 QuickBooks Online, products and services list item list. Get ready to start moving on up with QuickBooks Online. We're gonna be using the free QuickBooks Online test drive searching in our online search engine for QuickBooks Online test drive, selecting the option that has intoit.com and the URL into it being the owner of QuickBooks. 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. Using the United States version and verifying that we're not a robot. Zooming in a bit holding down control up on the scroll wheel currently at 125% on the zoom in selecting the cog dropdown, noting that we're in the accounting view as opposed to the business view we may be toggling back and forth between the two views so you can see where things are located in each of them. Duplicating tabs as we do every time to put reports in right click on the tab up top, duplicate it, right click the tab again and duplicate it again as the tab to the right is thinking we're gonna tab to the left, go down to the reports at the left and then open the balance sheet as that's thinking tab to the right reports on the left open up the profit and loss income statement P and L in other words, closing up the hamburger, the hand boogie and scrolling up with the range change from 010122 tab 123122 tab, run it to refresh it and then tab to the left and we wanna close the hand boogie, scroll up ranges they are a change in from 010122 to 123122 tab run it to refresh it that's the setup process we do every time back to the tab to the left we've been looking at our lists just a quick recap here remember that the normal day to day transactions into the system will typically be done with the plus button or this is one way you could find the normal forms that enter the financial transactions that create the financial statements most of these forms having an impact on at least two accounts every time you do that data input our goal is to set up the system to do the data input in these forms as easily as possible and allow them to create the financial statements from them as easily as possible as well as to be able to communicate with the customers, vendors and employees about those financial transactions smoothly. So the underlying foundational items to do that will be the lists that we typically do when we first set up the account which includes the general ledger we talked about last time the other major list are gonna be the products and services sometimes called items if you're coming from the desktop version of the software then items is gonna be a term that you'll probably still hear in accounting terminology as well as in QuickBooks online possibly primarily or in large part due to the long use of the desktop software that use that here we got the products and services. So notice that as we enter those we could find them in the cog dropdown and we could go to lists products and services that's one way you can get there you can also see that that took us on the left hand side to the sales tab and then within the sales tab it's in products and services that kind of makes sense because the sales tax tab represents what I was called the customer cycle and the things that we're selling are the lists the products and services if I was to go to the business view with the dropdown up top switching to the business view we would select and find the products and services on the left hand side and the get pay and pay area and then we would go into the get pay the customer center in essence and then the product services on down below which you might hear called say basically items inventory and service items in normal kind of language as well. Now note that as you do the data input forms if I hit the plus button up top the items are gonna be definitely useful when we enter an invoice and a sales receipt those are gonna be the normal forms used to record revenue and if there's inventory that we have to deal with as well then when we buy the inventory with an expense, a check or bill form then they can also be used on that side as well on the purchasing side of things. So let's take a quick look at when the items will be applicable on our flow charts. I'm jumping over just to a flow chart this is the desktop flow chart but we're just looking at the icons within the flow of items to see how setting up the inventory items and service items will be important. Mainly we're focusing on the customer side of things the customer cycle which at the end of the day we hope will result in an increase to our checking account for goods and services that we provided to the customer. Now you'll recall that there's many different ways that we might set up the cycle here depending on the type of industry. So most common for example if we're just getting paid from gig work from YouTube for example or from Amazon and we're just getting money going into our checking account we record it revenue after we receive it in our checking account we can basically use the bank feeds and say the deposit form possibly to record those transactions. In that case then we're not actually using the form designed to record sales transactions. So we're losing a little bit of the detail but it could be a useful strategy if you have an industry or a business model where that can be applicable. And so we just use the deposit form to record the revenue and we don't even really need items in that case because the revenue we just know it came from the platform of YouTube or whatever. If for example we're selling stuff at a cash register however a food truck or a restaurant or a store of some kind then we're gonna need the items to be able to be entered as easy as possible. So if someone comes up to us and says hey here's a bunch of items that I have we can put it into the system. This would be a similar process if for example you're at a grocery store and you're doing a self-checkout or you're going to a checker at the grocery store we need to have the system be set up so the data input is so easy that someone who's even buying the groceries can basically do the process and the system is actually recording that somewhat complex transaction that is done through the proper setup of the items the inventory items and the service items that we'll take a look at now. And then we could then have a full accrual process where we are buying the, I'm sorry where we are having an invoice which will increase the accounts receivable. And at that point in time similar kind of process here we wanna make sure that we have our items set up so that the inventory items or the data input of the invoice is as easy as possible. Now note you might be on this side of things with an invoice more on like a job cost system. In other words, if you're at a cash register and someone's coming up and you're working at Jiffy Lube or something like that and you just have oil exchanges or rotating the tires then of course you wanna have those things in place at the