 QuickBooks Desktop 2023 in voice form. Let's do it within Tuits 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 Sample Rock Castle Construction Practice file provided by QuickBooks going through the setup process we do every time by maximizing the home page. Going to the view dropdown, selecting the open windows list to make sure those are open. I'm going to make this a little bit smaller down here as well. I'm going to go to the reports up top company and financial profit and loss P&L date range change from 010124 to 123124 January to December 2024. I'm going to customize it up top fonts and numbers so I can change the font bringing it up to at 12. Okay. Yes, please. Okay. Let's go to the reports dropdown again company and financial down to the balance sheet standard range change date change 123124 and customize fonts and numbers change the font 12. Okay. Yes. Okay. There's our setup process we do every time going back to the home page and prior presentations. We've been focusing in on the customer cycle, which you can call the sales cycle, the revenue cycle, the accounts receivable cycle where at the end of the day we expect to be paid. We expect money to be going into our checking account for goods and services we provide to customers. Remembering that in real life, we could be a customer of our vendors, but in QuickBooks, the customer are the people that pay us for the goods and services that we provide them. We talked about the general overview of the customer cycle, which could change could differ depending on the type of industry you are in. For example, a very easy industry would be a cash basis, even a step away from the cash basis where we might be dependent on the bag feeds to record transactions such as with gig work. We might have a cash basis where we have to enter the transactions as we make the sales possibly like a food truck or something like that. Or we might have the full service, full accrual basis that we might need tracking the accounts receivable, recording the invoice first for the work that we did and then receiving the payment after that. That's where we're going to start this time with the full service accrual kind of process. Now you might say, why don't you go to the estimate first? We might talk about the estimate a little bit in a future presentation, but that's going to be something that would be there in a special kind of industry like a job cost system where you're going to give the estimate before you do the work. So we're going to start here basically just at the invoice at this point in time. So let's go into an invoice. Notice there's multiple ways you could do that. You could do that from the homepage here. You can also go to the dropdown up top for the customers and go into a create invoice. You can also go to the customer center and create an invoice from the customer center. So many places to get into this particular document. We would open up this document if we're making a sale to a customer that we expect to receive money from in the future. We're going to have to track that and collect from them. So I'm going to go back to a prior invoice. So we go to a prior invoice here. This one looks good. I'm going to close up the carrot for now and just review the invoice form. The basics of the invoice would be that we have the customer. Now oftentimes if it's a repeat customer then we'll already have the customer listed and that will be easy to do if it's a new customer. Then we could add the new customer as we go on the fly as they say instead of going into the customer center and adding the customer. So we have the customer up top and then we've got the class. Now class is a special field that's being used here for the job cost system. We might talk about that more later but we've got courses designated just to class tracking in of itself. We've got the template that's being used. We might talk a little bit about how you can change your invoice template to customize it. But the default template will record the transaction just fine in terms of the standard journal entry. We've got the date of the invoice. We've got the invoice number which will be generated automatically by QuickBooks. Typically we've got the bill to information. This information is drawn from the data that was entered when we set up the customer. We've got the ship to one we've got the ship to which is going to be the address that will be needed. If you're going to be shipping anything there we've got the terms net 30. Now this is going to be an important field because it helps us to determine when we expect to be paid. Noting that the invoice is done for work that we did but we haven't received payment for. We expect payment in the future by what point do we expect the payment to be paid in. This is net 30 means we expect to be paid in 30 days. We could set up some situations where we give a discount for example if they pay us early and that's what these items are up top. So that means that the due date is going to be 114 30 days from 1215. Actually it looks like they changed the due date but oftentimes the 30 would be 30 days from the 1215. Okay so then down below you've got the items. The items will talk about how to set up the items in a future presentation. But these are going to be an important component to the invoice because they're going to help us to populate the invoice automatically. So the better we have the items set up the easier the data input would be when we enter the invoice. So for example if you have some bookkeeper that's recording invoices you would like it to be fairly standardized that you could basically have the items set up and they could just record the items that are there and then the amounts will be populated by themselves on their own. So the items just so you know are in the list drop down item lists which we'll talk about later and we want to set up basically our item list which are going to be the list of things that we're going to bill. This will give us the cost it'll also help us to track the inventory if there's inventory that needs tracking within it. So then the items are going to give us the description the quantity of the items the rate and then the amount and then we have an appliance and then so on and so forth the dishwasher for the items they give us a subtotal on down below and then we've got sales tax if sales tax is applicable this is another area that takes a little bit of thinking to kind of figure out what the sales tax is or how to set it up once set up then hopefully it will be automatic when you basically make the invoices so that you can have someone doing the data input of the invoices and not have to worry too much about this sales tax being calculated properly because it's been set up within the system. We talked a little bit about how to sell set up sales taxes will go into that a lot more detail in future presentations but you got the sales tax calculated you got the total here and then you've got the balance that we expect to be paid in the future. I highly recommend whenever entering any kind of data input form like