 QuickBooks Online 2023, invoice selling inventory. Get ready to start moving on up with QuickBooks Online 2023. Here we are in our Get Great Guitars practice file. We started up in a prior presentation using the 30-day free trial. We also have the free QuickBooks Online sample company open. If you want these two things open at the same time, we suggest using the incognito window or another browser. You can open the incognito window if using Google Chrome by selecting the three dots in the browser and picking the incognito window, then searching in the search engine for QuickBooks Online Test Drive. We're going to be using the sample company to compare and contrast the accountant view, which is the view that the Get Great Guitars file is in and the business view, the view the sample company is in. You can change between the two views by going to the cog dropdown up top and switching the view on down below. We're going to be opening a couple tabs to put our reports in. As we do every time, we're going to duplicate the tab by right-clicking on it and duplicate it. Right-click on the duplicated tab to duplicate it again. Back to the tab to the middle as the tab to the right is thinking reports on the left-hand side, opening up the balance sheet report, one of the favorites. If you're in the other view, the business view, by the way, the reports are located in the business overview and then the reports, and that's where they are there. Let's go to the tab to the right. 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 and then 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. Right now, go to the reports at the bottom and open up the P to the L, the profit and the loss. Otherwise, known as the income statement, claim or close the hamburger and change the range from 010123, tab 123123, tab, run it to refresh it, nothing's in it yet, but we're getting there. Stuff's gonna happen here this time. This is when, this is a big moment. We're gonna go to the tab to the middle and then close the booger again and change the range from 010123 to 123123, run it to refresh it. That's the setup process we do every time. In prior presentations, we set up the new company file, we put our beginning balances in place, we set up our service items, our inventory items, our chart of accounts, and then we've entered transactions common to starting a business, financing the business by taking out a loan and putting our personal money into the checking account to build the capital so that we can then buy stuff which means we bought, for example, the furniture and equipment that we're gonna use, that's an investment in the business to generate revenue in the future and we put money into the inventory assets. Now, finally, we can start selling stuff. So people coming in to the shop and this is where it happens here. So now we're gonna have an invoice for the sale of inventory. So I'm gonna go back to the tab to the left, note that everything's set up to make the inventory or the invoice as easy as possible or a sales receipt as easy as possible was that we went down to the, if I go into the sales item, you'll recall that we set up our products and services and we've got our items nice and set up. So now when we enter the sales transactions, you want to imagine it to be as easy as possible, for example, so that like a check register person can be at a check register and just you bring something up to them and they could just record it or even you can scan it yourself even though the transaction is actually quite complex, especially if you're tracking inventory as we will see. And we know that that tab, if I was using the business view, by the way, if I go on over here was under the get paid and paid tab products and services, there's our products and services. So now we're gonna make a sale. So I'm gonna go up top and go to the new button to make the sale. We use the invoice if we're making the sale on account, that's gonna be common for businesses like the bookkeeping businesses, a law firm landscaping, we do the work and then we're gonna collect the money with the receive payment in the future as opposed to a situation where you get paid at the same time at like a cash register, for example, that might be in a store and a restaurant in a food truck. Notice that that's the other way that we might get money on the customer side of things, the customer cycle is we might have the deposit form that we just record as the sales. Note that if that was the case, you'd be in an industry that's gonna be more simplified of an industry. Typically you get paid by like YouTube or you get paid through a gig economy, some platform is paying you, then you might use bank feeds, for example, and just record the deposit form and record that to income. You're gonna lose a little bit of the richness of the reporting that way because the deposit form isn't really designed to be the sales forms as the invoices and sales receipts are, they don't have the things like the service items related to them, but they work quite well if you're in that kind of business where you could just record revenue as you get the deposit. So it depends on the industry. Here we're gonna go to the invoice, imagining that we're gonna enter an invoice. We wanna do the invoice related to the sale of an inventory item because that's gonna be the more complex type of invoice. So up top we've got the client or the customer, I'm gonna say Anderson. We already have Anderson here so you could start typing it in, then it'll populate or you can add it up top. Tab and everything populates so that looks good. So we've got the email address which is commonly necessary if we're gonna be emailing which more and more is common if you're in a situation where you're sending out the invoices. We've got the billing address, the terms. We set our standard terms to be net 30. Remember that you can change the terms for an individual customer and you could set basically your standard terms. That means that we want to be paid within 30 days of the issuance of the invoice which I'm gonna say is on the 16th. So we issue the invoice on the 16th we'll say and that means the due date will be 30 days later February 15th, 2023. The invoice number populates automatically so that's good. We've got the location of the sale which is gonna be standard and necessary because that's gonna be used to calculate the sales tax. So it's picking up