 QuickBooks Online 2024, enter service items. Get ready and some coffee because we don't accept excuses about being too tired. Unless for some reason, like someone made you carry two tires. Then maybe it's a legitimate excuse because then you've been too tired against your will. Anyways, let's do this. First, a word from our sponsor. Yeah, actually we're sponsoring ourselves on this one because apparently the merchandisers, they don't want to be seen with us. But that's okay, whatever. Because our merchandise is better than their stupid stuff anyways. Like our Accounting Rocks product line. If you're not crunching cords using Excel, you're doing it wrong. A must-have product because the fact as everyone knows of accounting being one of the highest forms of artistic expression means accountants have a requirement, the obligation, a duty to share the tools necessary to properly channel the creative muse. And the muse, she rarely speaks more clearly than through the beautiful symmetry of spreadsheets. So get the shirt because the creative muse, she could use a new pair of shoes. If you would like a commercial-free experience, consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com. Here we are in our Get Great Guitars 2024 QuickBooks online sample company file. We set up in a prior presentation. We're continuing to enter those foundational items that need to be laid down before we can continue with the cyclical process of the data entry and communication with our customer clients and employees, as well as the creation of the financial statements. Data input typically being done with the forms housed under the plus or new button grouped by cycle, customer cycle, vendor cycle, employee e-cycle. Communication with the customers, vendors and employees typically done and documented with the centers, sales center, customer center, expenses center or vendor center, and the payroll center or employee e-center. The setup process is usually housed under the cog up top. So we went over the company items. And now we're taking a look at what you might be thinking of as a list. Meaning we're looking at basically the chart of accounts at this point in time and pulling in the balances from our prior accounting system. I would typically go into the chart of accounts by going to the transactions on the left hand side. There's multiple ways to get in here and then the chart of accounts on the right. This is the chart of accounts provided to us by Intuit or QuickBooks. When we set up the company file, it's quite generic, but we're going to leave it in place for now and then just import the data from what we are imagining to be our prior accounting system. Remembering that when you're starting a new QuickBooks file, it's quite rare that you're not going to have any information that you're going to have to pull in. At the least, you might have started a checking account already and made a couple payments from the checking account. You might at least have to set up the beginning balance for the checking account or possibly pull in those bank feeds if you started a new file just from scratch and just a new business from scratch. But if you've been in business for a while, then you're probably going to have at least some of these accounts in some format of a prior accounting system, possibly a formal accounting system in other accounting software that we would need to then pull into our system. We are imagining we want to do so here by taking the ending balances from our prior accounting system. We're going to say is as of 1231-2023 and then enter that into our system so that we can start the new accounting system in the start of the new year, January of 2024. If you're starting somewhere after January, then you might want to run a parallel system still starting in January and enter the data so it's duplicated for the first few months of the year so that you have a whole year's worth of data in your current accounting system that making it most easy to create financial statements at the end of the year, possibly for tax preparation and external reporting. So now we want to enter these beginning balances. We're going to start by thinking about something that we'll be building up to the inventory asset. You'll recall that our plan from the prior presentation is not simply to enter a journal entry which might be our first thought to just enter this entire trial balance. That's because each of these accounts might have its own subsidiary account needs and therefore we're going to have to enter them basically one at a time. Now one of those accounts is going to be the inventory asset account. If you're using a perpetual inventory system, the inventory is possibly the most complex account to be entering into your new system due to the fact that you're going to have to pull in the items and the cost of the items as well as the sale price of the items into your new system. So we're going to first start however by thinking about service items that we sell. Service items are going to be things that aren't tracking the inventory but still appear on invoices and by looking at service items will get a stepping stone to then move on to the inventory items which do have the tracking of cost of goods sold and inventory and it will also be recording then this 2008-96. So at this point what we're doing now will not have any impact on our beginning balance but it's still part of the setup process because number one we need the service items in order to help populate the invoices and number two it's building up to us doing the next