problem. So I'm gonna hit the cog again and then go to the account and settings. And now that we have some understanding of that, let's go back into the expenses, then you have the added options here. So you can make expense and items billable, you can mark up with a default rate. So now that we've determined that we're gonna have some expenses that we might apply to a customer so that we can pull them over into an invoice, do I want to pull them over at what we paid for it or maybe I have a standard markup? I mark it up by some percent when I invoice the client. So I have a standard markup for those things that I've been purchasing. So, and the other way you can do it is have the cost there and then just add your markup to the total of the invoice which might be another way that you could do that. Track billable expense items as income. So when they pull over to the income side, when you invoice them, typically you would want them to show up on an income line, you're not typically gonna want them to be like a decrease in an expense. So if you paid for like supplies expense and then you added supplies expense to the invoice, I don't want the invoice to then record a decrease to supplies expense. I want it to record income typically. So you have income minus the expense as your net income. That's usually how you'd want to see it. So that gets a little tricky because you're not using items. So we have here track, so in a single account or in multiple accounts down here adds a use for billable expense checkbox to an accounts edit screen in the chart of accounts. So you can kind of apply where you want it to go more clearly here. So we'll keep the defaults and then you've got the charging of the sales tax. And so sales tax obviously is gonna muddy up the situation when you have to determine whether or not when you pull it into the invoice is it now gonna be applicable to sales tax or not? So you can turn that on if so.