our store location that we set up by default. We're not gonna be adding any tags and then down below we've got the products that we're going to be selling. So let's add our items. So we have them set up already. We're just gonna imagine they come up to the check register or something or they're gonna tell us what they're gonna want. We'll populate the invoice an ELP and so we're gonna say ELP tab, description populates. We're gonna say that there's five. Notice it gives us a nice little thing, quantity on hand and quantity on purchase order. So I'm gonna say that we want the five of these and then the rate is gonna be 500. That's gonna give us the 2,500. It is taxable. We set that up when we set up the item. Now the tax is gonna be applied, that tax being the sales tax, the usage tax. And then an EPR, we're gonna want tab and that one is gonna be, we'll just say one of those 550 and that one didn't populate as taxable. I'm gonna check that it should be a taxable item. I'm gonna check my items over here. Okay, so it should be set up as a taxable item. Okay, and then the next one's gonna be an EPSH and we'll populate that one. And we're just gonna say that we want one of those. So that looks good, okay? So that looks good. So that comes out to the 3,450. Then we have the sales tax, which is populating by location and we put our location in California in Beverly Hills for the practice problem. That's where it's calculating then the sales tax. You can adjust the sales tax if you needed to for whatever reason by going in here and you can override the sales tax. So it's populating, you can see the detail in here, you can override it, you have to give it a reason. I'm gonna close this out and say, hold on a sec, do you want to leave without saving? I'm gonna say no, let's close it out this way and then say yes, I wanna leave. And then I also have included this 5% rate. Now I'm gonna use the 5% rate to have just a generic problem for the sales tax. That's the idea. You can change it here if you added that 5% rate or you can change it here by adjusting the math if you wanna match up with our practice problem. I'm gonna right click on the tab to the right, just to show you the sales tax tab and see where you can add that information so you can go to the taxes on the left hand side. I believe it's the same under the business view and then you've got your sales tax tab up top and then you can set up your sales tax settings and I set up this other rate down here at just the 5% as another option so it'll be my generic 5% tab. Okay, closing that out back to the tab to the left. What's this gonna do? It's actually fairly complex of a transaction even though the data input's fairly easy. It's gonna increase the accounts receivable because it's an invoice. The other side's gonna go to sales. It's gonna increase the accounts receivable for the full amount by the way, plus the sales tax. The other side's gonna go to sales driven by the items which are telling it which income account to go to but it's only gonna go up by the 3,450, the amount we charged, the sales tax which we're imagining isn't us charging therefore not income but we're just a tax collector. That's actually the tax from the state local government to the customers. That's gonna go to a payable account for the sales tax and there's gonna be a decrease in the inventory driven by the items we sold and cost of goods sold, the expense account for us consuming the inventory is gonna go up for amounts, decrease of the inventory, increase in our cost of goods sold that aren't on the invoice but known by the system because we put them in place with the items. So the impact on the income statement, increase to income, 3,450, minus the increase in cost of goods sold which we don't see on the invoice because it's driven by the items. We'll check it out when we record it. Also, there's gonna be the sub ledger for the accounts receivable impacted for Anderson guitars which will be tracking by customer and the sub ledger for inventory will go down in terms of units as well as dollar amounts. So actually a lot going on we could add a message down here we can have an attachment if we need we can cancel clear, we can print preview let's do that, let's print preview the report because oftentimes we'll email it. So this is a report if you're doing invoices that a client will see so you might wanna customize it this is a customizable invoice so we might go into those options to do that later to make it look nice because it's not just an internal data input form and then you can make it reoccurring you can customize here and then you've got your more options to copy, void, delete, transaction journal and so on. So let's go ahead and save and close I'm gonna hit the rise up or the drop down save it and close it and check it out. So if I go to the tab to the right the balance sheet and run it we should have an increase to accounts receivable that's what an invoice does let's go into that and check it out. There it is, there's the 3622 if I go into that drilling down to the source document that's for the full amount, 362250 that looks good, scroll in back up I'm gonna close up the invoice and go back to my form the other side's on the income statement to the profit and loss, run it finally activity has happened there's our sales note that the sales is on the books for they give us three line items there were three line items on the invoice but the total 3450 does not include the sales tax so they put it on line item by line item and the sales tax is not included where does the sales tax go to be in balance closing this back out back to our income statement that's gonna be on the balance sheet back to the balance sheet and then we go down to the liabilities we should have a payable they put it into the California department because it's going into that's the vendor that we pay for the sales tax and that could help you instead of just putting it into a generic sales tax payable account if you had multiple sales taxes that you're gonna pay because it's gonna break it out by department instead of what you would expect which would be like sales tax payable but we're gonna go in there and there it is there's the sales tax being calculated and that is that 172 that we put on the generic sales tax item it's only one line item because we did the generic tax if you did the California tax that might break it out into three