 QuickBooks Online 2023. New customer setup and accounts receivable beginning balances. Get ready to start moving on up with QuickBooks Online. Here we are in Aubrey. Get great guitar practice while we started up in a prior presentation using the 30-day free trial. We also have the free QuickBooks Online Test Drive sample company open. What the two open at the same time? We suggest using the incognito window or another browser. You can find the incognito window if using Google Chrome in the three dots up top. New incognito window. Then search for QuickBooks Online Test Drive. We will be using the sample company to compare and contrast the accountant view, the view that get great guitars is in, and the business view, the view that the sample company is in. 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. We're going to duplicate some tabs up top to put reports in that being the balance sheet in the income statement. I'm going to right click on the tab up top and duplicate it as that's thinking. I'm going to right click on the tab again and duplicate again. I'm going to go back to the tab to the middle as the tab to the right is thinking and we'll open up the reports on the left hand side. If you're in the business view, by the way, the reports will be located under the business overview and then the reports. So within the reports field, we're going to be opening up the balance sheet, the standard balance sheet report. As that's thinking, I'm going to go to the tab to the right and open up the reports again on the left. This time the profit and loss notice that these two are always in the favorites because they're the major financial statement reports. Closing up the hamburger otherwise known as the hamburger range change up top. I'm going to go from 010122 to 123122 and run it. Remember that the 123122 is our cutoff date so that we could start entering data as of January 1st, 2023. Tab to the middle, I'm going to do the same thing for our data here going from 010122 tab, 123122 tab and run it. That's going to be basically our start up process. Now what we're doing here, if I go back to the beginning balances, we are imagining that these are the beginning balances from the prior accounting software and now we're entering them into our new QuickBooks file so that we can then go forward from this point. We are now adding the data one account at a time so that we can also add any other data that would be related to the account balance that would be necessary. We did the inventory asset last time, also adding the inventory items. Now we're going to do the accounts receivable which has a added difficulty of needing a sub ledger breaking out the receivables by customer. So in other words, you might think if you have an accounting background, you could say, well, if I'm going to add accounts receivable, I'll just debit the accounts receivable and possibly credit the other side to say opening balance equity until I fix the opening balance equity as is our strategy. But I can't really do that because I got to think about the sub ledgers. Let's go back on over just to give you an example of what I am talking about. If I go back to the first tab, this is where I'm going to actually do the data input. And I was to say, why can't I just go to the new button here and enter a journal entry. And then within the journal entry, I'm just going to debit the accounts receivable. Now, even if you tried to do that, QuickBooks wouldn't allow you to because if you don't put a name, then QuickBooks will not record the transaction. So we're going to not use that strategy. You could add the names and that's one way that you could do it. But again, even if you did that, you don't want an increase in the sub ledger with a journal entry. You want to use the appropriate form because then you're going to be able to complete the task in this case, accepting the payments in the future. So we basically want to enter the transaction with an invoice kind of form. Typically, that's the form that increases the accounts receivable. But we're not going to actually enter an invoice because the invoice was entered in the prior accounting system. What we're going to do is we're going to set up our customers and tell QuickBooks that there is a beginning balance for these customers. QuickBooks will then make a generic invoice just to record the transaction, which will increase the accounts receivable. And the other side will go to uncategorized income, most likely uncategorized income will hit the income statement, but it'll be in the prior period. And therefore it'll roll into equity or the income statement here on the balance sheet or retained earnings after we go to the January 1st, 2023. So it will be in the equity section. Okay, so let's test it out. So this is what this is going to be our information for the customers. We're just going to say that we have these three customers. Now, if you had a prior accounting system, then you can export this information, whatever data file you have, you could typically export like your contact information. Now with the customers, it depends on the kind of company that you have in terms of how much detail you need for each of the customers. Do I need all the detail or do I just need basically the name of the customer in order to facilitate the transactions? That'll depend upon in part whether you have repeat business with a particular customer or most of your business is just a one off kind of transaction with the customers. Obviously the customers that owe us money, which is going to be these items over here need to be entered into the system because I need to enter the beginning balance in accounts receivable and be able to track the amounts that are owed. So here I'm just going to include those customers that owe us money. And then I'm going to add more customers as we do transactions, entering