harder point which is going to be the inventory items which will result with us entering a transaction of this 2008-96 allocating the cost per unit of inventory so that we can have a sub ledger broken out by inventory which will also tie out to this number. So if I go back on over to QuickBooks if we think about the service items that we have to set up if I open this one up and we go into the sales area. This is where I would typically find them. You can also find them under the cog and under the lists but I think it's more common for most people to be working over here in the sales items and then in the products and services on the right hand side. So you see currently we have no service items it says here start adding products and services products and services being the things that we sell. So save time creating your next invoice or receipt you have item management add products bundles and services and basic inventory tracking. So we won't be dealing with inventory this time we'll deal with the inventory tracking next time now we'll do the basic service items. Why do we need the service items because if I hit the drop down up top when we have the sales that we're going to be making the sales forms typically used are going to be invoice forms and sales receipts forms. Now if you have a very simple accounting system you might use simply the deposit form to record revenue. So if for example you're in a gig work situation you're just getting paid by YouTube let's say and you're having that go through your bank feeds. And then once it hits your bank feed you're just going to add it as revenue to to YouTube revenue using in essence a deposit form. That's not exactly how QuickBooks is designed because they want you to use an invoice or sales receipt form. But in that situation that would be the easiest thing to do and would be a good system generally to have you're going to lose a little detail. You're going to lose some sub reports like like sales by customer possibly and sales by item. But that's fine because it's a simple thing to do and you don't have a lot of different customers because you're getting paid by a platform. However if you're if you're in a system where you have a cash register then you can't really do that because you're going to want to track the sales at the point in time you make them with most likely a sales receipt. And then you're going to want to want to be able to match the sales reports to the money that you have received and then deposit them. Therefore you're going to want to use a sales receipt form. And when you do that you're going to have items that will be on the sales form as well as the the customers allowing you also to get more detail about the income accounts. Because you can run sub reports breaking income out not just by account category but also by customer and by item service items inventory items. If you have an accrual system like you would in an accounting firm or a CPA firm or a law firm or a landscaping company or something like that. Usually you would have to do the work first and then try to see what work you did possibly with a billing system possibly counting your hours and then create an invoice based on what you have done. And then you're going to have to track the accounts receivable and be paid on the accounts receivable. So in that case once again you'll have a form that will be similar to the sales receipt that will be using items and and you'll have to track the items and that'll give you some more detailed reports. Let's take a look at an invoice to just to get an idea. If I go down to an invoice down here we have the product and service now note they give us two items by default hours and just services as a generic. So if I go into hours it gives us the quantity it doesn't give us a rate. So if you if you have certain service items that you sell then if they're specific items like you're going to you're going to charge so much for so many tasks. If we're get great guitars and we tune something we tune your guitar or something like that or we service you know the strings and or and we put new strings on or something like that. Then we might have a set cost for that task as opposed to the hours that it would take for that task. That is usually an easier thing to do because when you're charging in a store then whoever's doing the billing could could just pick up the task that they are doing rather than be tracking the hours of what they are doing. Even if you're in a job cost system such as the structure of a CPA firm accounting firm or law firm which is usually based around partners that are kind of like they're almost acting as individual owners who have co use of the staff. And the staff then is going to be allocating their time to the clients that are kind of might be mainly of the different partners right and then the partners are going to collect the time sheets from the staff. And bill their clients based on the time that was spent from each staff member on the tasks for those clients. So if you ever seen there's a there's a the devil's advocate which was a law firm movie one time and the guy with the law the lawyer was always saying I don't care if you're even just thinking about a client make sure you bill it you know give us the time we're going to send out the bill. However, that system is is often may not give as much confidence to the person the customers that you're doing business with especially if doing like repeat business with particular customers due to the fact that you know if different people are working on a particular