 In this presentation, we're going to record a transaction related to salaries expenses. Let's get into it with Intuit's QuickBooks Online. Here we are in our generic not-for-profit company or not-for-profit organization dashboard. We're going to go on over to Excel first to consider what our objective will be. We're going to be in tab five, so we're in the fifth tab here and we're going to have a journal entry related to the salaries. What we're not going to do is be running the payroll through the QuickBooks Online here. The payroll is going to be an added feature. We do have a payroll course if you want to take a look at the payroll course and think about how to set up the payroll. That's a whole course in and of itself. However, we do want to process the payroll and show the transaction so we can see it on the financial statements as well. We're going to enter it into the system. It's kind of like just a simple journal entry type of process here. Remember, when you're thinking about payroll, you may run it through QuickBooks or you may have an external payroll provider such as an ADP or a Paychecks, in which case they might help you with the payroll. You take that information, you need to add it or enter it into your system in QuickBooks in some way, shape or form. This would be more similar to that type of process. But again, we're going to simplify the transaction. We're not going to deal with the withholdings and all that kind of stuff. We do have payroll information if you want to look into that with more detail. Again, it's beyond the scope of what we're focusing in on here. So in any case, if we took out all the other kind of stuff with regards to payroll, with regards to removing the payroll taxes and all that kind of thing, payroll would be a very simple and straightforward transaction, typically, which would simply be just like any other for the most part. We would debit the salaries expense and credit the cash. That would be the basic transaction related to payroll. So what's that going to do in the financial statements then, of course, it's going to be decreasing the cash. The other side is going to be going to the expense account, increasing the expense, which would decrease the net income. The effect then on the income statement is going to be the income account or the expense accounts going up on the statement of cash flows, which is going to be decreasing the net income. Now, we're going to have to break that out. You'll notice that we are recording the income statement in two different fashions here on the expense side of things. We have it recorded by function, what we're using these items for public health, community service, managerial, general and fundraising. We also need to know what it's going to be used for. So that's going to be the nature. We'll call it the nature versus the function or use of it. So the nature is going to be things like we would expect the rent expense, the salaries expense and so on and so forth. So what we want to do that is use our classes to enter the information and how it normally would be by nature by assigning an account to it and then using the classes for the function, which will assign out the functions. We will assign out the functions typically with this kind of percentage breakout, the 40, 20, 20, 20, we're actually going to do that at the end. However, and this will make things a little bit easier in some cases, because you'll actually be able to enter the data input and not have to do this breakout, which is a little bit more difficult to do every time you enter something in the system. We will not assign a class to it so that it will then be unclassified. And then periodically at the end of the month, we'll do this at the end of our problem at the end of the month or week, you can go into those unclassified areas in the profit and loss by class and simply then break them out all at the same time so that you can break your tasks down to, you know, this is what me paying the bills. This is me reclassifying everything, which is a little bit more specialized and therefore easier to do time one at a time. So let's think about that then. First, we're going to go to our journal entry. So we're going to go to our journal entry over here and let's open up then our QuickBooks file. So we're going to open up QuickBooks file. I'm going to select the new button up top and we're simply going to go to the vendor side. We can either enter a check or an expense. I'm simply going to enter it as an expense. We're imagining basically this being our full payroll in one transaction as well. So note that it could be multiple payroll, multiple people that were paying here again. We're not going to get into all that, but would like our other kind of transactions there might be multiple employees and you might have multiple, you know, similar kind of payroll check processes that would be going through, but they would look similar in nature. Now the payee, I'm just going to call it employee one. So we're going to say employee one, employee one, I'm going to say tab. We're going to set that up. And now I'm just going to set it up as a vendor. I'm not going to set them up as an employee and note that if you were not running payroll through QuickBooks online, but rather doing it through a third party, like an ADP or a paychecks, you may want to do it that way because that will be less confusion. You could still track the payroll by basically the person, by vendor, by that payroll item without having to mess up kind of the payroll, the naming of the payroll. Then when you add the payroll, you can, you could do it all at one, at one point in time. So that might be a way to go in any case. So I'm going to say add it as a vendor. This is going to be going to out of the checking account. So make sure it's going to be leaving the checking account. We're going to put the date here as of January 6th. So I'm going to say one, oh, six, two, zero on the date, the payment method. I'm going to say it's an electronic transfer. So I'm going to just say cash here and then tab, tab, tab, tab. And then we have the category down below. So the category is going to be