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up top and duplicating the tab and the new tab I'm gonna right-click on it again duplicate again gonna go back to the tab in the middle so it should be done thinking at this point so I can easily go into the accounts drop-down reports and then go into the balance sheet as it's thinking I'm gonna go to the tab to the right and do the same thing accounting drop-down reports but this time the income statement or profit and loss the major two reports as it's thinking gonna go back to the middle change the date on this one so I want to make this one as of the end of 22 so 12 31 20 now oftentimes that'll refresh updating it automatically if you're working real time but of course we're working in a demo file therefore we're gonna have to customize the dates from time to time so let's go back to the first tab now and we talked last time about in essence the cash outflow process the expenses cycle the vendor cycle the purchases cycle and we looked at a flow chart which is not in zero it's actually a quick books desktop flow chart but just to visualize the flow of the money going out remember when we're talking about the purchases of goods and services or possibly inventory at the end of the cycle whatever the cycle is we would expect money to be going out that might happen by us simply writing a check or decreasing the the checking account using the data entry to just decrease the checking account right when we get the bill and we might do that with the bank feeds or we might have more of an accrual process typically done by larger companies entering the bill when we receive it which increases accounts payable and then we're gonna pay off the bill with in essence a check type form decrease in the checking account and then to complicate matters a little bit if we have inventory we may have a purchase order requesting inventory but not paying for it or receiving it yet and then receive the inventory and enter the bill at that point so if we go back in then and say okay well what's going to be the process of us tracking the bills now note if I hit the plus button the first type of transaction where we just pay things off as they happen possibly with electronic transfers would just be with the spend money form which might be like a check form this is the kind of form I'm gonna hit the checking account usually the money would come out of the checking account this would be the type of form that would just be decreasing in essence the the checking account and we can assign we can assign it to the account down below and if it's inventory we can have an item here this is also the form that if they're electronic transfers you might be generating with the use of bank feeds for example but it becomes a little bit more complex if we're entering the bill so if I'm entering a bill type of form opening up a bill then it looks quite similar but now instead of decreasing the checking account this is going to increase a payable account so if we enter a bill that's going to be formatted here if I look at my my balance sheet that's going to be instead of an asset which is usually cash up top going down we would have a liability notice the checking account is current down here because it's over if there's an overdraft on it that's why it's in the liability area but typically accounts payable would then be going up as you enter the bill instead of the checking account going down would be the general idea then we'd have to track the information in the accounts payable and determine when we want to pay it now where in practice normally we'd go back to the first tab we would normally go into something like the accounting drop down I'm sorry the business drop down and then we can go into the pay paid to bills so this will help us to kind of sort the outstanding bills that we have so you got your drop downs up top or your information up top the tabs up top we could call them all we've got the drafts if there's any drafts that are in place the awaiting approval items so within the the process of entering the bills you might have a system where you're just entering the bills and then you're going to be paying the bills if you have a more complex accounting system then you might have like an approval process of a request and then entering the bills and so on so that you'd have an internal control process they could be a little bit more complex having more people involved in it to try to reduce errors and frauds and then awaiting payment so these are going to be the items that we would most likely be searching for when we're going to try to set up the payments decreasing the accounts payable and paying the bills these are the ones that have been paid so if there are questions about bills that have been paid this is one area we can go oftentimes however the bills that have been paid will be paid by per particular customer or suppliers or vendors so we might also check as we'll see shortly in the contacts drop down and sort this information by suppliers and then we've got the repeating transactions you might have some kind of transactions that are gonna gonna repeat so so you can have like they're gonna be kind of like memorized happen automatically so you've got those items in the repeating transactions if you set them up so let's go back and go into these in a bit more detail if I go to all the items over here you've got your search tool up top which might make it a bit easier to search stuff so Bayside for example will narrow things down so the search field can be useful if you know what you're looking for you can set the date ranges the start and the stop the date type any date the transaction date or the date do so the transaction date when you're talking about a bill when you enter the bill if you got a utility bill for example and when you enter that into the system that might be the transaction date and then you're gonna have a due date which you want to make sure that you're entering into the system when you