them with the sales forms, those being the invoices and the sales receipts typically. So in other words, going forward, when I add customers or when you start a new business, oftentimes you're just going to go to an invoice. And then as you populate the invoice, you're going to add the customer. Now, if you have sales transactions where the customer is kind of a, you never get the name, you're like a food truck and you don't ask them for the name or anything like that. Then you just might make a generic customer. This is your sales customer or AAA your generic customer that you're going to use to record the sales transactions. If you're in the type of business where you have repeat business with the customer, then the more information you can get about them, the better. So you can have them on your newsletter and your mailing list and all that kind of stuff. So I'm going to close this out. You can also add the customers by going to the sales tab on the left hand side, which I would think of as kind of like this customer center. And then you've got your customers on the left. If you were under the business view, it would be under the get paid and pay tab on the left. And then the customers field. So there's your same information. If I was to add the customers one by one, and if I only had three of them, I'm going to close up the hamburger up top. We could do that by just saying new customer. So I'll just check it out. I won't add them this way, but let's just tab through now. Look at all the data that we have. We've got the title, first name, last name, suffix company. This is the only required field customer display name because it has the asterix here and then email address, the phone number, mobile phone facts, blah, blah, and so on. A lot of detail on it. The address may or may not be applicable if we're going to send them a newsletter or something like that. Or if we're shipping things to them when we make a sale shipping inventory, then of course we would need the address. And then you've got added notes, which could be useful if you're trying to, you know, get information on your customers so that when you communicate with them, you can do so efficiently and be able to know who they are and everything. And then you've got your payments primary payment method. So this will help you to populate the invoice if they always pay you a certain way. So usually that's often blank the terms. Now these are the terms for that particular customer. You might have general terms in general. This being if you invoice somebody, then they're going to pay you within 1530 or 60 days of the payment. So I'm going to leave. So then we have the sales forum delivery options. You got used the default print later, send later or none. So those are the defaults when you end the entering of an invoice or sales receipt and the language we have in English as the default for us. But you can make the change there as well for a particular customer, which is pretty neat as well. So additional information, you've got the customer type here. So if you added different, you could add, you know, different groupings of customers by customer type. If you so choose the tax information represents sales tax. Usually they're going to be subject to sales tax depending on what they bought. So sales tax as we talked about in a prior presentation, first just set up the sales tax. Then the primary things that determine whether or not sales tax will be applicable in the United States will be the things that you sell service items, inventory items, and then you can make any changes to the customer who might have different sales tax needs based on the customer. And then you've got your opening balance. This is the key to us entering these opening balances. If I enter an opening balance, QuickBooks is going to have to do something with the other side of the transaction. It's going to increase accounts receivable. It's going to increase the sub account for the customer. The other side is going to have to go somewhere for the double entry accounting system to work. I think it's going to create an invoice and put it to like uncategorized income, which isn't a problem because we're going to enter it as of the prior period, which means it'll roll into the balance sheet as of the current period, which is what we want. So we're going to try to enter it. Then I'm going to say, do you want to leave? I'm going to say yes by uploading. So we are going to import the customers like we did with the items. So first time importing all your customer information must be in one file. The top row of your file must contain a header line for each column of information. Customer name is the only required field so we can import a CVS or a CSV and an Excel file. I'm going to download their sample file and I'm going to try to line up my headers to what they have as we did with the items. Let's open up their file. And so I'm going to say enable editing and I'm just going to try to line up their headers and then just copy my information into the headers that they have. So I'm going to delete. I'm going to delete the stuff that they have included. I don't think I need the examples to help me. So I'm just going to delete that. Well, let's actually just delete a few of them. I'll delete like this many so I can see their examples and I'll delete those. Okay. So then we have the company name. So I'm just going to take my data. Let's see if I can do the side by side. I'm going to take my data and put it into their system. So I've got the name over here. Now there's a couple issues with the name. So obviously the company name might be different than like the contact name for example. And you might have systems where you export the data and you get like the name as first name last name in two different cells. Or it might have a first name last name in the same cell