our account. It's going to be an expense account for wages. So let's take a look at wages or like payroll, salary, wages. That's the one, that's the one, that's the one we want. And then the amount, if I go back on over to Excel, it's going to be for the 209, 460. So 209, 460. You are probably noticing now that I'm typing in the incorrect number. I put 206 instead of the 209. Note that I am going to keep it at the 206 right now. We're going to work through the problem with the 206. And at the end of this problem, we will then change it to the correct number, which is this number, the 209, 460. So you can either put the 209, 460 in here now, or you can go with the 206. And then at the end of the presentation, we're going to drill back into it from the financial statements and show how we can change the expense report at a later point in time. And not billable customer project. I'm not going to assign it to a customer and project. We do want now the class note. Again, this is the one where we're going to be breaking out expenses. We're going to break out. So what I'm going to do is I'm actually going to leave it as unclassified here, and then we'll go back in and classify those out in accordance with our percentages. And that'll make it a little bit faster, a little bit easier. So what's this going to do when we record it? Well, it's an expense, which is kind of like a check form, decreasing the checking account, the other side, then going to the expense of salaries and wages. When we run the profit and loss by class, it's going to have a new account or another column saying unclassified. You haven't done this one yet. And then we'll do that at a later point in time. So let's go ahead and save that save and close and let's check it out. And notice it says, hey, you didn't assign a class field because we told it to tell us when we didn't do that. And we're going to say, yeah, I know that's OK. I planned it this time, planned not to have that. And then we're going to go to the reports. Open up the reports. And then we're going to go into the balance sheet. Let's open up the good old balance sheet up top and change the dates. We're going to make those dates one, one, two, zero to twelve, thirty one, two, zero January through December, two thousand twenty. Run that report. Then I'm going to duplicate this tab by hovering over the tab up top, right clicking on it and duplicating it back to the tab to the left. Let's do the same thing with the income statement, the P and L, the profit and loss. So we're going to open up the reports down here and scroll on down to that P and L. I'm just going to look at the standard one this time. We're going to open up the standard P and L, the standard profit and loss, the standard income statement. Then we'll change the dates up top. It's going from January. It's already on January. I don't need to change that one to twelve, thirty one, two, zero. And then I'm going to go ahead and run that report. Let's close up the old hamburger, hold down control and scroll up just a bit to get it up to that one, two, five percent. That's where I like it to be. And then if I scroll down in the expenses, there's the expense here. So we have the rent and lease. I'm sure we're looking at this one, though. The 206, 460 is the salaries and wages. Now, if we were to see this by class, if I go up top and say, OK, let's take a look at our thing by classes and then we'll break that out and say, run that report. What's that going to look like then? What's that going to do? You might ask. And if we go down here, here's the salaries and wages. It's going to go into, if I go to the right, this not specified area. So they change it's not unclassified. It's not specified. So that means it's a little, I used to call it unclassified, but in any case, there it is. And then what we're going to do at the end of the day is go into this item at the end of the month and then go into the item again. And we'll just drill down everything that is unclassified and reclassified. And we will reclassify it in accordance with the percentages that we have determined that should be classified by, which in our case will be 40, 20, 20, 20. So we'll do that all at one time. And again, if you break up your tasks, I think it'll be a little bit easier to do to say, hey, this is the recording of the expense and then go back in. And this is the reallocation of the expense. So then I'm going to close this back up, close that, scroll up top, scroll back up top, go back to our report. So there it is. And now I'm going to copy this tab hovering over the tab up top, right click and duplicate this tab. The other side, of course, is on the balance sheet. It will be decreasing the cash count, closing up the hamburger up top. It's going to be decreasing the checking account. So decreased the checking account, which is now negative, because we never deposited these undeposited funds. So don't let that throw you off. We still got cash. We just didn't make the deposit thing here. But in any case, there's the other side. Going back up top, we're going to go back to our reports again. Let's go back to the first tab. Now we're on the first tab. This is where we're going to do stuff. So balance sheet P&L, first tab is where we do stuff. And now the next stuff we're going to do is if we go back over to the Excel and go to the right, then we're going to say this other one is accrued salaries. So 3B says we then had salaries paid and salaries accrued. So these are salaries that have accumulated that we have not yet paid. And we're just going to record a journal entry for it. And this might be something like an adjusting entry that you can kind of imagine having on here. So we're going to have to record the expense and meaning an adjusting entry, meaning at the end of the period, at the end of the cutoff date, let's say the payroll is paid every week. And you had the cutoff date at the end of the month was on the 31st. And you and so and the 31st was on a Wednesday. So that means there's been three days that you had expenses and you hadn't yet paid it yet. So to be correct on a cruel basis, you would need to basically record