enter the bill because then you can sort by when those bills are due now clearly a smaller business like I say you might be paying the bills whenever you get the bills but as you get more transactions then it's it becomes useful to try to pay the bill as late as possible because that's gonna be the typical cash management strategy again if you only have like one utility bill and it's like a hundred dollars or something and you pay it 15 days earlier than you otherwise would have if you waited till the last day not gonna affect you too much but if you're talking about many transactions and or very large transactions then the cash management strategy of paying as late as possible becomes more and more of a valuable and material thing to do so then you want to kind of sort in this format so in other words if I enter the bill drop down and I go into a bill when I enter the bill I've got the date of the transaction and the due date the due date is going to be when the bills do and you're probably going to be wanting to sort by the due date so I'm going to go back in close this out and go back into my pay bills area so there is that one and then are you've got some filtering options for the deleted or avoided items so don't show or show so typically if you avoided something or deleted them then you oftentimes don't want to be searching for those unless you're looking for them in particular in which case you can show the deleted and avoided items with this option now like with most softwares there's there's multiple ways you can do different things so you've got the new bill so you can create a new bill up top here you can also enter the bill that's the same thing as going here if you hit the drop down you also have the repeating bill here you've got new credit note and you've got the import bills in this area so you can kind of think of this as the bill kind of center or sorting area and then you can go to your options that are kind of related to what I would call the vendor cycle or the expensive cycle and then you've got your drafts if you have any drafts then you can sort the drafts here awaiting approval if you have an approval process which is usually kind of a more complex type of system adding more internal control items that would have an improve approval process in place so that you reduce the likelihood of fraud and so forth maybe we'll talk about that a little bit more in the future but for now we're just going to go to awaiting payment so these are the ones that are going to be basically outstanding that are looking to be paid so you can sort them searching them this way you've got the start date and end date once again you have the anytime the transaction date the due date and the planned date so the due date and the planned date probably the ones that are going to be useful oftentimes if you find the transactions that you want to be paying if I go into a particular transaction here for example then and you want to pay one this is the amount you can make the payment down here with a little item down below and you've got the date and then you say paid from typically you would think the checking account reference number if applicable and then if it's a check form you can check off the pay by check form so basically this is going to in essence be a decrease to the checking account type of form because you're paying off the accounts payable and it would be decreasing the accounts payable and then decrease in the checking account if there's a check applicable to it then again you can check off the pay by check item here you also have the capacity to see some more history related to this transaction down below and add notes if applicable so I'm not going to enter it right now I'm going to go back to the to the business drop down we're going to go back into the pay bills here and I'm going to go into the awaiting payment note that when you're navigating within a web based software you don't usually want to go up here to the browser and go back you usually want to find how the software has allowed you to navigate you know within the software so using the drop-downs is usually the better way to go so if we go back in here you also if I select multiple items I can hold down like shift and select multiple items at a time and make a payment that way so I know I can select multiple items which can be a quicker way to do it we can also add a planned date so if I add a planned date then I can sort by those planned dates that's another way that can help us with our sorting mechanisms so I'm going to uncheck those items then we have the amounts that have been paid so if I go to the paid ones so now these have have finalized through the transaction so if we're looking for something that had been paid we can go into here sort by date and sort by the date type and so on and then we've got the repeating transactions if we've kind of put transactions that are going to be going in somewhat automatically on a periodic basis now the other way that you might sort for things is is by vendor or by supplier so if you have a question from a particular supplier then you might go into the contacts here and go into the suppliers and then find that particular supplier so if I go down into a supplier and I had a question from ABC furniture for example then I can go into that particular supplier here and we can go into details with relation to it so we have an await a bill awaiting here you got the purchase order awaiting payment and so on so now we've got the detail by supplier that we can go into and sort in this fashion we also have the contact information on the right we have some options for the add to a group merge archive and then we can edit as well so if I go into the editing option we've got the information related to the supplier so contact information now oftentimes if you're just paying like the utility bill then you probably don't need a lot of detail you might just have in essence the name but if you're dealing with a major supplier then