 QuickBooks desktop 2023. Enter purchase order or PO. Let's do it within 2-its QuickBooks desktop 2023. 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. Here we are in QuickBooks desktop give great guitars practice file we started up in a prior presentation going through the setup process we do every time maximize the homepage to the gray area view drop down no team we got the hide icon bar open windows lists checked off open windows open on the left hand side reports drop down company and financial let's open the P&L profit and loss income statement change the range from 010123 to 123123 nothing is in it thus far going to the reports drop down again company and financial this time the balance sheet and then let's customize that one for the range change from 010123 to 123123 January to December 2023 fonts and numbers to increase that font size to 12 OK yes and OK. In prior presentations we imagine that we had an accounting system outside of QuickBooks we transferred the ending balances from the prior system to the beginning balances as of 1231 2022 and then we're going to start our current data in the system 2023. We then imagined the kind of transactions that would be in place oftentimes when starting a new business which will be financing the business. So we then thought about us as the owner putting money into the business and we thought about taking a loan out increasing the checking account increasing our cash. We then took some of that money and we put it into an investment as we're holding on to it to see if we can get some return on it as we're holding on to it. Then we bought the necessary equipment which is typically the next step that we're going to use to generate revenue that being the furniture and fixture. Now we're going to be thinking about buying the inventory which is of course the next thing we need to stock up or get our hands on before we can start selling it and making money. So we're still not to the point where we're really generating revenue. We're still at the point where we financed the business. We're doing all the startup process. We got the we're imagining we got the store and we've got the furniture and equipment the fixed assets that we need to generate revenue. Now we got to buy the inventory of course. Now if I go back to the home page you'll recall we did some discussions on the different kind of inventory processes that you could be using. So if you're tracking inventory within the system first of all you might be in a type of business that does not have inventory a service business. We will record some service transactions as well which is typically generally a little bit easier. If you have inventory then you might use a periodic inventory system or a perpetual inventory system. If you use a periodic inventory system then you might not set up the tracking of inventory within QuickBooks but rather track it outside on something like an Excel sheet. And then you might just enter your sales basically as you normally would with a non inventory tracking item or service item. And then you would adjust your inventory amounts periodically in accordance with the physical counts that you will do of inventory possibly nightly possibly weekly possibly monthly. That's one method you can do if you're tracking inventory within the system you're using a perpetual inventory system. QuickBooks usually uses the flow assumption of an weighted average flow assumption. You can see that you're tracking inventory because it'll have this top line on the vendors area. So let's just recap on the preference related to that by going to the edit preferences. And then if we're in the inventory items here we're in the company preferences we got the inventory turned on that needs to be checked off in order for us to have inventory tracking within the system. The tracking of the inventory will not only record the balance sheet account of inventory but also the sub account of the items of inventory we have. So then the normal process when we purchase the inventory will be the purchase order then the bill and then we're going to pay the bill basically the way we normally would. Now you might just say if you might be in a situation where you don't have a purchase order and you're just paying for the inventory as you as you buy it. In which case you might use just a standard bill form for example which would increase accounts payable and record the inventory that you're purchasing to an item. Track it in the payable and then pay it or you might use just a check type of form in a similar fashion when you purchase the inventory. But you might be in a situation and this would usually be one where you have a bit more leverage on the purchasing side where you have a purchase order. A purchase order is more of a unique form because unlike most forms it doesn't actually have a financial transaction related to it it's just a request for inventory. So remember if you're purchasing something like from Amazon on the personal side of things from an online store. You pay for it at the point in time you order it and therefore you have a financial transaction even though you have not yet received whatever you paid for. But with a purchase order that is a situation let's say we're buying our guitars from from Epiphone or whatever. We're going to request the guitars from Epiphone but we're not going to pay for them until they get to our warehouse which means we have a little bit more leverage. We're going to say hey you give us the inventory bill us and then we'll pay you. So that means at the point in time of the purchase order we have not made a payment and we don't have the inventory therefore no financial transaction. But we want to track the fact that we made the request so that we can then tie it to the bill that we will receive. We'll imagine we've received the bill with the box of guitars that we're going to receive in the future. That's the general process. Let's open up a purchase order. We're going to imagine that we're going to be ordering our guitars from Epiphone in