 QuickBooks Online 2023. New vendors set up and accounts payable beginning balances. Get ready to start moving on up with QuickBooks Online. 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 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. QuickBooks Online Test Drive sample company open if you want to have the two open at the same time we suggest using the incognito window or another browser to do so. If using Google Chrome you can open an incognito window by selecting the three dots up top in the browser and new incognito window then type into the search engine QuickBooks Online Test Drive. We're going to be using the sample company to compare and contrast the accountant view the view that get great guitars is in and the business view the view the sample company is going to be in. We're going to duplicate a couple tabs up top so we can put reports in them by right clicking the tab up top and duplicating it. We're going to do this every time right click on the duplicator tapped open again because we're working on building the financial statements the balance sheet and the income statement as the tab to the right is thinking. I'm going to tab to the middle go to the reports on the left hand side open up the balance sheet report. If you were in the business view the reports are located under the business overview and then the reports then we're in the same location and then if I tab to the right. We're going to open up the reports on the left hand side again this time the profit and loss closing the hamburger up top doing a range change from 010122 to 123122. We're have the cutoff date of December 31st 22 that's what we're going to enter our beginning balances starting the new data in January 1st 2023 tab to the middle. Scroll up close the burger and change the range from 010122 to 123122 and run it. So there is our balances thus far we've been entering the beginning balances from our sheet over here imagining that these are the balances as of 1231 22 that we want to have our beginning balances of so we can start in January 1st 2023 with new data input. We're entering them one at a time and applying any further needs to the accounts as we enter them the other side washing out to owner's equity as we go which we will then adjust at the end of this process. So before we did the inventory accounts which had another need of tracking the inventories by unit in a sub ledger we like that accounts receivable which tracked a sub ledger by customer which had a special need. Now we're going to go to the accounts payable another account that has like a sub ledger that we need to be tracking accounts payable represents money that we owe to a vendor. So we can't just put a journal entry in place because I need to know the vendor that we owe. So we're going to put the beginning balance into a new vendor and QuickBooks will create basically a bill form as we enter that the bill form being the form used by QuickBooks to enter an increase accounts payable. So again at first glance just like with the receivable you might think hey I'll just enter a transaction a journal entry to do this so you might say hey I'm just going to go over here. I'll go to the first tab hit the plus button go to a journal entry and I'll just credit the accounts payable and then the other side will go to opening balance equity or whatever. And then QuickBooks won't let you post it because every time you post something to accounts payable you need to add a name. So then you might say well that's fine I'll just add a name to the vendor that I need to have and I happen to have who I owe here which is Epiphone. So I can add that but even that's going to cause a problem because now you're going to have in the vendor balance detail a journal entry which messes up the next step. The next step is to pay the bill that you owe. So what we want is it to be in place as a bill. So we could actually enter a bill. I could say OK I'm just going to enter the bill here for the vendor. I'm going to open up a bill and we could enter a bill but we're going to use the QuickBooks system to do it. Which means we're going to enter the beginning balance and then tell QuickBooks that that vendor Epiphone has a beginning balance. QuickBooks will then create a bill related to it. Not the actual bill that we input in the prior accounting system but kind of a generic bill which will serve the purpose of receiving the payment and everything should roll forward smoothly from that point as we enter it. So it's a bit faster of a process. Now note as you're entering bills you could of course enter the vendors as you enter a bill. And when we add new vendors this is often the way we do it because remember the vendors for most companies we don't need a lot of information about them. Many companies want a lot of information about their customers. Some don't because you might be selling selling at a food truck or something in that case you probably don't get your customers names even or at least don't record them. But some customers if you have repeat customers you want detail and you want to foster a relationship with them get their address and what not. On the payable side of things usually we're just paying things like the phone bill the electric bill all I need is the name in order to facilitate the electronic transfer or the check. But sometimes we might want to facilitate a relationship with our vendors where we want more information especially if we have shipping information such as when we're purchasing the inventory that we're selling. So keep that in mind so we're often going to be adding the vendors as we enter bills as we enter the checks or as we enter the expense forms. If I want to add a vendor to the vendor center then I'm going to go to the left hand side under the expenses which is kind of like the vendor center and then vendors on the