 QuickBooks Desktop 2024 Unearned Revenue Estimate Sales Order Receive Payment Forms. Get ready and some coffee because we're locking into some non-stop QuickBooks Desktop 2024. Here we are in our QuickBooks Desktop sample company file. We set up in a prior presentation using the enterprise version of QuickBooks Desktop so we can practice using the new Unearned Revenue feature. Under the view drop-down we have the hide icon bar selected. The open windows list selected. Open windows open on the left-hand side. Under the company drop-down we have the home page open. Under the reports we're going to look at the two major financial statement reports under company and financial like we do every time starting with the balance sheet report. Let's go to the customization change in the range in from 010127 tab, 123127 tab, fonts and numbers. I'm going to bring that font on up to 14 like we do every time. Okay. Yes, okay then. Then we're going to go to the reports drop-down again company and financial. This time the P, the L, the profit, the loss, the income statement. Change in that range. This time though from 010127 tab, 06327 and tab. And then I'm going to look at this on a month by month breakout, not the totals but on a month by month. And then let's go to the customize reports up top. We're going to customize and let's go to the fonts and numbers changing and bringing that up to 14. Okay. Yes. And okay. Let's actually go out one more month out to July. So I'm going to go 073127 at the end date. So we've been running our scenarios and kind of a side-by-side month-by-month type of breakout. We first started with a scenario where we didn't have any prepayment. Then we ran a scenario where we had a deposit on a large purchase like a surfboard in our example and we had a negative receivable, the old method and then we ran a scenario with the negative receivable subscription type of model for a magazine or a newspaper or a computer subscription model. And then we used the new feature first looking at a scenario where we have like the big deposit on a surfboard. Now we're going to look at the subscription scenario with the new feature not having a negative receivable but rather having a positive liability. So let's look at that over here on the home page. So we're imagining now that we sell something like newspapers or we sell a subscription model for our software, for example. In that case, what happens is we're going to get the money first. We're going to receive the payment before we invoice. So to properly record it, we shouldn't be recording revenue when we get paid but rather when we do the work. So this is the classic example in most book problems for unearned revenue in which case we're going to get paid for say like a year's worth of subscription, let's say, and then as the time passes, we should take it out of the liability account, which we're going to put it in when we get paid and remove it from a liability account to a revenue account. Now what usually generally happens is we're going to make the estimate. We might not make an estimate in this kind of model of a situation with a subscription, but we'll do the same starting point. We'll make the estimate. We'll lock people into the estimate with the sales order. These are non-financial transaction forms. And then from this point, instead of creating the invoice, which would record revenue, we're going to jump on over basically to the receive payment because we're going to get paid before we record the invoice because the invoice records the revenue. Now the receive payment would traditionally usually make a negative receivable if we don't have an invoice to tie it out to, but now we're going to make a positive unearned revenue with the new feature being turned on to allow us to put it into the negative revenue account. And then we can create invoices. Basically we're thinking like on a monthly basis to write down the unearned revenue and record the sales as they happen. So that's going to be the process. If I go down to the customer drop down and we go to the customer center, we ran a similar scenario, which I think was scenario number four here where we had a similar process, but this is with the negative receivable. So we made an estimate. We made a sales order and then we collected the payment all upfront. That payment created a negative receivable and then we made invoices to apply out to the payment as time passes. So internally from this page, this process is pretty nice from a bookkeeping standpoint, although not exactly correct from a financial reporting standpoint because if I go to my balance sheet until we pay it off, we're going to have that negative receivable in the client. Let me show you in a customer report reports drop down. We're going to go into customers and receivables and let's look at the customer balance detail. So we looked at let's make it a little bit larger. Let's go just to 12 this time. We're not going to go crazy to all the way up to 14 with this one because it's kind of a long report or wide report. Let's make it to 12 though. And then so we had this one here where we had that payment first and then these are being applied to it. So notice it's a negative number which is not correct because it should be a positive liability not a negative receivable but from a from just a a sub ledger perspective. It's quite easy to see in this format. So now we're going to do the other format where we're going to create a liability account. So as long as it's negative, it shouldn't be showing up in the customer side or the sub ledger for accounts receivable, but rather for some other sub ledger that we will set up. All right, so let's do that. We're going to go to the home page. First, let's make an estimate. So we'll do a same starting point the same starting point estimate and I'm going to call it then a similar name that we were calling the ones before so we can remember it's going to be five. I'm going to call it unearned revenue customer, which is a weird name for a customer. But the point is I'm trying to remember the scenario that we're running here. So we're going to say QuickBooks, add it, boom, boom. And this is going to be as of 070127 tab, tab, tab, tab. I'm going to make a new item by a similar name and we're going to make multiple items down here. And this is a method that might be used for a subscription type of model, which will make it easier to make our invoices monthly.