 In this presentation, we will create invoices for service items, setting up new service items as we do so. We will be setting up these service items in a similar fashion as you might see for a legal firm or an accounting firm, in which case we'll be having billable rates for different employees that we'll have to count their hours for and then make invoices to our customers based on the work that is done. Our invoices will be based on music lessons, so we're going to imagine in our music store we have different instructors and we're going to get a timesheet from them and bill our customers based on the hours that have been set in our timesheet based on the different instructors. This is kind of a job cost type of system for a service company. So to do that, we'll set up new service items, we'll also set up a new account on the income statement to track this type of income. Let's get started with Sage 50, Cloud Accounting. Here we are in our Get Great Guitars file, we're going to go back up top to our Customers and Sales section. Let's first start off by opening up our income statement, I'm going to go to the reports drop down up top, we're going to go down to the financial statements, financial statements, we want to take a look at that financial statement of the income statement, opening up the income statement, going to be for the month of February. I'm not going to have the zero balances, so we will untick those items and there is our information for this month. So we have the sales income and the service income, these are the two types of incomes that we are currently grouping our information into. We're going to be setting up service items here and we're going to set up another income account related to it and this is going to be service items related to our guitar lessons. So we're going to be providing guitar lessons and we're going to say we have instructors to provide those lessons. Now as we do this, just remember that when you look at the income statement, you don't want to set up too many income statement accounts. In other words, you probably wouldn't want to set up a new account for every type of service item. For example, you wouldn't want one for every guitar instructor most likely, but you might want another one for the group of guitar lessons as separate from other service income that you would have. So just be aware of the grouping or when you would want another account here or not on the income statement. We will set up another account for the guitar lessons. We'll be billing this out in a similar fashion as we would. I'm going to close that out, close this out as we would for a law firm or a accounting firm in which case we have our employees. We pay those employees, but we also charge for their work and those two things are not necessarily related. We're charging for their work on an hourly rate. They're going to give us their time sheet. Then we're going to be charging for their work to the customers. That means we're going to have to kind of lag on our invoices because we have to get the time sheet weekly or whatever bi-weekly and then enter that into our system so we can bill the customers for them. So we're going to go to the sales invoice. I'm going to create another sales invoice here and we're going to create our employees, our instructors, information up top as going to be something that we will be billing for. So our first client that we're going to have, we're going to have an instructor who's going to give us our time sheet and we're going to have our first client. So this is going to be someone who we're giving guitar lessons to. That's going to be Star Lee is going to be our client. I'm going to copy that because we're going to have to add star. So I'm going to go down here and I'm going to say new. So we're adding the customer at this point. I'm going to put the customer ID is Star Lee. The name is going to be Star Lee. We might want other contact information. I'm not going to put it here for this. I'm going to put lessons as basically the customer type. I might not do that every time, but I'm going to say, let's save that. And that's who we're going to be billing. I'm going to close this back out and there we have that tabbing through. Let's put this as of the 28th. That's fine invoice. I'll put here for purposes of the practice problem. Then I'm going to tab through and I'm going to then enter the new item. So we're going to have a new item. So we're going to set up a new item here. I'm going to say magnifying glass, opening up the dropdown. We're going to say new for the new item. I'll make this large. This is going to be Jodi Jodi guitar lessons. I'm going to copy that. So Jodi is going to be our instructor. She's having guitar lessons and she's going to give us our time sheet that we're going to be billing on. So it's going to be a service item. The rate down here, we're going to say is going to be 190 hours. So she's a good guitar instructor. So we're going to say then the dropdown. Let's make a new income account. We're going to make a new income account here. So I'm going to say we need a new one, new income account. Now, number-wise, it needs to be next to the other income account. So