 QuickBooks Desktop 2023 Purchase Order Form PO form. Let's do it within two weeks. 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 our QuickBooks Desktop sample rock castle construction practice file provided by QuickBooks going through the setup process maximize and the home page view drop-down open windows list making sure that it is open going to the reports drop-down then the company and financial opening up the profit and loss otherwise known as the income statement range change tab 010124 tab 123124 tab January to December 2024 I'm gonna customize the report so we can change the fonts and numbers increase in the font size to 12 okay yes please okay then I'm gonna open up the balance sheet reports drop down we're gonna go to the company and financial once again look at that balance sheet standard the other major financial statement report 123124 the date we're gonna use I'm gonna customize those numbers fonts and numbers again change the font and number bring it on up to 12 okay yes please okay there we have it let's go back over to the home page so now we're focusing in on the vendor center remember that ultimately the vendor center means we're purchasing something goods or services from somebody else cash ultimately going out at the end of the day we've recalled that the easiest way that we have paying for bills for example would be if there were just paying for them as they come and possibly we're paying them electronically for example possibly relying on bank feeds in order to make those payments that's the easiest way the second thing easiest way is we can actually write physical checks as the bills come in and then reconcile those checks to the bank account using bank feeds and or bank reconciliation process or we can have the accrual process us entering the bills that we've talked about in the last couple presentations which increases the accounts payable and then we pay the bill with basically a check form a form that decreases the checking account but a special check form which is decreasing accounts payable directly now we also this this is the normal accrual process for for companies that don't have like inventory that is in play if you have inventory then you have the added level that we have to think about up top and that's going to be this column or this row up top now note that if you're purchasing inventory there are a couple different ways that you can do inventory for example you might have a perpetual inventory system or a periodic inventory system in a periodic inventory system you might be basically tracking the inventory possibly outside of QuickBooks doing a count of the info inventory possibly nightly possibly weekly or something like that and updating the inventory in essence manually on a periodic basis or you might use a perpetual inventory system when we're using the inventory functions within QuickBooks we're usually talking about a perpetual inventory system meaning we're going to be increasing the inventory as we make the purchases of inventory that would be usually when we enter the bill for example or we can enter a check and increase the inventory when we enter the check and then when we sell the inventory with typically an invoice or sales receipt we're going to be decreasing the inventory with at that point in time instead of periodically using like a physical count so that's what we mean a perpetual inventory system when we're tracking inventory within QuickBooks that adds another level of kind of complication within QuickBooks because we have other reports that we're going to be using in order to track basically the inventory if we go to the reports drop down up top for example and go to the inventory we've got the inventory valuation report opening that up now we've got let's change the date to 1231 to 4 and so now we've got our list of inventory we'll talk about how to set up inventory it's a whole kind of special area in and of itself how to set up the items in a future presentation but just note that you have this added kind of level of having to track the inventory units and in addition to just what's on basically the account on the balance sheet so this 30,683 38 if I go to the balance sheet and we go to the inventory there's the 30,683 38 we saw a similar kind of thing with the accounts payable when the accounts payable is increasing we also want to have a sub ledger breaking that accounts payable out by who we owe the money to by vendor similar thing with the inventory if we have the inventory total up top that's not everything we want to know where is it there it is we also want to know broken that information out by what kind of inventory we have and the cost of the inventory units and so on given us basically a sub ledger given us more detail based on the inventory information okay so given that I'm gonna go back to the homepage also note that if you have a service company you might not see this top line up top the reason it's here is because we set the company up as a company that has inventory and so if we go to the edit drop down up top and go to the preferences you can find the inventory options here so if I go items in inventory and the company preferences then you see we have inventory and purchase orders are active and so on if that were not checked off then you may not see this basically this top line that's something that we're gonna set up when we do the setup process and we'll talk more about these preferences and that's why we'll talk more about them in the second half of the course we'll go through all those basic preferences in this case like which would be the case if you went to a company and started doing bookkeeping for a company already set up the options would already be set up and if you needed to change them you could go up top here I'm gonna close this back out so now if we assume that we're tracking inventory within the QuickBooks system then we're gonna go through the purchase order now the purchase order is a form just like the bill form and the pay bill form and so on where we do the data input but it's also a little bit different you'll note that every time we do a financial transaction there's gonna be an impact in at least two accounts on the major financial statements balance sheet and income statement when we enter a bill for example we saw that accounts payable goes up the other side goes to like an expense account when we pay the bill accounts payable goes down we saw that the checking account goes down the purchase order form is one exception to that rule it looks like a financial form but there's actually no impact on the financial statements themselves the reason for that is because when we enter the purchase order we're really just making a request which is different than what usually happens for us individually so note individually if I was to purchase say something from an online store like amazon.com for example I pay for it at the point in time that I order it even though I have not yet received the inventory because I paid for it at that point in time there is a financial transaction that happens at that point in time if however I'm purchasing something let's say I'm getting something shipped from a manufacturer in China and I'm buying in bulk I might have more leverage in that situation and be able to say look I would like to order let's say like a hundred cups or something like that but I'm not gonna pay for those hundred cups until I receive them I want to receive them and then count them and then I will I'll pay for them so that would only happen generally if you if you had more leverage right in the situation and possibly are buying more in bulk so in that case when I make the request for the 100 cups with something like a purchase order I have not actually paid for them yet and I don't actually physically have them yet therefore no financial transaction has taken place at that point in time and so I still want to track the fact that I made a request but there's nothing happening to the financial statements balance sheet and income statement so that would only happen in situations where you have inventory and you're requesting the inventory before you're paying for the inventory so if I go into a purchase order then if we take a