 Zero Accounting Software 2023. Purchase order adding new items as we enter the purchase order. Get ready to become an Accounting Hero with Zero 2023. First, a word from our sponsor. Well, actually these are just items that we picked from the YouTube Shopping Affiliate Program, but that's actually good for you because these aren't things that we're just given to us from some large corporation which we don't even use in exchange for us selling them to you. These are things that we actually researched, purchased and used ourselves. Acer 27 inch monitor. I've been using an Acer monitor as my primary monitor for a few years now. This is the first Acer monitor that I have used after having used a series of different brands of monitors in the past. The Acer monitor has been performing well and I'm trusting the Acer brand more and more as I use the monitor. I have a 27 inch monitor which I think is ideal for what I do, which is of course the screen recording and the editing. If you would like a commercial free experience, consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com where we have many different courses. You can purchase one at a time or have a subscription model giving you access to all the courses. Courses which are well organized have other resources like Excel files and PDF files to download and no commercials. Here we are in our Custom Zero homepage going into the company file we set up in a prior presentation. That being, get great guitars. We're going to duplicate some tabs to put reports in like we do every time. Right click on the tab up top to duplicate it. We're going to right click on the tab up top again to duplicate it again. Back to the middle tab, opening up the accounting dropdown, scrolling down to the good old balance sheet. Tabbing to the right accounting dropdown. This time the income statement, but I'm going to open up that comparative income statement. If you don't have it, you can just open the normal income statement. But this one comparing the current month we are in February to the prior month January going back to the balance sheet as it has thought through and formatted itself here. We're going to customize the date and bring it on up to 2023 and then the end of it and then make it up to date. All right, let's go to the first tab now. Now we're going to be entering a purchase order as we similar process that we did in the first month. But the one difference here is we're going to be trying to add a new item as we add the purchase order. So a quick recap of the process of what a purchase order does by looking at the flow chart. This is from the screenshot of a QuickBooks desktop, but it's just looking at the flow of forms, which is basically standard for any kind of accounting system. So the purchase order is part of the purchasing cycle, which at the end of the day we would expect money to be going out of the company for the purchases of goods and services that we're going to be using in the future to help us generate revenue. In this case, of course, the purchase of inventory. Now the purchase order is that special form. It's special because it generally does not have an impact on the financial statements. It's different than what you might think of when you basically make a normal purchase of something from an online shop, for example. Because when you purchase something as an individual or I purchase something, I know they want me to pay for it. At the point in time, I buy it from the online store and therefore I would record a financial transaction impacting my financial statements at that point in time. But with the purchase order, you're requesting the inventory, not making a payment at that point in time. They're going to ship you the inventory and then you enter it into the system and therefore we want to track the purchase order. But it's not going to have any impact in terms of our financials because we don't actually own the inventory yet and we don't actually pay for it at that point in time. And you would only use the purchase order if you had a little bit of power on the purchasing side of things because that's kind of a beneficial thing to the purchaser in the transaction to be able to receive the inventory and kind of check it out before entering the bill. Okay, so let's go back on over and so notice if we're going to enter the purchase order, we could do that with the plus button here. A couple of different ways we can get into the purchase order, but it's a normal kind of business transaction. So now we're in the normal flow of things for the second month purchasing inventory. We're going to add a new vendor as we go and that vendor is called Fender. Fender the new vendor. So we're going to add the new vendor Fender as we do the purchase order. We're going to buy guitars because that's what we sell from Fender, which is our new vendor. Let's bring this on back to February, February 2nd, let's say delivery. I'm going to keep that blank, but if we had expected delivery, they would have that their reference theme is the standard and no tax. So then we're going to have the items that we're going to set up new items because we've never dealt with the new vendor Fender yet. So we don't have any items set up for them. So we'll hit the drop down or rise up because it's going like up. So the rise up and we're going to add a new item as we go. This being an inventory item. I'm just going to call it an SQ item name. It's going to be a squire. We're going to call it some kind of guitar, a squire guitar. I'm not an expert here. So bear with me. So we're going to say the costs. First, I have the sales price. I'm going to say I sell this item. Let's pick up the sales price, which I have here at 244. And when we sell it, it's going to go to the account of the sales account. And we are going to apply sales tax to it on the selling side of things. The selling side of things happening, not this time, not when we enter an invoice, but rather when we, I mean, sorry, not when we enter the purchase order, but rather when we do enter the invoice or the money in form, the sales receipt type form. All right. And then the cost I'm going to put up here is 168. We're going to say, so I'm going to say, okay, 168 on the cost. And when we purchase it, it's going to go, well, it's going to, I'm going to leave that as is. We're not going to have any tax on the purchase side of things. Cause we're just going to have the sales tax on the sales side of things. And then I track this item. We're going to say yes that we track it because we're tracking this in a perpetual inventory system. And therefore we want to track it within the inventory account. And in the sub ledger where it says here, this treats your item as a tracked inventory asset. Zero will record the quantity on hand and prevent you selling below a quantity of zero. All right. So that looks good. Everything looks good to go movie B to the end. So let's record it and it wants a cost of good sold account. Let's put that in cost of good sold and then no tax. Okay. Let's try it again. Ultra vase. Okay. There we have it. So it looks good. And then how many of these we want? So there we have it. So we're going to say I'm going to say 20 of them. 20, we want 20 of these things, please. And so 20, I said 20, I believe. So that comes out to 3360. That's the amount we're going to purchase for. And I'm going to put a note down here. I'm going to add a note for my internal purposes. I put a note and I'm going to say that this is for customer new music stuff. Meaning we imagined that this customer came in and ordered these guitars. So I'm going to be purchasing them from this new vendor, vendor purposely and then turn around and sell them when I get them to a customer. We're going to be setting up if we don't have them new music stuff. Now this form looks like it's going to record an actual transaction, but it's not. We're just going to track the purchase order internally. So let's go ahead and approve it and check it out. So now I can go into my business dropdown and we can look at our purchase orders. And we're going to be waiting for that purchase order to come through. It's got all purchase order here. We're looking at the approved purchase orders. Those are the ones that we have not yet received. And once received, then they're going to move. We're going to, we're going to imagine we get the guitars in a box with a bill in it, a physical bill that we can then enter in the system, either paying the bill at that time or possibly entering the bill as a bill, which would enter and increase accounts payable, keeping those two things separate in our mind. The physical bill that will come with the inventory is different than the data input bill, which means that we're going to be increasing accounts payable. That's basically what it means within the accounting software. We can also of course go into our contacts over here and we can take a look at that new vendor, which was named Fender, I believe, which is kind of cool because it rhymes right there. So there's our new vendor Fender. We've got the purchase order outstanding. So if we want to contact them or talk to Fender, the new vendor, we can go into it this way as well. All right. So there's no change to the financial statements. We didn't even need to open them this time. Even though we did a data input, no change to the financial statement. It is unusual noting because most of these forms are designed to make the data input as easy as possible. And then the system zero using that data input to create the financial transactions, which will create the financial statements, balance sheet income statement and related reports. But the purchase order special doesn't have a financial transaction related to it, but we still need to track it internally. And these are the locations we do that in.