the income accounts are going to be down here in the 4,000. So 4,055, let's say, 4,405 and we'll call this guitar lessons. And then that is going to be an income account. So we want to make sure that this is an income type of account. So that's what we're going to have new service item. I'm going to save this and then close this out. And that looks good. Let's save this now. This looks good. And let's close this out. And then we're going to take the item is going to be Jodi guitar lessons. And we're going to be charging the hours. We are going to say our five hours. At the 190, that's going to be the 950. No sales tax applicable. So what's going to happen when we record this? It's going to be increasing the accounts receivable. The other side is going to go to income. In the new income account, we just set up no inventory or anything involved. So now we're going to say, let's say, save up top. So we're going to do this for, we're imagining we're going through the time sheets now. So I'm going to say save up top. So then I'm going to go back up top and do this again. We're going to add another customer. So I'm going to say new customer. And we're picking this up from Jodi's time sheet. Now, Diana Martinez, Diana Martinez, I'm going to copy that. So we're going to copy the name and put that down below. And then I'm just going to save that. And again, we might put down here that this is going to be the lessons as our customer type may not do that every time, but that could be useful. I'm going to say save and then close this back out. Then everything looks good up top. So I'm going to put this is going to be Jodi guitar lessons. So that's going to be the item. And we're going to say once again, five hours here as well. So that's going to be the 950 same effect on the financials. Then I'm going to say save up top. And we'll do this again. Notice I set up the customer, but then didn't then add the customer. So it should be Diana Martinez. Then I'm going to save it. There we have it. Next, we're going to add another one. This is going to be, I'm going to say new. We'll have a new item again, new customer name is going to be a Len. And this is Jackson, Len Jackson. I'm going to copy that and put that down below as well. We're going to say this is going to be for lessons. So we'll pick up the lessons and then save that and close it out. So that looks good. So I'm going to pick up Len, Len looks good. Tab through here. We're then going to be down below. Once again, this is going to be Jodi guitar lessons. And we're going to say 10 hours a lot of work here for Jodi. And that's going to be the 1900 same effect on the financials increasing the receivable increasing revenue. So let's say save up top. I'm going to say save up top. And we're going to go to our next employee's time sheet. Now we're looking at the time sheet for Angela. So Angela's time sheet. And so we're going to say that her client is Jenny, Jenny Jones. So don't we have a Jenny Jones here, Jenny? No. So we'll set up Jenny. So we'll say new. We're going to say new down below, new customer. That new customer being Jenny Jones. And then I'm going to copy that. So I'm going to put that down on the name down below. We're also going to say it's going to be a service or a lessons that lessons. So we will pick that up. And then I'm going to say up top, we will save that and then close this out. So then we're going to make sure that we pick up the name again, which is going to be Jenny, Jenny Jones. Then we're going to go down to the item down below within the item. This is for Angela. So we haven't set up Angela yet. This is our other instructor now. So I'm going to set up another inventory service item. So it's going to be a new inventory service item. And we're going to say this is Angela, guitar, lessons. And I'm going to copy that. They wouldn't let me put the S there because it's too long. I'll put it down here. And then it's a service item. I'm going to put it here too. We should have done that on the last one probably. And then I want to put in the account. It's going to be the guitar lessons account. So that's the only one I need to change there to make sure it goes to the proper account. So let's go ahead and save that. And then I'm going to close this. And then I'm going to put in here Angela, guitar, lessons. And we're going to say that this is going to be for seven hours. And I didn't put a rate for the Angela, guitar, lessons. So I'm going to put that here. The unit price I should have put in place. I'm just going to add it here. We could go back into the items and add it. But I'm going to say it's 150. So I'm just going to put it in here for now. And that's going to do the same thing. It's going to increase the accounts receivable. The other side is going to go to that service revenue account once again. Let's go ahead and save that. So I'm going to say save. Next customer for Diana, we're going to go back up top. Or for Angela, she's our instructor. We're going to say new, set up a new customer. The customer is going to be Diana. So it's going to be Diana Miller. So we're going to be in here. We're going to say Diana Miller. And we're going to copy that. So I'm