register. But if you're at something where you're invoicing it's likely that you do the work first you might be in a bookkeeping service, a law firm which it's more likely in those cases that you just charge hourly service. You might just say, well I worked so many hours and you can set up items based on hourly service. So for example, you might have a partnership is common in those kind of businesses and then the staff works for the partners or works for jobs for the partner. So you might bill out their hours based on who's doing the work and then have a billable rate on it. But you also wanna think about a model possibly if you can to try to say I'm going to charge based on what I'm doing. So if it's bookkeeping you might wanna say I'm gonna say if there's so many transactions that I've recorded this month and it's between a certain range I'm gonna charge you this much. This is how much I charge per so many transactions for monthly recording or monthly bookkeeping. The more you can do that the easier it will be for your bookkeeping system. It can be quite agonizing to track your hours and try to see whether or not your hours were optimally used or if you were tired during that time or something like that you were taking longer than normal and so on as you're tracking the hours. The more you can basically do your own billing cycle in such a way that maybe you're not reliant on just hourly tracking but rather you have estimated how much time it takes to do certain jobs that is something that might be worth taking into consideration. So to set these up properly then to make them record properly we have to enter the items. Now also if you have inventory inventory is gonna span the vendor side purchasing side and the customer side. And we have the same issue with inventory we've talked about a couple of times. One you might do the easiest inventory method which is you're just gonna expense the inventory when you purchase it which means that you're just gonna expense it when you purchase it and the item isn't gonna have as much of a use in that case because you're not tracking the inventory on a perpetual inventory method system you're just gonna record it into cost of goods sold when you purchase it and possibly then you're gonna turn around and invoice someone quickly possibly in custom kind of jobs where you're buying things specifically for a particular job and that could work in that case or if you're tracking inventory then the question is do you track it within the QuickBooks system on a perpetual inventory system or outside of it on a periodic inventory system? If you're tracking outside of the system on a periodic inventory system then the items that you set up don't necessarily need then to track the units of inventory because you're just gonna record them as an increase to the inventory account and look at the units of inventory outside in QuickBooks or something like that and then possibly you do a physical count daily, weekly, monthly and make a periodic adjustment lowering inventory recording the cost of goods sold periodically based on that physical count or the full service inventory system that you're tracking within QuickBooks means that you have to set up the items so that when you purchase the items possibly with a purchase order to the bill it's gonna increase not only the inventory account but also the units the sub ledger by item and then when you sell it it's gonna decrease the inventory and record the sales that means that you have to use the invoices and the sales receipts on the sales side of things okay so let's go back on over we can see that here if I hit the plus button and I was to go to an invoice then we can see that we have our items down here these are gonna be the items that are set up if this is set up properly then it's quite easy to populate my information into the system and if we're buying inventory we can also see that on the purchase orders and the bills so if I go into a bill as well as a check and an expense form there's gonna be your categories down below and not here in the items category down below we want these to be as easy as possible to be populating so how do we do that let's go into the items I'm gonna close this back out I'm gonna go back to the accountant view because that's my preferred view personally cog drop down accountant view and then I'm gonna go into the sales on the left hand side and then the products and services tab up top closing this out and so this is our items now when you first set up the company file you might have items that you set up in your prior accounting system and you might be able to upload your items here so you've got your new or you've got your import so we might talk about that more in the second half or other course when we start the new company file or else you can make a new one at a time and the more button you've got the categories that you can manage categories and you can run a report the categories are gonna be these subcategories within the items so you can kind of group your items in subcategories so for example if you're selling guitars and then basses and then drums you can put them into a subcategory possibly to easier or more easily sort that information if we're gonna make a new item I can select a new item here the baseline would be it's either gonna be an inventory item a non-inventory item a service item or we can set up bundles of items so as they say here the products you buy and sell and that you track are up top that's the inventory item that means that you're tracking inventory on a perpetual inventory method that's the most complex item to be dealing with it's gonna have the purchase side and the expense side of things and be tracking the units of inventory not just the dollar amounts of the inventory you might have the non-inventory products you buy and or sell but don't need or can't track quantities of for example nuts and bolts used in an installation so now you're saying maybe it's an inventory type of item that you're using but they're so small in units possibly that you're not gonna be tracking them in the same kind of tracking method as with the inventory items so it would be tracked similar kind of like to a service item in that case then and then we've got the services services that you provide to customers for example landscaping or tax preparation services meaning you want to be able to group them on the sales items in terms of your sales prices and stuff on the invoices and sales receipts but you're not gonna have to track the increases and decreases in the inventory and sub amounts of inventory and a sub ledger bundles a collection of products or services that you sell together for example a gift basket or fruit cheese and wine so once you set up your inventory possibly you can use those inventory items to create a bundle a package kind of situation so let's take a look at some of these just to look at the differences in