look at one let's go back to a prior purchase order that has been done so I'm gonna close up the carrot on the left-hand side we've got the information on the right related to it so we've got the open balance so open balance POS to be received one I'm gonna close this activity on the left and the general information for the purchase order is that you would be entering a vendor this of course is who we're gonna be purchasing stuff from purchasing typically inventory from if you've got clack this is a class I won't dive into classes now it's kind of a special tea area that we'll talk about later because this is a job cost system that they're using we've got the drop ship to information we've got the template that's gonna be used a kind of form purchase order that we're have that we're using we've got the date this is gonna be the date of the purchase order generally populated automatically got the PO number the vendor we've got the address and the ship to address which of course is going to be important as well then we have the item this is an inventory item that we are purchasing and we have to set up the items in order to in order to enter the purchase order so we could add a new inventory item and this is where things get a little bit tricky and we'll talk more about them when we get into the second half of the course as we set up the items but note that you when you have the purchase order and you're dealing with inventory and you're tracking inventory into the system you've got to have two costs that you're going to be or two prices for the inventory one what we're purchasing the inventory for which is going to be on this side of things the purchase order the bill the check that we're going to pay the bill from how much we're paying for the inventory and then if you're buying and simply marking up the inventory and selling it we're also gonna have to have the sales price the amount we're charging for the inventory that being applied when we make an invoice or sales receipt so we have to set up an item to kind of do that we also need to track the fact that this inventory is on hand when we not when we make the purchase order but when we have the bill when we receive the inventory and so we have to be able to label the inventory that way and that's where these items come into play so we'll talk more about them in the future we got the quantity that we're purchasing the rate and then we could list a customer here and the customer is not a required field for the purchase order because you might say well the cut why do I need a customer because I'm dealing with someone we're buying stuff from if I'm buying inventory and I'm just gonna put it in a store and then sell it I don't know who I'm gonna sell it to therefore wouldn't have a customer but if I have a situation where a customer specifically asked for something then I might assign the customer on the purchase order not because the the vendor needs it but because I'm gonna use the purchase order to help me track the fact that I'm buying this particular piece of inventory for a particular customer once I receive it I'm gonna turn around and sell it to that customer by creating an invoice and sales receipt that's kind of linked through to the purchase order in that case because I bought it custom for them we've got the amount here and then the received 20 okay so let's close this out now this is a little bit tricky because again you got to say well okay well what's gonna happen if I open up the carrot here what happens to the balance sheet and the income statement no transaction happens there's no increase to the inventory because it's just a request for inventory so then the questions well how am I going to track the fact that I have these open inventors what do I have what do I expect to be happening in the future I'm hoping that if I ordered you know a hundred cups from a company in China that I'm gonna receive them at some point in time in the future and when I receive them then they're gonna be coming with a bill so you're imagining purchase order requesting a hundred cups of or something when we receive them a box of a hundred cups or something like that we'll then have the bill we are imagining and then we will enter the bill at that point in time so we can count the cups then we can compare the physical count to the amount that we put on the purchase order and then we can enter the bill because at this point in time we physically have the inventory in our possession it is ours therefore a financial transaction has been taken place because they have complete they completed the process then we're gonna increase accounts payable this would be similar to this bill down here that we entered before and the other side go into an item which is gonna be inventory these two will be linked we'll see this in a future presentation meaning this this bill will be populated from the information for the purchase order so we'll talk about that next time if we're trying to figure out which purchase orders are still open oftentimes you would go to the vendor center which you could do here or you can go to the vendor center drop down up top vendor center and then we could go to the vendors themselves for example and we could look for a particular vendor and we might look at the purchase orders if we if there are in we could try to sort by the purchase orders if there were any outstanding one way we can do it or we can go to the transactions tab and we can say I want to search all of the transactions that are purchase orders so I can go up to the purchase orders and then we can sort by all the purchase orders that are there all purchase orders or just simply the open purchase orders the ones that that we have not yet received and then I can go into detail and follow up on this I could say hey where's this stuff I could try to call the company at that point in time and say you know this purchase orders outstanding what do you have on your end and so on so I can hit the drop down if I go to all purchase orders we can go in drilling into the form and I picked a different one here with the Thomas kitchen and bath because it has the received in full item down below which of course would indicate that we made a request for inventory listed below from the vendor Thomas kitchen and bath with the purchase order and then later we had then received that inventory and possibly entered it with a bill the bill kind of linking over to the purchase order to show that it has been received in full that link between like a bill and a purchase order and those indications are quite useful within the bookkeeping side of QuickBooks and note that if you have a financial accounting background like you'll see things in terms of debits and credits and financial transactions used to create the end result the balance sheet and income statement you might kind of overlook some of the added value that is there when you're looking at these connections between forms like purchase orders and bills which are quite useful when you're trying to track down what is happening on a vendor by vendor basis for example on the bookkeeping side of things if you go to the right then on this little carrot you could see here that we have the summary data on the right hand side and then we've got the PO's to be received are at zero if you go to the opening balance it's going to go to that vendor basically a report for the Thomas kitchen and bath and you've got the bill here so I'm going to close this back out I'm gonna close this back out and so remember that when you're entering the the purchase order you could go basically to the home page the purchase order up top doesn't make an actual financial transaction it's only going to be there to basically request inventory would only be there if you're in a type of business that has inventory and one in which you could basically make a request of inventory before and not and not pay for it until basically you receive it once we receive it we'll talk about next time entering in essence just simply a bill just like we entered down here but one which it's going to be paying off inventory and therefore has the added burden the added task of tracking the inventory once we receive it in a perpetual inventory system