separated by a space or it might have the last name comma first name. And then you got to think, well, how does the data want it over here when you import it? And then if you have a problem. So if you have like your information formatted like this first name last name and you want to make it look like this with a first name and then the last name in another column. You can find a lot of nice tricks. I won't go into them now. But if you search in like a YouTube search for the capacity in Excel to separate a name by a space, you know, you can come up with tricks to do that. There's a couple of different ways you can do that fairly easily. And then you can look up, well, if I have something that's separated by a comma, you know, there's a trick that you can use to do that possibly. And then if you have things in two cells and you want to combine them into one cell. Again, you can kind of look up tricks to do that. So I won't go into that in detail here because that's Excel stuff, but you can find ways to do that. So then you can export your customers from your database program to Excel and then figure out the format you need to upload it into QuickBooks using Excel tricks to get it into that format. All right, company name. I'm just going to copy these and say that's the company name. Customer type. I'm not even going to include a customer type. We don't have it. So I'm just going to select this whole thing and right click and delete it. And then we've got the email address. So email addresses are quite useful these days because of course, a lot of times we send the invoice by email, but I don't have any emails. I'm going to close this out. I'm just going to right click and delete the email address. And then we've got the name. I'm going to make this a little bit smaller. I put the company name. This is the company name. I'm going to have that the same as the name over here. So the name, the company name, the phone. Let's make this a little smaller. Do I have a phone number over here somewhere? I do. Let's add the phone. So I'll copy this. Did I have an email address? I did have an email. Hold on a second. I'm going to undo, undo, undo, undo, undo, undo. Undo, undo to the email address. Okay, let's make this a little smaller. So let's do this again. So I got the name, copy, paste. And then I got the company name and then the email addresses I do have over here. So I'm going to copy the email addresses. Put that into their format. The phone number. Do I have a phone number? I do. I'm just going to call it the main line. Copy that main line. So they got the main and then the mobile and then the facts. So I just have one main line phone number. So I'll keep it at that. I've got no mobile, no facts, no website. So I'll delete those three. It's going to say remove that. The address. Now once again, the address is another area of problem oftentimes. So notice we've got the street and then the city and the state. Sometimes those can be in one cell when you export it. So here we've got, we've got bill to the city and the state is broken out here. So I'm just going to try to copy it this way one at a time. Again, you can look at Excel tricks to try to try to break out. This is a comma delineated cell versus putting them into separate cells. But I only have three of them. I don't want to get into Excel tricks here. So I'm just going to copy this and put that here. And then I'll copy this and I'll put that there. I'm going to double click and copy this and then put that there. And then the city Beverly Hills, I'll just copy that. That's going to be the same for all three of them. Well, they won't, and then I'll copy that down maybe. And then California, I'll just copy that down and the zip is 90210 for all of them. So I'll just say 90210 Beverly Hills, man. Okay, so there we go. And then we've got the county. I don't think I added a county. So I'm going to delete that right click and delete the opening balances are going to be these. I'm going to copy that put them in the opening balances and the date. I usually like to do. I have to put it in that format. They want 2022 dash 31 dash 12 dash 22. So let's try to put it in that format and that should work. I hopefully I think you can put it in the other format and it'll still work as well. So I'm just going to copy that and put it down and then the release number. I don't have one. I'm going to right click and delete it and let's like make that large. So I think that's the data that I'm going to be adding into the system. That is the data that I'm going to be at. And I think it's right. That is the data I'm going to be adding. And I think it's right. This of course adds up to our total of the 20,500 which is the 20,500 here. Okay. Let's save it file save as browse going into the desktop. Let's go on to the desktop. Let's go into QuickBooks online. Get great guitars and we're going to say this is the customer customers. Let's just call it that and then save it. And then I'll close it and let's go back on over and browse in our QuickBooks file. We put it on. I put it on the desktop in QuickBooks online 2023. Get great guitars customers and there it is. So let's go ahead and next. So now it's trying to match up the matching should be perfect for the cells that we have. This is matching the headers and QuickBooks to what the headers were in our Excel sheet. So name is exact company is exact because I use their template. So that matches up. We didn't have anything in the mobile fax website. The street is exact state zip. We don't have anything in the county opening balance is good date tax resale customer type good. Next gives us a summary of the data. We can adjust the view or the length of the cells by using this little line in between them. There's our email address phone street city and this isn't helpful. Get that out of here and private zip code opening