left. If you were under the business view it would be under the get paid and pay area and then you've got the pay area and vendors on the left. So then if I was to add a vendor we can import the vendors or add one. Let's just add a vendor so you can kind of see the screen with when it has a vendor in it. So I'm going to add like a generic vendor. I'm just going to call it you know BBB vendor here and let's just tap through the screens. These are these are the data input screens you can use this screen is the only one that is a required field that has the asterisk everything else you may not need title first name middle name looks a lot like the customers. Email phone number mobile obviously the contact information the website and then at the address we have the address which might be could be necessary. If you're dealing with inventory possibly with the vendor although your destination address where they're going to ship the inventory is probably the more and the thing that's more necessary and then tax information. This is going to be if you have to give them a 1099 in the United States that's an added burden if they're not incorporated for example. Then you got to so the general rules are this with a 1099 or the general rules are this when you pay somebody then you're likely to get an expense which is a deduction for taxes it's actually good for taxes. The IRS is going to try to get you to give them information about who you're paying because they want to track the income side of things. So they might do that if you have employees by requiring you to withhold money and so on and so forth. If you're paying a company like the telephone company you don't typically have any reporting requirements because they feel like they've got their fish hooks into those big companies already. So they don't really need your reporting on them to verify their taxes. But if you're paying a little guy like a sole proprietor they don't feel like they got their fish hooks deep enough into those people that's when you might have to issue a 1099. So if you're adding a vendor that it's a sole proprietor then you might have this added 1099 requirement which will help you to track and possibly create the 1099s. And then you got the expense rate if there's a billing rate the payment terms down here if there's a standard payment terms meaning when it's going to be due if you enter a bill how far past the bill is it going to be due for. And then the default expense account which is kind of nice because you can then allocate like an expense account per a particular vendor. And there might be situations where you might use a slightly different vendor name for different even though it's the same company so that you can allocate each time you use that vendor name to its own particular expense account. But also note that as you memorize transactions after entering data in the first month when you enter a second bill for example it will usually memorize the transaction from the prior bill or expense form or check. And therefore you'll have an ability to see what happened in the prior period and here's the opening balance. That's the thing that we're going to enter which when we do QuickBooks this is the opening balance for Epiphone QuickBooks will then create a balance for us related to it. It'll enter a journal entry increase in the accounts payable and the other side will probably go to an uncategorized expense form because it'll make a bill basically. That means we want to enter it make sure we enter it as of the last period of the prior period 1231 to 2 which was what we will do. So I'm going to save this just so we can see what it looks like when we have a vendor in it. So here's the normal vendor situation. Now you've got your BBB. Now we could then add our list of vendors which is a similar process that we did with the customers where you could export all your vendors from the prior accounting system and then add them. However we're just going to add one vendor that we happen to owe money to because I'm really concerned with entering this beginning balance and all the other vendors I might not need to add them from my prior accounting system because I'll just add them as I start paying them. So that's one method that you can use. So you could add all your prior vendors or you might just add your vendors again as you start entering expense forms and what you might do through the bank feeds. As the bank feeds come through you might just create your vendors as you're going in that way. And in that way you might be able to slim down the number of vendors because if you've been doing business for some time from a prior accounting system you might have a whole lot of vendors that you did business with in the past. That you don't plan on doing business with in the future and which are not really helpful for you possibly to add them into your QuickBooks system if you're not entering all that prior data in terms of the dollar amounts that you paid them in the past. So we could do the importing process just like we did before. I could go here and import all the vendors. So if we were to export our vendors and we wanted to import them as we did with the customers we could do that. We can look at the the form that they give us on the vendors match out our titles just as we did with the customers. So I'll just take a look at it here. We won't actually do it but let's take a look at it and there's your headers up top. You've got the same kind of problem with the names of the vendors where you might have your name in two different cells or you might have the last name comma first name. And then you want to switch it to first and then last or then you might want to break it out into one cell or then put it into two cells right all those little Excel tricks. You can usually find a nice way to to format the data the way you want