project it might take them more or less time than other people working on the project you might have different billing rates for different people that are working on the project. And just due to the fact of their feeling different on different days, the hours could vary on the task. So you might be able to, even if you're in a system like that, try to make certain jobs as many as you can set billable rates. So if you're doing bookkeeping, you might make a set billable rate based on the number of transactions that you made and you might do that by going to the reports and we'll take a look at reports later. Leave without saving. But if I go into the reports over here, and I was to run a report down at the bottom the journal reports, we can run a journal report, which actually gives us all the detail about the accounts that were impacted. And we can run a transaction detail report transaction detail by date, so that we can see how many entries we entered at least in a month. And we might come up with some kind of billing cycle based on how many entries we made or possibly based on how many accounts we made. And therefore, when the client asks us, how did you come up with this number instead of just saying, well, it took this many hours by a staff member that currently has this rate. We could say, well, we did exactly this many transactions, or we did exactly this many accounts were impacted and our billing rates are dependent upon some range of accounts that are impacted. So that might be a little bit more transparent. So my point is, I would urge people, even if you're on a job system, you're charging by hour, that you might come up with some things where you can charge not by hour, but by what you did. And if you can get a little bit creative of how you might be able to measure the size of relative tasks, that could be more doable than you think at first. You can't do that with everything possibly, because a lot of loft projects, for example, if you take on a new client, you have no idea what you're getting into, right? You might be diving into a can of worms that's going to be lasting years. So you can't really commit to a price upfront or possibly or as easily you can have to have a bid for it or something like that. If you have a long construction contract, it's going to be the same type of thing. But sometimes you might be able to do that. You might be able to actually give a set price for whatever you're doing. The more you can do that, the easier your system will be because it'll be easier for you on billing time. You won't have to agonize over whether or not the hours were fair. They put too much. The staff took longer than the other staff member. The billing rates are different because you'll just have a set billing rate be more transparent to the client. So those are just some things to be aware of. And then when we actually process the invoice, it'll be easier, right? We can just pick what it is and it is what it is. We can possibly not do it ourselves but have someone else do the data input. So those are just some ideas for the service item. Now, when we get to the inventory item, if we're tracking inventory perpetually, then we're going to have to enter the inventory item and the system is going to need to know both the sales price and the cost of the inventory so it can track the inventory perpetually. We'll get into that next time but it'll be a similar process with added details of tracking the inventory. All right, let's close this out and leave it. And then we're going to go back into our transactions. We're going to go into our transactions. No, we're going into our sales and then we're going into our products and services. I'm going to close up the hamburger. I'm going to go down here, add an item and then this is how we can basically add the items one at a time. So we have the basic information on the right hand side. So we have the name. We've got the item type. Is it going to be a service item inventory item? We could even add an image which could be nice, especially if it was an inventory item because then that might give some people that are working on it something to tie to. So they can memorize what is happening if they're populating an invoice or sales receipt. SKU number, if we have a number, the category, we could categorize our items and that's going to make it easier to look at a long list of items because we can group them into categories, subcategories, sales. So I sell this service to my customers. So obviously if we sell them to the customer, we're going to check that off. This will be the description on the sales form invoice sales receipt. This would be the price, how much we sell them for. You don't need a price because as we saw, if you just put hourly in there or something like that, then you can populate the price as you go. But the more you have a set price, the easier it will be to enter the transaction. The income account, this dropdown is referencing our chart of accounts and the default for service items is going to services income. You might have more different income accounts that you want to be charging to, but you still don't want that many. So you might want to group your services into some broad categories, but not overly broad categories because you can run subsidiary reports which will break out the services, break out your income by item. If you are recording your income with the sales forms of invoices and the sales receipts. So we'll keep just the services here. Notice that the purchasing is not checked off at all because we didn't