line items because you're actually paying three different kind of for three different kind of things state, local and whatever and so then I'm gonna go back and then inventory also impacted so if I go up to inventory that's gonna go down so if I go into that you can see this one invoice had four line items related to it because there's multiple line items on the invoice if I scroll down a little bit more and go into one of those you can see that that 1600 for example that amounts not here because it's going down by by it's going down by the cost not by the sales price this is the sales price so I'm gonna close this back out also note that you might say hey look there's three line items here and there's four and there's like four line items here and I believe that's due in part to the fact that they're using a tracking of first and first out for the flow assumptions and so possibly due to layers on the flow assumptions you might end up with different levels here versus what's on the line items on the invoices I believe is what's going on with that so let's go back up I'm gonna go back up and back and then the other sides on the profit and loss report and the cost of good sold representing the expense of us consuming the inventory when we used it to generate revenue so we're matching the time period this isn't when we paid for it necessarily it's when we used it when we sold it so we're gonna go into that and there is the other side for the cost of good sold so then the impact on the profit and loss we can see clearly because this is the one only transaction we have sales went up by the sales price cost of good sold the expense went up by the cost of the goods that we sold gross profit is the difference between the two now also what's impacted if I go back to the tab to the left we've got the accounts receivable also needs to be broken out not by just the date of the transaction but by who owes us the money we can see that in report form and we can see it in the detail on the left hand side when we track our customers so let's go to the tab to the right right click on it and duplicate the tab and look at it first in report form so we're gonna go to the reports on the left hand side which we've seen in the past and then I'm gonna scroll down a bit and we're gonna go down to the AR who owes you and we can look at a couple of these but a common one is the accounts receivable aging summary let's look at that one and change the range or just the date 12, 31, 2, 3 run it and it breaks out the dates here because I put it at the end of the year that's why it's all over 90 but the point is we've got the people that owe us money broken out in that format and then the total ties out to the 24, 122, 50 that's what should be on the balance 24, 122, 50 now in practice we're gonna have to collect on that receivable so we're often gonna go internally tab to the left into the sales tab on the left hand side and then we're gonna be tracking this information by going to the sales tab and then we might go into the customers and then closing the hamburger and we can look at our customers we can look at our invoices up top and look at the open invoices this way that will show us our customers that have open invoices this one has two of them for Anderson I can go into Anderson there's our open invoices and then we might also go into our sales tab over here and then look at the all sales up top and we can search in here as well sorting our sales transactions note that if you're in the business view these are in a different little bit different location they're kind of separated if we were on the get paid and paid area that's where your customers are and then if you were in the bookkeeping area that's when you can go into your transactions up top where we saw the expenses before now we're on the all sales transactions they kind of put those side by side in a little bit different fashion on the business view but once in here we can then say okay now we can sort our transactions they got some sorting options up top so we've got for example open invoices I can select that item and there's our open invoices you see the dropdown we got all invoices here you can also sort for it this way all invoices and we've got those invoices here that were set up when we set up the beginning balances and this is the invoices that we created now we would expect the next thing to happen is we receive payment we'll go into the receive payment in a future presentation and obviously when we're communicating with the client we're gonna have the receive payment and we might then send them reminders or statements about the open invoices that they have that we could set up to do periodically okay let's do another one so we're gonna go back on over and say let's do another one let's hit the plus button up top make another invoice this one I'm gonna say is gonna go for Jones guitars which I think we already have a client we're a customer for Jones guitars so it's set up good to go we're gonna got the email address and so that looks good billing and we're gonna have the terms of 30 days that looks good let's set the date let's move the date up like a day here I'm just gonna hit the plus button so that that moves it up a day so that's like a little bit of a quick way to do that we've got the invoice number populating automatically the sales location populating which will help us to calculate the sales tax generally no tax that we're gonna be adding and then I'm just gonna type in what they're purchasing they're gonna be buying a G I U S A and so that's a Gibson USA we're gonna say the quantity we'll just keep it at one so we're gonna say there it is and then that's good and it should be taxable so it is a taxable item so I'm gonna say okay and then we've got a ELP so I'm gonna say ELP and that's gonna be an epiphone less Paul so that looks good so we'll say that one and so that's gonna be an epiphone we're gonna say we want eight of those I'm gonna say eight of those it is a taxable item so that looks good and so that puts us at 4,380 and then I'm gonna change the sales tax for the generic problem to be to be the 5% so we'll change it to the 5% to make it generic you can change it there or you can change the math here if you just wanna work work and make it kind of a generic 5% for practice problem purposes okay so that what's this gonna do same thing let's just let's just recite it again