this fashion. So we're going to say Epiphone do I have that vendor yet. We do. That's the one vendor we've done business with already. So we're going to say Epiphone. I'm going to say keep the shipping as is because we would like it to be coming to us at our address here. We got the template. We're going to use the standard template. We're going to say for our practice problems can be 01 let's say 12 23 01 12 23 will keep the purchase orders will be numbered for us. The vendor doesn't have any other information here because we just put the name on the vendor information. But if we're emailing this to them that might be all we need. We need it to be shipped to us. So we're going to need our address that we want it to be shipped to. So you get the other options for ship to options if you add other options for the shipping. If you have different locations and then we're going to add the items. So these are the inventory items that we set up. You'll recall in the lists the item lists where we've got the inventory items we're considering now. So I'm going to say that we're going to be purchasing. I'm just going to start typing them in an ELP tab that pulls in the Epiphone less Paul quantity. I'm going to say 20 of those 20 of those. 20 times $400. That's the cost. Not the sales price is going to be $8000. We're not purchasing it for a specific customer in this case. We may purchase it for a specific customer in the future. If someone comes into the store and they say I want this particular guitar. I want it in plaid or some weird color or something. We don't have that. Maybe we then order it from Epiphone specifically for them tracking the customer as we go. Epiphone our vendor the person we're purchasing the guitars from doesn't need the customer information clearly. But we want to track it possibly internally so that we when we get the guitar can turn around and sell the guitar to the customer we bought it for. But we're just buying these for the shop here. So this is going to be an EPR. Let's say that's going to be an Epiphone Riviera. Let's say we're going to get five of those at 440 which is driven by the thing and that gives us to 20 driven by the item. The thing EPS H that's going to be an Epiphone semi hollow body. Let's say we were going to buy four of those and that 320 cost 1000 to 80. And then we're going to say we buy an EPS P which is an Epiphone standard pro. Let's say we buy five of those and they are the 2400 because they're 480 times 5. So that comes out to 13,880. Now everything that we see on this purchase order would indicate to us there should be some impact on the financial statements because it looks like there would with all these numbers on it. But no, because it's going to be the open it's going to be the purchase order that is open. And we're going to tie it to a bill so no financial transaction to it. So I'm going to save it and close it just to check that out. I'll add the Epiphone. Did I misspell Epiphone? If I misspelled anything I apologize. And so we're going to go back on over here now when we create the bill next time we're imagining we will receive the Epiphone guitars. And if I type in Epiphone it's going to say here's a purchase order and we'll be able to populate the bill from the purchase order. When we get the guitars imagining that there's a bill inside the box of the guitars telling us you owe us money. We can also track the purchase order by going to the vendor center here or vendor center drop down. And we can take a look at the purchase order Epiphone. There's the bill right there. So I'm sorry. There's the bill. We want to see the purchase order. Let's go to the transactions all transactions and let's say we need to say all dates. There's the purchase order. I had to change the date because I'm working in the future. And then I can also see it in the transaction area here. And so we've got the purchase orders up top and we're searching the purchase order. So this is purchase order and the date for all transactions. So if I go into that there's the purchase order. Okay let's do a couple more now I'm going to close this out. I'm going to say okay let's go into the home page and let's do another one. Now note you can go into the purchase order here. You can also go into the vendor center that we had open and you could go to new transactions. So there's multiple places you could go to add a purchase order. So I could say new and I could say that we want to have a purchase order from here. So go into the same form type. Now I'm going to add another vendor just as we go. So I'm going to add the vendor as we go. I'm going to say now I want to buy from Gibson USA. Again hopefully I'm spelling these properly. I'm going to say tab. Add the vendor as we go. If it's a large vendor that we're doing a lot of business with we might want more detail on the vendor. So we might want to do a more complex setup to get the address and all that kind of stuff. But I'm just going to do a quick add for the purposes of our practice problem. We're going to say this happens on 112 as well. And so we're going to say Gibson ship to here we're requesting a new item. I don't think I have a do I have a GI you yeah we do a GI USA Gibson USA is what we want. Then we're going to order three of them at $304 that's the cost not the sales price. No customer will deal with the customer field later that comes out to 912. Once again no transaction related to it. It's just a request for the guitar. So I'm going to do another one as we go. So I'm going to say save and new this time save a new instead of save and close. And let's say we're going to we're going to say this one is from diamond. Do I have diamond head is a new vendor diamond head. I'm going to do a quick add for them. And we're going to say this one also on the 12th we're just ordering all of our guitars. This time we're going to order a ukulele though I think this is a ukulele a diamond head ukulele. I'm just making these up by the way I'm just using random guitars here so this is not the actual price or