purchase. We're not going to purchase anything because this is not inventory. So we could add them one at a time here. However, I would like to be adding them by importing them. So let's go up top on this one and we saw that we had this ability under the tools to import. Let's go into the import setting here and you can see we've got the bank data, customers, vendors, chart of accounts. Here's the products and services. So let's go ahead and take a look at that. One quick note before we do, however, down here it says need to import data from other sources. If you're importing from QuickBooks desktop, then you might be able to have an easier process to do it because QuickBooks is trying to make it easier to move from desktop to here. Same with possibly importing from Sage 50, Peach Tree was the old one. It used to be that the desktop versions before online, the big two were Peach Tree and QuickBooks desktop. So they're trying to get those people that are legacy, a lot of people still using them, possibly an easier system to be pulling this stuff over. So need to bring in sales receipts, invoices, and expenses. You can take a look at the app here. Note that that's going to be another app, however, so you want to be a little bit careful. Make sure you do your research if you're going to be adding some kind of app to help you out with it. So we're going to go into the products and services and let's check it out. So here's our information. Now within this window, we're looking at the products. I'm going to be on the products without variance. And then it says check this box to overwrite details of existing items with the same name and category. We don't need to do that here. We don't have anything within it at this point in time because we're going to be importing as though this is a new company file. And we're importing our items. We could add them basically one at a time here. You could possibly even try to go over here and copy and paste them over. But we also have the ability to import a CSV file. So you can learn more here if you want to check it out. But a CSV file is basically something if you have it on your computer and you try to open it, it will open in the format of Excel. Usually if you have the Excel program, however, it's not going to have the formatting of Excel. It's actually a comma deliminated data file that can be opened by Excel. And it doesn't have the fact that it doesn't have the Excel formatting makes it easier to upload to database programs such as QuickBooks. So if you can get your data from whatever other system you have, you can export it to Excel, which looks like this. Most database programs will have that. The headers might not be the same. That's what we're going to need to conform to so that we can then take it and upload it here. We can convert that Excel file to a CSV file easily, and then we can upload it back over here. Now let's just take a look at all the headers up top. There's a lot of headers due to the fact that this could be inventory items, but we're just doing service items. We're not going to need all of them right now. So we have the buy and the sell. So in our case, we're only selling right now because they're service items. We have the product service name. So we'll have that category. If there were a category, we're not going to use them item type. So the type of item, service or inventory, SKU, sales description, sales price. What do we sell them for the income account? We call it service income purchase description. We don't have that because we're using service items purchase costs. We don't have that because it's not inventory expense account. We don't have that because it's not inventory quantity on hand. We don't have that because it's not inventory quantity as of date. We don't have it because it's not inventory reorder point. Then we don't have it. It's not inventory and inventory assets. So we don't have it because it's not in. So most of these we don't have because it's not inventory. Now you would think the easiest thing to do if you had it in Excel would be say to like copy the description right here because this looks like an Excel worksheet and then put it over here and paste it. But it won't let you paste like the whole worksheet like it was like it was a spreadsheet. You could copy one at a time. So if you wanted to do this and just and copy over this way and then just do it one at a time from your Excel sheet. That's one method that you could use. The other method would be to convert your sheet into a PDF into a CSV file. Let's try that. Let's import the CSV file. Do you want to leave without saving? Yes. And then it says upload your CSV file. So to make sure your layout matches QuickBooks, you can download the sample. Please note that you can upload CSV files with up to 150 line items at a time. If you have products in Excel, save it in CSV format before importing it. So you can't put the Excel file in place even though it looks like an Excel file. If you open up a CSV file on your desktop, but you can easily convert a CSV file in Excel to CSV. That's what we'll do. Import for the first time. Okay, so upload your CSV file. So I'm going to download their sample CSV. So I'm going to open it up. It opens up here because I'm in. That's where the downloads happen here because I'm in Google Chrome and I'm just going to open up their file. All right, here it is. I'm just going to expand their headers up top. I'm going to expand their headers so I can see what they're doing. I could select all of these maybe and just double click. And