it's an invoice that means the council receivable is gonna go up by the full amount including sales tax 4,599 the other side then is gonna go to revenue but only by the 4,380 on the income statement because that's what we charged the difference is sales tax 219 it's not on the income statement because in theory we didn't charge them that amount by the way the expense is also not on the income statement you can imagine a system where we charged the 219 as income and then expense when we pay the expense that would be kind of like if we were if it was part of our business but we're trying to imagine that we're just a tax collector and therefore the income's not hitting and therefore we have no expense related to it as well it's just go into a payable account it's a balance sheet item not going through the income statement increase in the payable by the 219 also inventory's going down by an amount not on the invoice but driven by the items and cost of goods sold the expense related to us selling the inventory is going up the net impact on the income statement will be the increase in the sales price minus the cost of goods sold and the accounts receivable sub ledger will track the accounts receivable by customer not just by dollar amount and the sub ledger for inventory will track inventory on a perpetual basis by unit not just by dollar amount so a lot going on actually quite complex we're going to save it and close it and check it out so now let's go to the tab to the right to check it out and we're going to we're going to run it up top run it running I don't think I looked at the inventory report last time we'll look at it this time accounts receivable has been changed so there's Jones Jones is on there that looks good that amount four thousand five ninety nine is the full amount including the sales tax closing that back out back to the balance sheet other sides on the income statement tab to the right run it to refresh it income sales has gone up now it's going up it put multiple line items to increase it because we have multiple line items notice the prices though four thousand three and three eighty do not include the sales tax of the two nineteen so we're out of balance by the sales tax where does that go double entry accounting system has to be in balance back to the report it's going to be back on the balance sheet in the liability section and this is the tax we're collecting for our trustee California Department of Administration basically sales tax payable there it is there's the dip for rents on that one but we're not done yet we're not done yet going back we also have inventory going down because we're tracking it on a perpetual system not a not a periodic one not a periodic one inventory let's go into that one it's going down multiple line items tracking the inventory for three oh oh one it's going down by amounts here three thousand two hundred three oh four that aren't actually on the invoice but driven by the items the system knows what they are just like when you check out something on the grocery store and you don't know how much they paid for it but the system does and it records it in a perpetual inventory system even though you're just simply running the thing across scanner and then the other side is going to the income statement and the cost of the goods that are sold expensing them as we're selling them matching in accordance with the accrual matching principle at the same time so there we have it so let's close that out also that's not all that's not all the net impact on net income is the income minus the cost of goods sold if I go back to the balance sheet we've got to the A to the R needs to be broken out also by uh... by customer which we could see in report form on the sub ledger updating the sub ledger we ran last time it's now at twenty eight uh... seven twenty one we owe we are owed money by anderson jones and smith guitars for that twenty eight seven twenty one that should tie out to the balance sheet twenty eight seven twenty one also if i go to the top of the left and track this internally i can look at my sales items i now have five open invoices that i can expect to receive payment on in the future if i look at this in terms of customers sales tab customers then i can look for the open invoices by customer and so now we've got that way to that way to see it as well and so i could go into jones guitars and say i expect payments from jones guitars here we can send them statements and whatnot if we so choose let's also look at the inventory this inventory should have a sub ledger breaking out by unit let's go to the tab to the right right click on it duplicate that tab and then go to the reports on the left hand side the reports and then we're going to go into let's just type in inventory inventory valuation summary change the date to twelve thirty one two three run it and so now we've got the unit item the items and the quantity and then the dollar amount forty thousand six seven six that should tie out to what's on the balance sheet and their forty thousand six seven six looks good now obviously the invoice would be a lot more simplistic if you just had a service item and no sales tax right but when you get into the tracking inventory perpetually and have the sales tax then there's quite a lot of action going on with the invoices actually a lot a lot happen you gotta make sure it's set up properly to have it all working systematically let's take a look at our trial balance now to see where we stand i'm gonna go to the tab to the right duplicated right click to duplicate it got a lot of action going on up top let's go to the reports on the left and type in trustee trial balance the trustee tb not tuberculosis trial balance we're gonna change the range of one oh one two three twelve thirty one two three twelve thirty one two three run it to refresh it and so this is where we stand at this point if you're following along in your matching out great if not try changing the date range it's often a date range issue if you see numbers change when you change the range drill down on that changed range change dollar amount and then see if you could possibly change the date which you gotta be careful of in practice but works well for a practice problem and uh... and then we'll we'll also do a report by transaction report at the end of entering the first month of data input to further drill down on any differences