the expenses and a payable. And that's in essence what we're going to be doing here. So this would typically be an adjusting entry, typically done with a journal entry. So let's do that. I'm going to go back on over and say, all right, what if we had to do an adjusting entry, like a journal entry? Well, then we can go to the hamburger up top and we're going to go down to actually, let's just go to our new. So then we'll say new and then we want a journal entry. So it's in the other and then journal entry, other and journal entry. Then I'm going to hold down control and scroll down a bit to like the 100. Now, this would typically be at the end of the month or the end of the period. So I'm going to put the date as of 013120. This would typically be an adjusting entry at the cutoff date. The debit's going to be to that salaries and wages. So I'm going to select the dropdown and we're going to pick up the salaries and wages, salaries and wages. And then that's going to be the debit and the debit amount then for 16, 8, 16, 8, 16, 8. And this is going to be, I would say, an adjusting entry. And then we don't need that. And then and then we're going to assign the classes. Same thing with the classes. We'll keep it unclassified and then assign classes later. And then the other side is going to go to a payable account, which is a liability account. We call it salaries payable. Let's keep it there. So I'm going to say we need a new account. Salaries, I could, I could type it in there and see if it then populates. My computer was freezing there. Hold on a second. So we're going to say salaries payable, payable, tap, got it. Did it. And then we're going to set that up as a current liability account. So this is going to be an other current liability type of account. And on the, on the dropdown here, this, I'll just make it other current liability here, salaries payable is the name that looks good. We're going to say save and close. And then that is going to be the accredited of the 16, eight, no class. Once again, this is a balance sheet account. The classes don't really help us on the balance sheet accounts, because there's no balance sheet by class typically. So, so that's what we have there. So we're going to then say save and close. Let's say save and close and check that one out. Now we didn't assign to classes and saying, Hey, you didn't assign to classes. I'm paraphrasing. It's talking to me. That's I'm paraphrasing what it's saying. And I'm going to say that's okay. Quick, quick start line. Thanks for letting me know I did that on purpose. And then we're going to go back to the balance sheet and check this one out. So we will update the balance sheet. I'm going to cool down control and scroll back up a bit back to that one, two, five, and then we'll, we'll run this report again. And then in the current liability section, we should say, we should see the salaries payable, which we do. We can, we do see it right there. I do. I see it right there. And there's the salaries payable. All right. Journal entry format. And if we scroll back up top, I'm going to go back to our reports. Let's take a look at at the P and L, the profit and loss. Taking a look at the profit loss, closing up the old hamburger. I'm going to run the report again, refreshing the report. Make sure it's fresh. I only work with fresh reports here. And then we're going to say that this is going to be in the expenses. So it's in the wages expense. Also uncategories. So now in salaries and wages, we have these two amounts that have been posted to it, one being the adjusting entry and the other being that expense form that we put in place. And here's the total amount for it. Going to go back up. Going to go back to our report. I'm going to jump over to the balance sheet again. Now note that what if what would happen if you enter something in there incorrectly need to change it, it is possible to change in adjustment within QuickBooks Online. Now I was expecting I wanted to put this information into the system for that one check that we wrote should have been in there for the 109 460. I don't think that's what I put it in there for. So we have the opportunity then to make an adjustment and see how you could do that within the system. So if we go back over, what I'm going to do is I'm going to go into the checking account. I'm going to find that check. The easiest way for me to do that is really to drill back down on it from financial statements, such as the balance sheet. So within the balance sheet, I'm going to go into this 16,000 something. There's going to be our check. There's the check or expense that we wrote for the 206. I believe it should be 209. So I'm going to click on that again and go into that information. And I think it should be 209 460. So let's go ahead and adjust it. I'm going to hold down control, scroll down to get to 100%. You typically want to be at 100% when working with the documents. I'm then going to change this to 209. 209. And then I'm going to say save and close. And then yes, that's fine. And that should record our information properly again. So I'm going to then go back to the balance sheet. I'm going to do so by opening up the hamburger, going down to the reports. And then going down to that balance sheet reports. So if I go into the balance sheet then and run that report, I'm in 2020. I'll keep it here for, I'll keep it here since that looks good to me. I'm going to hold up control, hold down control and scroll up to 125. And then we're going to go down to our checking account. So within our checking account, now we're at that 1970, 60 opening that up. That shows then our detail here at the 209. So the 209 460 now matching the 209 460 here on our Excel worksheet. Minimizing this back out, scrolling back up. Going back to our reports. Now we can also have that on the P and L. So if we go back on over to our P and L, here's our profit and loss by class. And here's going to be our new number for wages in there, the 226, 260. If I select that item, and then we have the 209 460 here. I'm going to scroll back up, going to go back to our report. And that's going to be it for now. Let's get out of here.