the data input if I just stroll through the inventory let's just make one as we go I'll say if this is inventory one and I'm gonna copy that I'm not gonna put an SKU number here you could put an image of it which can actually be quite useful if you have a larger company so that people can go in here and actually see the unit of inventory so it's actually quite nice to take a picture of it if you have a bigger company and you have different people dealing with it to identify what you're looking at you can then say this is gonna be inventory item I'll say test inventory category I'm just gonna put and we'll add that as a category and then the quantity on hand represents the quantity that we first start out with usually you're not gonna add a quantity on hand because you're gonna be putting the quantity on hand when you buy them but if this is the first time you're entering the system or you're just starting to enter data into the system from a prior accounting system you might use that we'll talk about that in the second part of the course or other course when we get into the starting a new company file now I'm just gonna choose the beginning of the month you have to pick a date here so I'm just gonna choose the beginning of the month the reorder point at what point do you want like a reminder for them to order again zero if you want to go all the way down to zero but if you want it to go to a low point like five or something and then tell me to get another one or something like that the inventory account represents the account that will be impacted when you buy the inventory with a bill and or check or expense form and when you sell the inventory it'll decrease with an invoice or sales receipt and then the description that's gonna be shown on the description on the forms and that would be invoices, bills, sale, expense forms the sales price I'm just gonna put for like 250 the sale of product account is the default sales account that it's going to the income statement account that will be impacted when we create an invoice or sales receipt taxation remember that the items are the primary thing to determine whether or not sales tax will be applicable so to deal with the sales tax we talked about in a prior presentation you first gotta think you gotta turn on the sales tax which will differ by location depending on your state in the United States and then the products and services will determine whether or not it be taxable or not so you can browse the items here or if you think it's a taxable item you can default it to a taxable item if it's not taxable you can tell it to not be taxable and then the third component remember is that the customer might have a different location which might change the tax if you have different locations and they might not be taxable so you could say that that particular customer isn't taxable even though they're buying something that the item would normally say is a taxable item so I'm gonna close that I'm gonna save that as taxable the purchase information the description that's gonna happen on the purchase side often times it's the same so on the invoices and sales receipt the description is gonna be the same as on the when I purchase it with a bill or expense form let's say it costs $100 and cost to good sold represents the expense account that will be impacted when I sell the item and then the vendor preference if I have a preferred vendor I can pick a vendor or set up a vendor and so that'll be the preferred vendor so we could save that and just note if I go down here there's my test item it went into that category scrolling back up let's do another one and say what if it was non inventory so if it was a non inventory, non inventory one number one and I'll copy that no SKU category I'm gonna go into the same test category this is gonna be the description let's say this is gonna sell for what did I say 210 let's say this time and this time it's going into a service the service income account is what it's picking here so we'll keep it in service item but note it's acting kind of like it's a service item here even though it's so you might actually change this to the sale of a product or the sale you might have another account for a non tracked inventory item but it's acting kind of like a service item because we're not tracking the inventory on it so the data input similar to a service item and then if it's taxable notice in the United States a lot of times a service item isn't taxable so maybe this is a nice way to say hey look it's still a taxable item because it's an inventory item even though we're not tracking the inventory in the system so I'm gonna say done here so there we have so I'm gonna say the tax is not it is taxable I'll keep it at that and so that's gonna be it notice the purchase information so I purchased this products from a vendor so you can decide whether or not you're gonna be adding the purchase information remember you're not tracking the information on inventory so you may or may not decide to be adding it on the purchase side of things so I could put it here let's say it costs let's say it costs $50 and then the side of the account that it's gonna go to they're putting it straight to purchases you might put it to cost a good sold notice what it's not doing is going to the inventory account because we're not tracking the inventory account on a perpetual inventory system you could try to use this kind of method the non-inventory items if you're tracking on a sub ledger to kind of record them possibly in inventory and then make a periodic adjustment to decrease inventory based on your sub ledger let's save and close it so that shows up down here and then if I go back up top and I say new let's take a look at the service item so I'm gonna call this service one service one and copy that I'm not gonna do an SKU category let's put it into our category that we've been setting up description is gonna be service one sales price let's just say is 140 now it's going into the service income account the income account impacted when we create an invoice or sales receipt this time I'm gonna say it's a service item therefore let's say it's not taxable for sales tax purposes done and I generally do not have any purchase information down here for a service item because it's a service item and so no bills that are gonna be inputted with it so if I scroll down there is that and then if I go to a bundle just to round it out on a bundle I'll call it bundle one you've got the description, the name I'm just gonna say that's the description and display bundle components when printing or sending information so do you want the added detail on the bundle here or not or do you want it just to show up as a bundle and then if I hit the drop down we can have our bundle here let's say that this is gonna be inventory let's say I've got our yeah I got our test inventory item let's say we got one of those or two of those