going to copy, put that in the name. We're going to say the type is going to be lessons once again. And we will save that. And then I'm going to close this one back up. And then we're going to go into the items down below. This is going to be Angela. And it's going to be six on the quantity. And once again, I'm going to have to fill the rate of 150. And that's going to be 900 there. So same accounts affected. We're going to say save and move on to the next one. I didn't set up, I'm going to say, okay, I didn't pick, I set up the customer that didn't pick the customer. So it's going to be Diana Miller, Diana Miller. All right, then we'll save that one. Now we'll set up the next one. I'm going to add a new customer. So we're going to select the dropdown up top. We're going to say new customer. This is going to be Jill. So I'm going to say Jill Gonzales. So Jill Gonzales and we'll copy that. I'm going to copy that, put that in the name as well. I'm going to say that type is once again, going to be the lessons. And then we will save that and then close that. And that's going to be then Jill up top. So we're going to say Jill. And then the item is going to be for Angela's guitar lessons. We're going to say nine hours in the quantity and the unit price, $150 for $1,350. So $1,350 increasing the AR, increasing the revenue. We're going to save that one. So I'm going to say save up top. And we're going to do this for one more instructor and that's going to be Rebecca. So three more clients, one more instructor. So we're going to say another timesheet for Rebecca's guitar lessons. We're going to add a new customer up top. That customer is going to be Noah Davis. Noah Davis, I'm going to copy that. And that'll be the name as well. The type is going to be for the lessons. And I'm going to save that, close this back out. We're going to be picking up Noah here. And then I'm going to add a new item. So this is for our other guitar instructor. We're going to say new item for this guitar instructor. We're going to make this large. We will then pick up, this is going to be Rebecca. Guitar lessons. And that's all I could fit there. So I'm going to copy that, put that down below lessons. And there we have that. Going to put that in the for service. Going to see if we could pick the price level this time, which is going to be $100. And we want to make sure it's going to the GL account, which is going to be the guitar lesson, GL account 4055. Then we're going to save that. Going to close this out. Item then being Rebecca guitar lessons for $100 an hour. And we're going to have here eight hours, $800. We're going to save this. Next one, we're going to say plus and add a new customer, new customer. Rebecca, our guitar instructor, second customer, which is going to be Grace Matthew. Going to copy that, going to copy, put that down below as well. Grace, this is going to be for lessons. So I'm going to pick up the lessons and save that. Close this. We're going to put that up top and this is going to be Grace. And then we're going to say this is for the item of Rebecca. And the amount here is going to be six. So we're going to say six and I missed the amount. It's going to be on this side, six. And it should be Rebecca's guitar lessons. I'm going to delete it. And that'll give us the 600. So we're going to save this and do it one more time. So let's save this and do this one more time. Last customer's PAM. So I'm going to select the plus button up top. We're going to have a new customer. And then we're going to say this is PAM Smith, PAM Smith. I'm going to copy this, put that down below. Then we're going to say that the customer is going to be or lessons for the type. And then I'm going to say save. We'll close this out then. And then in the items section, we're going to put the item of Rebecca guitar lessons. And this is going to be quantity eight. And that'll bring us to 800. Let's go ahead and save this and then take a look at our financial statements. I didn't add the customer again. So I'm going to close this back out. We made the customer but didn't add the customer. It's going to be PAM, PAM Smith. Now let's save it and now let's close it. Let's go to our financial statements. Do we have our financial statements open already? We've got the income statement open. You'll see the guitar lessons now at the 5,500. So then if we were double clicking on the guitar lessons, we're going to have our information in there. So there's going to be our guitar lessons that we have. This is going to be a different income account. We set up another income account for those guitar lessons. The other side, of course, being on the balance sheet. So if we were to go back to our forums, I go to our reports, drop down, go down to the financial statements, then the balance sheet. Choosing February, the month that we are in and then in the accounts receivable, double click in the accounts receivable. Here is going to be all the information in the accounts receivable. That then also being tracked by the subsidiary Ledger report, which will track this information, tying out to the accounts receivable, tracking by customer. That's going to be it for now. Let's get out of here.