you're going to want more information like the business information the addresses the financial details and so on and so forth so I'm going to go back to the contacts note I'm not going to hit the back arrow but instead I'm going to use this cookie trail up top I'm going to be working within the actual platform not by the browser as as much as possible note that that takes me to all contacts so up here and in the tabs up top if I go back into the suppliers now we're back in with the suppliers here so within the suppliers you could set up a new contact so if you enter the new contact up top we have a similar kind of data input screen that we went in with when we went into the edit screen you might be creating new contacts also as you do data input forms on the fly or as you go when we enter say payments as well as bills and possibly purchase orders back to the contacts if I go back to the contacts it takes me to all I'm going to go to the suppliers area which is our focus note to that you can you know select multiple items down below possibly add them to a group you can merge them if necessary you can archive them if you have activity within a particular supplier then you don't usually want to delete it you can't really delete it because you've act you've got act financial activity with them but if they're not useful in the future maybe you want to archive them so that you don't have to see them all the time and your contact information because you're not planning on doing future business with them so I'm going to unselect those the next area that might be important that's related to at the end of the process pain or outflow of cash would be in the business drop down and that would be the purchase orders so the purchase orders would only be applicable if you actually are purchasing inventory and you have the capacity to request inventory before paying for inventory unlike what you typically have to do when you buy stuff online where you pay for it before you receive it so in this case you've got a little bit more leverage they're going to send you the inventory that means the purchase order is only a request so that means that the purchase order is not actually having a financial transactions we have to sort it in some other area and we're sorting it here right so we can now sort our purchase orders when we receive the purchase orders then we can find them here and basically populate possibly a bill with them at that point so we can add a new purchase order we have all the items down below we can search and that will give us the search for within start date so we can set a search in here we've got our drafts so if you have any drafts they're going to be in this tab awaiting approval once again we've got that kind of added step often the case within a purchasing process now the purchase of inventory specifically larger companies are likely to have more of an approval process to kind of have more internal controls to reduce likelihood of fraud and whatnot and then the approved items so we've got the approved items are over here and then the items that have been billed so the general flow of the purchase order would be that you're going to create the purchase order it's going to be approved and then you're going to once receiving the purchase order you imagine the purchase order has been received whatever the thing is that we requested the inventory that we request to be purchased has been received then we can create a bill you know from the purchase order that's when the financial transaction takes place actually increasing the accounts payable to be paid in the future so if I go into a new purchase order if we were requesting the inventory we've got the contact we're going to go into the forms and more detail but we enter the detail here it looks like there should be a financial transaction related to it but there won't be because it's just a request and we haven't got the inventory and then we go through let's go back to the drop down up top and go into the purchase orders so so then we could have a draft it could be a waiting approval once approved now you're imagining that the purchase order has been sent to the supplier once they ship us the goods then we might go into the purchase order and match out what has been received to what was requested and possibly then here we can go into the options up top and possibly copy to possibly a bill right because we might be billing with this with the information in the purchase order so I'm going to close this back out possibly to you have an invoice as well because if it's inventory then we might use that as well to try to bill turn around bill if I purchased it for a particular customer so we'll talk about that more in future presentations so just a quick recap on the balance sheet the end result of the balance sheet when we've got these kind of payments for goods and services that we are purchasing for the business if we buy them with cash possibly just using bank feeds you'd have a decrease to the checking account the other side typically going to the income statement with a right check type form or decrease to the checking account type of form note the checking account is overdrafted that's why it's a liability here you can drill into the checking account by clicking in on it that gives you in essence like a general ledger or some transaction detail on below so you could see here we have the payment types items here the payable payment they're going to be a credit if you're looking in terms of debits and credits and you've got your running balance and your gross and then it gives you your related account which is the accounts payable so this paid off and accounts payable so then these are going to be increases here right and I can go down this paid off the accounts payable from the accounts payable so they're going through the AP so you could scroll down this one went directly from a bank service charge so notice this was a money spent item so if I go into that I can drill down on