balance. So I think that's good. So let's say import it import poor five or three for three customers successfully imported. That is great. So here we have it. This is the customer we had in there before and now we've got these three customers. If I was to hit the drop down or if I was just go into one of them. Here is the information the transaction detail and so on. Notice what they put in here was an invoice. So you're like why did they enter an invoice because we gave them a beginning balance and the invoice is the thing that is used to increase accounts receivable usually. And even though this isn't the actually actual invoice we gave them because we gave them an invoice from the prior accounting system. It still works fine because now when I receive a payment I can do the normal thing and say I want to receive a payment and match it to that invoice when they pay me even though that invoice was like a generated invoice from the system. Otherwise if you entered a journal entry and then you just assigned Anderson guitars as the customer for the journal entry. You're going to have a journal entry in here which doesn't easily match to the next step in the process which is to receive the payment. So you see the problem. So we have to that's why we have to whenever possible use the forms that QuickBooks wants to use that is related to the account that we're using. And if we're not going to do that if we're going to override with just a journal entry we need to be very careful even when entering the beginning balances as we're doing here. So that we can think about what's the next step and how you know the next step should be easy for the bookkeeper to do even though this was an outstanding accounts receivable from the prior system because they can just apply it out here. If I went to the edit up top you can see now the populated fields within the edit screen that we saw at the beginning when we looked at one by one and of course you can adjust it here. Now what's the impact on the financial statements. If we go to the balance sheet which I've removed now for some reason I've been working in the balance sheet tab. I'm going to go back to the to the reports and go to the balance sheet report close the boogie and then this is showing up again out of here. And then we'll do the day change 0 1 0 1 2 2 tab 12 3 1 2 2 run it. So there we have it. So now we've got the accounts receivable that was in there. So it's that 12 20 500. If I go into it then you can see that it created an invoice like how did it create an invoice if I go into the invoice. It doesn't take me to the data input tab that we use when we imported. It takes us to an actual invoice and then the other side of the invoice is going to services to and it says opening balances here. So it went to services which I would think would be an income statement accounts. We'll check that out. I don't think it went to opening balance equity. The other side went to there to split to the services. That's what normally happens. So you're like mad hit the income statement account. I wanted it to hit the equity account. I thought it was going to go into opening balance equity. It didn't. Doesn't that mess things up? Not really. Here's why. If I go to the income statement and run it to refresh it. We can see that we've got the 20 500 here. There's the other side. There's the invoice creating it. But it shouldn't go to that account. So I'm going to go back. But it's not a problem because we entered it as of the prior period December 31st, 2022. And therefore it's going to roll into the balance sheet. Meaning it's going to roll into here. You can see it in net income and then it's going to roll into retained earnings as of the period that we're starting at. So we entered the data as of 12 3122. If I go to the next year 0 1 0 1 2 3 12 3 1 2 3. Then it's going to roll up into retained earnings, which I'm going to rename to owner's equity at some point. So it's inequity. That's our strategy. Everything's in equity on the income statement. Yeah, that's there now. But I don't care what's in there before the cutoff before January of the year that we're entering current data in. I need a clean income statement for the current year. So if I go from 0 1 0 1 2 3 to 12 3123, we have a clean income statement. No problem. Anything from January going forward is going to be in the in this report in the current year anything prior to that. I don't care about the income statement numbers. I'm only looking at the cutoff date on the balance sheet as of January 1st, 2023. After I enter the data as of December 31st, 2022. Now, if, if for whatever reason you were entering the data in like in the middle of the year or you weren't trying to do it in the prior year and you did have a problem. With this, with this revenue number here, then you could make another journal entry if you wanted to adjust it out of here. You could do a journal entry as of 1231. You can go to the plus button here and then enter a journal entry. And then you can, you can, you can debit the revenue account and credit the opening balance equity if you so choose. So we could do that, but we don't really need to do that in our case. And I would suggest that you try to make a case. So you don't need to do that as well because I entered the data in prior period and it rolls into equity just like we planned. Therefore, I don't care at this point if it's an opening balance equity, retained earnings or net income, whatever, as long as everything washes out to equity, total equity will be correct after we get all the other balances in and then we'll make the adjustments to allocate total equity to the proper equity accounts, which in our case will just be the sole proprietor account because that's going to be the owner's equity account. So that's what we'll continue on with, with more of these accounts next time.