an invoice you try to visualize what the impact will be on the end result of the financial statements that being the balance sheet income statement or profit and loss and then actually go to those financial statements double click drilling back down to the zooming function back to the source document and that will really give you an idea of what's going on so let's try to do that now the invoice looks deceptively simple if the items have been set up right if the sales tax have been set up right but there could actually be a lot going on with the invoice as you entered into the system some of it not being on the face of the invoice so for example because it's an invoice that means accounts receivables going to go up that's what an invoice means we didn't yet get paid accounts receivables going to go up on the balance sheet by the full amount which includes the sales tax $1,636.69 the other side is going to go to sales however you would think it would go to sales at $1,636.69 it's not it's going to go to sales for the amount that we charged before sales tax $1,522.50 in this case so why didn't we record sales of $1,636.69 because the sales tax in theory is charged to the customer it's not us it's not charged to us so you can imagine a system like why don't I just put it on sales at $1,636.69 and then record an expense when I pay the taxes to the tax collector of the $1,114.19 and then it would wash out on the income statement you could do that but the idea is that it's not really your expense you're not the one that charged this $1,114.19 the government did so we don't want to record that as revenue on the income statement we want to record that on the balance sheet directly as a sales tax payable so the difference will be this $1,114.19 which will go on the balance sheet as a payable that you're going to have to later pay in the future also if you have inventory that you're tracking on a perpetual inventory system method then you're going to have inventory that needs to be tracked the inventory is going to be driven by the items but this number over here for example this dishwasher for example this number right here represents the sales price not the cost but the system knows the cost because we set it up with the item therefore it can decrease the inventory not for this number but for the cost and it can record the related expense cost of goods sold so that's kind of a lot going on for one invoice you can check that too by going to the reports on this side and look at this transaction journal so if I go into this transaction journal it gives me giving us basically a journal entry with the accounts that are impacted this one looking a little bit overwhelming because we're in a job cost system so if you're in another industry it might not look this complex even if you are tracking inventory because you might be in a system where you're just buying the inventory marking it up and then selling it as opposed to a system where you're taking raw material and converting it to finished goods in which case you would be using a job cost system or process cost system that's why this one's a little bit more complex but in essence you've got the accounts receivable up top you got the materials income you got the labor income the subcontracted labor and then the sales tax that is applicable down here I'm going to close this back out and so there is that just a quick overview of some of the other items that are in this area you can go to the prior invoice or go to a new to the future invoice you can view or new a new invoice you can save as a PDF you can delete it so and that does QuickBooks does allow you to kind of delete transactions but you want to be very careful of doing that because the invoice could be tied to like a receipt payment create a copy so if you have a very complex invoice then you might make a copy of it if there's a lot of line items down below for example you can memorize it we might talk more about memorizing reports which could be useful save a little bit of time mark as pending saves the invoice but doesn't record the the accounting impact behind the scenes you can print it so you could preview it you can so if you preview it here let's just do it looks like this right I'm going to close this back out looks a little bit different than the data input screen itself so then we've got the email so we can email the invoice if we so choose which of course is going to be more and more useful these days print later email later we can attach a file if we need to add time costs so adds any cost you mark as billable to the customer job we'll talk about time tracking and how you can kind of use that to add to your invoice for time that you've been tracking within the system for example apply credits applies an existing credit for this customer we might talk about that in future presentations and then progress after you record this progress invoice based on an estimate the estimate was changed do you want to update the estimate amounts and recalculate the percentage in the windows that shows progress invoicing details that's kind of a specialty tool that you would be using for progress invoicing receive payments so we could go from here to the receive payments that's what we expect to happen in the future when we get paid on the invoice we've got to create a batch which creates one invoice to send to multiple customers so we could create one invoice and use that could be a time saving tool and then we've got the refund credit creates a credit memo using the items and prices on this invoice in other words if they returned the item and we need to reverse the transaction we typically don't want to delete it but rather create a credit memo so in the formatting we can basically preview it here so we've got the preview which we saw earlier in the print option as well we've got the managed templates so you could make different templates and use those different templates to customize them download templates if you need to customize data layout customize what information appears on the invoice spelling check that insert lines delete lines so that would be similar to inserting and deleting like you'd see in the grid lines so it deletes the selected line item helping you to sort the lines in the order that you might want them to be appearing copy a line and customize design send and ship so you've got the email then you've got your shipping options here and then mail invoice prepare a letter and then we've got the reports so the reports then we've got the quick journal here so it gives you a report that you that gives you a quick journal of that particular customer which you could find generally in the customer center would be a place you'd probably go to look at that information we've got the transactions history we got the transaction journal that's actually a nice tool to help you to see what's being recorded pretty quickly view open invoices basically a report that you can find the report area or go to the customer center sales by customer detail another kind of report option average days to pay summary