it and it'll take me back to the source and we'll we'll deal with this a little bit more in the future but notice they use a spend money type of form so this is why using this demo version is quite nice or using any file that's already been constructed because then you can go back and back and drill down into the source document deconstructing now I've told you that in general you want to basically be going back and forth by the items that are inside the website but in this case I'm going to use the back browser here works fairly well oftentimes I'm going to go ahead and go back to the details so here's the actual detail once again and then if I go into this item this item was to pay off an accounts payable pay a payable payment so basically it's still like a check type of form decreasing the check in account but specifically though this form was paying off a accounts payable that means if you want more detail on it you got to go back to the actual bill that was entered which oftentimes you can kind of see linked in here but this one in particular like many of these in the demo file was generated from a repeating transaction the original repeating transaction has been deleted so in any case I'm going to go back with the arrow up top back to our transactions here and then I'm going to go back again so this is going to be our detailed report it's useful to look at these transaction detail reports these source often gives you kind of an indication of what I would call like the data input form that has been put in place the debits and credits if you know debits and credits could be useful increases and decreases and then the other account that is impacted will let you give you an idea of the other account that is going to be impacted there's two accounts at least each time a financial transaction has been put in place so let's go back again so I'm going to go back and then if we enter a bill the other form the other account that will be impacted is the accounts payable so accounts payable is here if I go into the accounts payable then we've got the detail in in essence a general ledger type of format and it's going to be increasing and decreasing with the payables so if I go in for example for a payable invoice I go into the payable invoice it was once again created with a repeating transaction but a bill which was basically input into place increasing the payable now it's a little bit confusing the terminology they use because notice within the system the zero system we're calling a bill as something that someone build us for goods and services that we entered into the system as a bill increasing the accounts payable but in the transaction detail up top you got to be aware of they entered it in here as an invoice so that terminology is getting a little a little muddled up here but you know that you're in accounts payable so that you know that this this is an invoice basically a bill so which way which way is the transaction going bills and invoices depend on which side of the table you are on I'm in accounts payable so they're saying that this payable invoice is basically like a bill so but notice that you get used to these source items they can help indicate you know the form that is being used for the data input and you want to tie the form to the actual transaction and this is the payable payment so now the bill is being paid with this item so if I go into here the bill is being paid once again if I try to go back to the bill it's going to be one of those repeating transaction bills I'm going to go back and go back now note that this accounts payable account gives us the amount I'm going to go back again that we owe to vendors or suppliers in total if I double click on that or if I click or zoom in on it that gives us the GL but meaning like the transaction detail but what I also want to see is who I owe the money to now normally in practice we do that by going over here and we can go to our contact lists and see who we owe the money to and we can track the bill payments but you can also see four of reports so if I right click on the tab up top and duplicate it again and look at subsidiary reports related to accounts payable accounting drop down reports and we can go into then our reports down here the age payable detail the age payable summary are going to be common kind of reports because it'll also give us an aging the billable expenses these are reports that are going to give us detail about the payable let's go into the age payable detail report so open that one up and I want to take a look at the detail for 2020 2022 is that what we were doing so let's do a custom date and let's take it to the end of 2022 let's make it through December 2022 and up date it so now we've got our detail and it breaks it out by how old or past due that's why this report is useful because it gives us a little bit more information that we then we can get from like the lists over here but the bottom line is that the total of this report breaking out by who we owe the money to totals out to 10,291 84 which you would think would tie out as of the same date to here 10,291 84 so that's you want to think about the accounts payable who we owe the money to needs a subsidiary report which is going to give us that same information by who we owe the money to and this report will also give us the added detail of how outstanding those balances are to help give us a feel for that as well in practice we're also going to be using the internal devices tracking the the bills that need to be paid here as well as as tracking the information by contact which would be the suppliers that we who we owe the money to so that's a general overview of the payment cycle at the end of the payment cycle we would expect money going out in some way shape or form for the goods and services either by just issuing the check right off the bat decrease in the checking account or going through the accounts payable tracking the amount that we owe and then paying it at some future point