anything of these items. So 74 72 ukuleles are nice though we got we got three of those that comes out to 72 for the ukuleles. All right let's do another one I'm going to say save and new again save and new and I did I miss belt diamond head diamond diamond. I'm going to keep it as it is here we go we're going to say the next one we're going to also buy another one from Epiphone again who's our major vendor basically. And this will be on the 13th let's say and this one is going to be we want an ELP that's an Epiphone Les Paul and we want 50 of those 400. We're going to buy these specific for another customer we're going to imagine which is going to be Eric music. So now now we have this customer came in and said we want 50 ELP guitars and we're going to say OK we'll order them for you specifically. So now we have a customer that we hope to sell to and we're now going to our vendor Epiphone ordering these guitars specifically for them. I'm going to add the customer in the purchase order even though the vendor doesn't need that this is not information for the vendor. It's for us to track so that when I get the receipt of these 50 guitars I can turn around and make an invoice with it. So I'm going to say this is going to be for Eric music. I don't think I have that yet. So I'm going to add a customer it's going to be Eric music which is just a generic name. Can I spell something right in this practice problem. Eric music will just keep it at that. Now clearly if it was a new customer we would probably want more detail about their information so we can contact them their phone number their address or what not. Send them our mailing letter and whatnot. But I'm just going to do the minimum for our practice problem to link out these forms. And so we're also going to say he wants it and an EPS H which is an Epiphone semi hollow body 10 of those which I'm also going to track to Eric music. That's so the new thing here is we've got that customer field populated. Okay so let's do another one now. I'm going to say save a new again save a new this one is going to be for Gibson guitar again Gibson guitar. And we'll bring it on down and say that this one's going to be a new item. So now we're going to add the inventory item on the fly as we go here. So I have never ordered this particular guitar before I don't have it set up in the item list. We could go to the item list and set it up here but I'm just going to set the new item up as we go. So I'm going to say new and it's going to be an inventory part the item I'm going to call it a GSB tab tab tab. The description is going to be a Gibson GSG a Gibson SG. I'm just going to call it. Okay. Gibson SG is going to be for 590 cost 598 cost a good sold will be the expense account when we hit when we enter an invoice or sales receipt. The preferred vendor we could say is Gibson and then it's going to be sale and we're going to sell it for 777. We're going to say 777 sales price. It's going to be a taxable item. And then we're going to say it's going to go to our sales account when we create an invoice or sales receipt making the sales document inventory is going to be tracked in inventory. I'm not going to put up a minimum reorder point. That's when that'll tell us or Warner's when it's getting low the amount on hand. We don't have any on hand right now. It's the first time we bought them total value as of date. So I think that's good. We'll just keep it there and say OK. And then hold on a second. I put a bison. I'd be in. Am I going to I have to fix that. So I'm going to go to the list drop down item list and let's just go into this item and double click on it. And it should be a G here. It should be a G right. A G for crying out loud. You got to fix something. Don't you. I'll just keep. I'll just keep that. I'm going to say close. OK. Back to the purchase order. So let's put it in here again. And I think it should populate properly but I already have it. So there's a G. OK. So let's how many of those we want. We're going to want 10 of those. We're going to say and this is going to be bought for a specific customer again. Let's just add the new customer. It's going to be music stuff store which is a very generic name. I know but hope and so we'll set it up quick setup. So there it is. So that looks good. So let's save it and close it finally. And yes I see. I'm just going to add OK. So then if I go to the home page we expect we bought all these guitars or we're ordered them. We haven't bought them yet. We haven't paid for them. We expect hopefully they're going to come into our store our location with a bill attached to them and then we'll enter the bill when we receive them. That's going to be the next link in the chain here. When we get the box of guitars we can count them. We can see if they tie out to the purchase order. We might have some internal control checks if we have a warehouse so that they can count the amount that they receive. And then we can and not tell them how much the purchase order was right. And we can then tie it to the purchase order to see if everything links up properly and so on. And so if if I go to then the vendor the the vendor center now I can look at these purchase orders by people that we purchase from. So here's Diamond. I think there should be a D there but Diamondhead and so we've got the purchase order here. We've got Epiphone with the purchase order Gibson and so on. We can also look at the transactions and the purchase orders. We can sort those that are open. They're all open at this point in time. And as we receive these guitars in the future we can locate those items here and see and tie them out to the purchase order. We can tie them out to here or we can just basically say we're going to enter the bill. And basically when we type in any of those particular vendors it'll it'll ask us if we want to use the purchase order to populate the bill. I'm not going to do that now. We're going to wait. That's what we get to do next time. Don't do it yet. Wait. Hold off. Hold off. That's what we do next time.