so the main thing is generally on the main page and the data input forms let's close this out and let's imagine the impact on the financial statements and kind of work backwards from the end result to the source document now so I'm going to open up the carrot we're going to go to the balance sheet so we can imagine if we entered an invoice we would have an impact in the accounts receivable so if I double click the accounts receivable and change the date 010124 so there's our invoices increase in the accounts receivable and if I drill back down on the invoice it will take us to that particular invoice back to the source documents we're going to the end result back to the source document closing this back out and note that this amount that we have this invoice is the total the total amount down here not the subtotal so I'm going to close this back out and close this back out the other side typically we think of going to the profit and loss that's how I think about it so the other side would be going to income in some way note that we have a lot of income accounts because again it's a construction company so they grouped it up a little bit more a little bit differently than you might see in another kind of industry but if I double click on an income account actually I'm going to close that and I'm going to look for this materials income because the materials income is likely to be having sales tax applicable to it so I'm going to go to the materials income and so now we have all of our invoices increasing the income side of things if I double click on a particular invoice then it's going to take us to that invoice and if I'm going to make this one a little bit larger there's the materials item so notice it's only recording the amount not including the sales tax right it's recording this case that line item of the 2400 right I believe it was 2400 not including the sales tax that is being charged so the sales tax is not going to the income statement is the point so I'm going to close this back out and so where's the sales tax going I'm going to close this back out let's go back to the balance sheet the balance sheet if I go down to the liabilities then we've got the sales tax right here so it's increasing the sales tax a liability account on the balance sheet changing the 010124 beginning date so the sales tax is increasing with an invoice increases the sales tax because it's charging in theory the customer for the sales tax closing that back out and then closing this back out now the other thing that we could have is inventory so if inventory is being tracked then generally you would think that the inventory account would be going down when you enter the invoice in other words the inventory account usually it gets again it's a little confusing with the job cross system but if you were just buying inventory marketing it up and selling it you would think the inventory generally is going to be going up when you purchase the inventory with a bill in essence and then it would go down when you sell the inventory so if I double click on this account and change the first date 010124 then we've got it's going up with the bill and then these invoices are bringing the inventory down if I double click on this note this number 1500 to get to the source document we don't see the 1500 on the invoice anywhere why because that's the cost this is where it gets a little bit tricky and this is where we have to understand the items so it's just like when you kind of mark something off at a grocery store and you try to check it out and you see the sales price that's great but you don't know what they bought it for you don't know the profit that they are making because they don't have the cost on it well this invoice assuming it's going to a customer is not going to have the cost on it even though when you scan something at a store when you record an invoice it's going to be recording the decrease to the inventory at the cost the other side of that then is going to the income statement income statement to the cost of goods sold somewhere down here in the cost of goods sold I'm just going to click on the cost of goods sold here and you can see that the invoice is being used to create the cost of goods sold account so one more recap on that what does an invoice do if there it's going to say an invoice means there's an increase to the accounts receivable the other side is going to go to sales some kind of sales account on the income statement if the sales tax if there is sales tax involved then the sales tax will be included in the accounts receivable but not in the income statement sales side the difference there go into the balance sheet in a payable account a liability sales tax payable which should happen automatically if the invoice is set up properly if you're selling inventory then you will also have a decrease to the accounts receivable account and then also on the profit and loss an increase to the cost of goods sold account of some kind net impact on the profit and loss will be the increase in the sales less the increase in the cost of goods sold the income minus the expense related to that transaction okay the other thing with an invoice if I go back to the balance is that this accounts receivable we also want to see the sub ledger related to the accounts receivable the impact on it which you might find by going to the customer center company drop down or customer drop down customer center find the particular customer and look at the invoice that has been applied here you might look at the subsidiary reports reports drop down customers and receivables accounts receivable customer balance detail let's say and so now you've got the invoices by customer increasing the balance per customer the total of the sub ledger report then adding up to 93 was it 93 007 93 tying out to the balance sheet 93 007 93 the other common receivable report being reports drop down customers and receivables AR aging summary breaking out by how past do the amounts are 93 007 93 and that ties out to the balance sheet here and then we have the inventory if we're tracking inventory in the system we also want to see the sub ledger related to the inventory which is going to be impacted by the invoice decrease in the sub ledger on the account of inventory reports drop down inventory inventory evaluation summary so now we've got our physical count of inventory that's going to be impacted decreased by the invoices when we sell inventory the asset value then should tie out here 30,638 38 to the balance sheet 30,624 52 let's go back on over here this is 30,683 let's change this to 1231 to 430 is 30,624 52 and 30,624 52 so you can see there's actually a lot going on with the invoice depending on if you have inventory or not and if you have sales tax or not and so you really want to whatever industry you're in be able to break down what's happening with that invoice and later we will talk about in the second half of the course how to set up all that stuff sales tax items inventory so that you can do the data input as easily as possible with the invoices