and then I've got our service item here and so let's say we've got one of those or let's say two of those right so I've got two of those 12 of those okay so those are the bundles I'm just gonna close this one out and then so now let's just think about how we might populate this information into say an invoice for example we then if I hit the hamburger up top if it was an inventory item then the next thing we might do is purchase the inventory so the inventory purchasing we have the bills and let's say this is gonna go from AAA and let's say that we're gonna be purchasing one of those inventory item ones inventory item ones what did I call it INV inventory item and then we're not gonna have a category down here now because I'm not just gonna apply it to an account I'm gonna track the items because I'm actually gonna be having an inventory item that I'm gonna track and this is gonna be inventory item one so the inventory item and let's say we buy 10 of those for example now it will populate for us automatically this will increase the accounts payable because it's a bill and it will increase the inventory as well as the inventory sub ledger item so if I save and close that save and close and we go to here and say run it our major focus then is here on the inventory asset so if I go into the inventory asset now we've got our inventory item on that has gone up now it's also important that I have a sub ledger tracking the units of inventory so I'm gonna go to the tab to the right right click on it duplicate it and then open up another report by going to the reports on the left hand side and then go into let's I'm just gonna type in inventory valuation summary and it didn't go it didn't go it just impacted on the surface so that's from Star Wars 3122 okay so then there we've so there we have it so the total is at 159625 and so so hold on a second yeah one there it is so then if I go back on over so then if I created a now notice the other items I'm not tracking the inventory so if I was to purchase that non inventory part it's not gonna be increasing you know the inventory account so then if I was to sell items over here let's make an invoice and let's sell some of them let's make this customer BBB and I'm just gonna set up a new customer and then we had our items down below we had inventory item so there's our inventory item we could sell let's say we sold two of those it's taxable notice it's taxable because it was told that it's taxable by the items taxes set up and the inventory item said it was taxable with regards to sales tax let's say we had a service item one as well let's say we had two of those notice how easily it populates over here so if I was to do this at a register or have someone do with the billing process they should be able to populate it fairly quickly and then we had like a non inventory item let's just keep one of those and it's taxable because it's an inventory item we're saying even though we're not tracking it in the same way as these items so what would this do? it's an invoice it's gonna increase the accounts receivable 104680 and the other side's gonna go to revenue but only for the 990 the sales tax is being calculated how does it know to calculate the sales tax? because these two are checked off those two are checked off automatically because the item is telling us that it's subject to tax and the sales tax had already been turned on which we talked about how to do in a prior presentation and this customer is not defaulting as not taxable the customer is normally taxable or will follow along with the tax rules applied by the item generally in my so there is that and then also the inventory is gonna be going down for the amount told by the system not the 500 but only for this one item that actually tracks the inventory and for the amount told by the by the item that we set up but I think we set 100 so it'd be $200 and then and then also the sub ledgers the cost of goods sold will be impacted by that same amount and the sub ledgers will be impacted for the inventory given us the units of inventory not just the amount for that one line item these two don't have inventory tracking turned on in the system so let's save it and close it and check that out notice that's a quite a detailed transaction that is very easy to do the data input for because the chart of accounts is set up properly and and the items are set up properly or the service and inventories items so if I go into the accounts receivable now we can see that one for the full amount BBB the other side if I go back and go to my income statement and run the income statement to refresh it then we have it going to various kind of income statement accounts here because we had different items in there let's take a look at the one related to the that has the inventory that we sold which is in the products and services right here so if I scroll down notice that these two the 500 and the 210 are in there but not the service item so it's going line by line because the service item is going to the service income line account and so but if I was to add all three up it would come up to 990 they got recorded the difference going to the sales tax scrolling back back to the prior tab and then in the sales tax that's a liability account so in the liabilities you got it broken out by location I think we're in California for this example so there's the sales tax and going back up we've got the inventory going down now with the sales side of things because we're tracking that one inventory line item on a perpetual inventory system going into the inventory we can see it goes down by 200 an amount not included on the invoice an amount only tied to this one line item because these two don't have inventory related to them going back uh... or closing this out and then going back again the other side going to the income statement profit and loss running it and that goes to the cost of goods sold boom and we see that 200 here as well and then back and then also this inventory line item is being tracked not only by dollar amount on the balance sheet but by unit in the sub ledger and if i run that one again you can see now the inventory went down by the two items that we sold and this one three nine six twenty five should tie out to what is here on the balance sheet all that's happening pretty automatically even though it's quite complex a transaction because the chart of accounts have been set up properly and the items have been set up properly making the data input just simple data input that's the goal now i think we talked about both that both views here so if i went to the car drop down in the business view uh... we've been working mainly in the the products and services so that's an under the get paid and paid tab under this view and then products and services down here obviously the plus button still same location and the reports are under the business overview and the reports