it by searching in like a YouTube search for for Excel trick on how to separate a name that's separated by a comma or separated by a space or combine two names that are in two cells into one cell. So I won't go into that in detail here but just be aware of that. But we're just going to add we're just going to add since we did this before we're just going to add this one item and not imported. I'm just going to add another another vendor. So I'll just close this out and I'm just going to say new vendor and then I'm just going to call it epiphone. That's who we buy our guitars from. So we have epiphone this outstanding balance of 15000 boom and then I'm not going to enter any added data for them. So that's all I really need from them. I'm not going to 1099 them. That's the only one that's really often kind of you want to think about if you have a small vendor that you're paying. But I want to add the opening balance which I would only do when entering the opening balance when started a new company file. Otherwise you don't really want to use that pretty much ever after that point in time. So then I'm going to hit the plus button and or the calendar and make sure that I enter this as of the last day of the prior year. 1231 1231. It won't let me enter it as of the last day what is going on. Oh, hold on a second. Yeah, let me do it. Here we go 1231 222. I don't know what I was doing. So there it is. And so that should be good so it'll create a transaction. So I'm going to enter that. And then you could see there's Epiphone right there. So the next step in the process would be for us to to to make a payment right in the make a payment will tie out perfectly because if I go into Epiphone here it created a bill. And you're like, yeah, I didn't enter a bill. I just entered the beginning balance. Yeah, but I still want to bill even though it's not the actual bill I created in the prior accounting system because the next step is to pay the bill. And so the next natural step in the accounting department would be boom bill pay bill. And I want to be able to have that bill to pay. Notice that if I entered it with a journal entry, if I entered this with a journal entry, I would I might be able to apply it here. But it would be in the form of a journal entry, which doesn't easily tie out to the next step, which is for me to make a payment that ties out to the journal entry so the journal entry would be closed. I want the bill to be closed after we pay it. That's why we don't just enter it with a journal entry form, even though from just an accounts standpoint, that would work. It doesn't work with the next step in the accounting process. We want to use the form in that case. Let's look at the forms here or the financials run it to refresh it. So now we've got our liability account of accounts payable at 15,000. If I go into that drilling down, it made a bill form. If I go into the bill form, it's just a generic bill form that it made. The other side went into other miscellaneous expense, which is a generic expense account. So I'm going to close this back out and then so there it is other miscellaneous expense. I'm going to go back and so then the other side is going to wash out to net income on the balance sheet on the income statement, run it to refresh it. There it is. Now we've got this services income. I kind of wish they used to like sometimes they used to put it into uncategorized income, which I feel like would be a better category when they force this thing to happen. But it doesn't matter because they're on the income statement. They put the other side into other miscellaneous expense. But I'm not worried about that because it's in there as of December 2022. And I only want things to be correct as of January 1st, 2023. So all this data doesn't matter because the 2022 numbers are in my prior year accounting software, not the current year. I'm just adding the beginning balances. So if I change this to 010123, 123123 and run it, there's nothing in it. That's good. That's so I'm good to go going forward on the balance sheet. I've got this amount in net income now, which represents the invoices that entered with the accounts receivable and bills that we entered with the accounts payable. But it'll roll into retained earnings in the next period. So if I go from 010123 to 123123, it rolls into retained earnings. So our strategy is working in essence because my total equity here is correct. Everything's going to wash out to equity as of January 1st, 2023. And then I'll just make a journal entry for equity to be correct balance as of that day into the correct account, which I'll change the retained earnings to owner's equity and we'll get rid of the opening balance equity at that point in time. Now, again, if I go back to the income statement, if for whatever reason 010122 to 123122, you don't want this information on the income statement, even though it's in the prior period or whatever venue, of course, you could do a journal entry at this time. Once this has been recorded to just take it out of here and put it into the opening balance equity until we adjust opening balance equity. If you want to do that, you could do that by going to the plus button, journal entry. And then you could just take it out of the service items and put the other side into, you know, opening balance equity. In this case, you'd credit the miscellaneous expense account and you would debit, you know, opening balance equity as of 123122. But it's not a problem for us because it's in the prior period. So the worries are none. No worries. The worries are none for us. And so that's that. So we'll continue on. We've done some of the most difficult ones thus far that have these sub ledgers. So some of the other ones will be a little bit more easy to enter because we don't have to have that issue with these sub ledger problems.