so now I can see what their headers are doing here. Now the formatting is not going to work for me if it's a CSV file. But I might want to save it as an Excel file so I can format it because it's easier to see and then convert it to a CSV file. So what I'm going to do is I'm going to go to File and Save As. I'm going to save this thing and see how it's a CSV file down here. I'm actually going to change it to an Excel worksheet so that I can get my formatting correct. And then I'll convert it back to a CSV file. So I'm going to put it here. I'm going to call this Service Items for Upload Excel. And so I'm going to go ahead and save it so it's saved as an Excel worksheet. So I'm going to save it. And so then I'm going to delete the stuff at the bottom. I don't need this stuff so I'm going to delete that. Right click and delete. And then I want to make the header rule bold because I want to see the header as a different field. So I'm going to select it up top and go make it bold. And then I'm going to make these smaller. I don't know why it made it so wide. Let me try to do this again. I should double click on it and it should open to the proper link. Double click, boom. So this one's still way too wide because there was stuff down below. That's why I'll delete this stuff down below and then I can format that. Okay, so now we're just going to go in and see I'm going to take my sheet over here and the headers might not match. So what I'll do is I'll just copy this and put it into the proper place on the other worksheet. So I've got the item name. I'm just going to say copy this. These are very generic names, by the way. So I probably could have gotten more creative with this. We sell guitars as our primary tool, but we'll play with these as just practice with the service items. And then later on we'll add more service items, which we're going to imagine to be guitar lessons that will manage in a similar way as you might do as a CPA firm or a law firm. And then we'll also think about selling guitars, I mean renting guitars, which is also kind of a service type of thing because we're not actually selling the inventory. Okay, so I'm just going to copy these kind of generic things, which look more like a car shop than a guitar shop. But whatever, we're going to bring that over here. Product service name. I'll put that in the service name. So diagnostic hourly service and so on category. I'm not going to add categories. Those would be subcategories of the items item types. It's going to be a service item. So service versus inventory are their main two item types. Non inventory is saying it's an inventory, but you treat it like service because you're selling things like nuts and bolts where you're not going to actually track the units of inventory. So I'm just going to make them all service. I'm not going to have an SKU number because it's not inventory sales description. I'm just going to put the same thing. So we had over here sales description and purchase description. They're the same. So I'm just going to copy that over here. Sales description, diagnostic hourly service, one hourly service to tuning support. And then I'm going to give us the price. So we're going to say the sales price. I said was 68 140 100 and 200 and that's basically all we need. I think I'm going to paste that here. The income account. I think we had an income account just called service. So I'm just going to call it service. That's the account that it will be going to on our GL account. We don't have a purchase description because we're not buying them. So so I could put the same description, but we don't really need it. We have the purchase cost. We don't have any because we're not buying them expense account. We don't have one because it's not inventory. We don't have any quantity on hand. The quantity, we don't need a date because we're not buying any reorder point. We don't need that because it's not inventory. And we don't have an inventory asset account because it's a service item. So notice how much easier the service items will be. And note that when we go to the inventory items, it's going to be similar, but we're just going to add those other things. So I'm going to save this right now. And now that I have it saved, if I close it and open it back up, it'll save my formatting of the headers being different. And I've got some borders here. But if I convert it to a CSV file, it will remove the Excel formatting, which is what I will do now. So let's go to the file tab, save it. And then I'm going to, I'm going to save it to my same location, but I'm going to convert it now to a CSV file, which is a is a comma deliminated file. And I have a couple, this one, CSV comma deliminated. So I'm going to call it now. This is my service items and it's going to be CSV file. So I'll save that. Boom. And then let's take a look. I'm going to close this one out and, and I'll close this for now. And let's take a look at the difference between the look of those two files that we currently have. If I open this back up, where did I put those files here? And then I'll view them large. So they both kind of look like Excel files, but this one looks a little bit different. And if I right click and take a look at the properties of the file, I'm going to right click and say I want to look at the properties. I can see it's a CSV file. When I open it up, it's going to look like Excel, but it's going to erase all of the formatting that I had in Excel. So now it's just, it went back to the, all the columns are the same width. No bold. It's not zoomed in. So that's what we want. That's the one we want to upload. It's just, it's got no formatting. So I'll close this one. I don't know what, what I did there. And then I'll go back in and say, okay. And so now we're going to upload import CSV file. And then I'm just going to browse and find it. Now notice when I browse here, it only shows me that one file because it's looking for a CSV file. It doesn't even see that there's an Excel file in there. It won't let you find it. If you have it as an Excel file, you're not going to be able to find it because it's looking only for the CSV type file. So I'm going to say next. And then it says map. So this is just simply mapping the headers to what's in the system, which should map out perfectly given the fact that we copied our information to the template, which matches the headers that are on the screen. So you can see the product and service that maps out to our header that we had. The category maps out to our category because we copied it over item number matches out all of them are checked off here. So everything matches out because we copied our information over to what they, what they had on the template. So everything looks good. We're going to say next. And then it simply populates it here. Notice it didn't populate the income account for some reason because it didn't pick up the service account properly. So I'm going to say, let's go in here and say it should be service income. I think we had an income account called service services. I think I missed the S. That's why it didn't pull it in. So I'm just going to say, all right, this is going to be services. See if I can. Oh, no. So a little bit wonky services. I'm going to have to do the drop down routine every time. Services. And let's go down and one more time. Services. Okay. Services, services, services. Okay. Any other things that they don't like? I don't think so. So something's not quite right. I think I fixed it. So let's go ahead and save it. I think we're good to go. So let's go. If we're good to go, why aren't we going? Nicely done. You saved four products. Thank you. QuickBooks. That makes me feel good. Let's open up the hamburger. Let's go into the sales tab and in our products and services. Now you can see that we have these products that have been included. The diagnostic, the hourly. And so now we've got hourly one, hourly two. This was the default hourly that they put in and the services. Those don't have any, any amounts. Now, if we wanted to make any changes to these items, we can edit the items. So if I go into the editing, we see the screen that we started with, which gives us the information on the right, these, these line items matching out to the line items on our CSV file that we uploaded. There's the name. We item type as a service versus inventory or non inventory. We didn't have an SKU, no category grouping. The sales is a diagnostic. We're selling them for 68. We don't have any. We're going to be putting it to the service income account and then we don't have any purchasing information. If I check that off, you can see the rest of the fields that were on the Excel or CSV worksheet, the purchase description, purchase cost, the expense account and the preferred vendor. So I'm going to undo that again. We'll cancel this. If we wanted to make an item inactive, then we can select the dropdown here and make it inactive. So we have our run duplicate and make inactive. You can't typically delete an item once you have set it up because the system might have used the item to record a transaction. And if you delete it, then that would remove it. That would mess up the transaction, right? But you can make it inactive so it will no longer show up in the dropdown. Now if I select the plus button here and I was to go into an invoice or a sales type form, invoice or a sales receipt under the products, now I can choose a particular product. So instead of just having hourly rate, if I say that I have an hourly service or something that already has a set rate within it, 140, or if I was checking an hour rate that would be based on so many transactions, for example, for bookkeeping, I might have multiple items that say this is from 100 to 200 transactions, and this is going to be the cost for that or so on. Or the diagnostic here, if we did a diagnostic on a guitar, I guess that would be changing the strings and what not, oiling up the neck or whatever, but the rod, straighten out the rod of the guitar. But in any case, there it is. It populates automatically. That's the point. It's going to make the data input easier to do when we record the invoice. Then it's going to record the increase on the sales side to the service revenue account and the other side is going to be going to accounts receivable if it were an invoice. I'm not going to record this. Don't record it. We're just checking out what that item is doing. So leave without saving. So those are clearly foundational items that we need in order to do our normal cycles of the customer cycle if we sell service items so we can easily populate our invoice forms and our sales forms. However, that didn't have any impact on our beginning balances here because the service items don't deal with inventory. However, when we add the inventory items, if we're tracking inventory on a perpetual inventory system, we will have to add the cost of inventory, which should add up to the total here. That's what we'll take a look at next time, basically leveling up the same process to now tracking the inventory versus just having the service items.