 Here we are in our QuickBooks Online test company file. Remember in the primary two ways you can practice with QuickBooks Online, possibly for free is number one, the free 30 day trial, often offered by Intuit. Intuit being the owner of QuickBooks, which you can currently find on the Intuit website, I-N-T-U-I-T dot com. Then search for the QuickBooks software. I would normally then go all the way to the bottom of the page because although this sales page will change over time, they have had this footer quite static and constant over the years where you can then select the product of QuickBooks Online. This sales page being a bit more static over the years than the prior one and has had for a long time this free 30 day trial that you can toggle on. The other option you have going back to our test company file is to use the QuickBooks Online sample company file and you can open the sample company file while having your current company file open if you use another browser or we suggest using the incognito window. So now we've opened the sample company file with the incognito window. We have the two company files open at the same time. If you're using Google Chrome, you can open an incognito window by selecting the three dots in the browser, new incognito window, then search for QuickBooks Online, test drive, select the option that has Intuit.com because Intuit is the owner of QuickBooks in the URL. Okay, so now we wanna think about the flow chart for QuickBooks and the normal process for an inventory related company so that we can then deviate it or change it for the specific needs when we're dealing with a company that has e-commerce and another platform such as I've got like a Shopify store over here. So we have a Shopify platform where the actual sales are taking place. We're tracking some of the products possibly in another platform and that's gonna make it a little bit different than the norm of tracking inventory within QuickBooks if we didn't have a whole separate kind of Shopify platform. So let's jump on over to a flow chart over here. This flow chart is actually from the QuickBooks desktop version, but we're just looking at it to look at the flow of the inventory and sales as it goes to the cycle and the forms and the names of the forms will be much the same in QuickBooks Online. When thinking about a business that buys, marks up and then sells inventory making a profit from that profit margin, we can follow the flow of the inventory from the purchase of the inventory represented in our flow chart here in the vendors or purchases cycle to the point where that inventory is sold represented in our flow chart in the customers cycle, which you could think of as the sales or the revenue cycle. We're first gonna consider that as if we're basically an on-ground type of store because QuickBooks is basically designed for that type of setup and then we wanna think about what kind of modifications need to happen within the process when we actually have a virtual type of store and a lot of the logistics are being handled not in an on-ground type of situation but by a third party that we're gonna be integrating in. So how can we pull that information into something from like a Shopify or an Amazon in order to construct our financial statements? When thinking about an on-ground store that sells inventory following the flow of inventory, the first step of course is the purchase of the inventory which may but does not always start with a purchase order, the purchase order being a little bit unusual of a form because it doesn't have an actual financial transaction related to it and it seems a little bit backwards in process when we compare it to like our purchase personally of online stuff, for example. Like if I was to purchase something from Amazon personally, I have to pay for it when I request it and then they ship it to me. The purchase order is basically reversed where we have the power to be able to say, hey, I would like you vendor to ship me the goods that I'm requesting with the purchase order and then I'll pay you after I receive it. So it kind of depends if you have the capacity to request the inventory to be shipped before paying it. If you're using the purchase order, then we can imagine the next step, we've received the inventory in our store or our warehouse or whatever with a bill in it and if the inventory count matches the purchase order, we're gonna enter the bill into the system which will actually record the inventory at the time and then we'll pay for the inventory. When comparing this to an e-commerce type of situation, we might have a similar process for the purchase of the inventory but we also might have a third party platform helping us out with the logistics of purchasing the inventory and we may or may not be dealing with the actual physical handling of the inventory. So for example, if I look at a Shopify type of store and I was to list my products, the main goal of the Shopify seller is generally to logistically be able to have the number of units of inventory that they can be tracking so that they don't have too much inventory so that it spoils or it becomes useless over time and so that they have enough inventory so that they can fulfill the needs for requests of that inventory. That's kind of where the focus will be. However, on the bookkeeping side of things, we also need to think about not just the units of inventory but also the cost of the inventory so we can properly record in dollars, in dollar amount, not unit amount, the amount on the financial statement for inventory and cost of goods sold and because inventory prices kind of change over time, we also usually need to use some kind of flow assumption like a first in, first out or last in, first out so that some of the issues will kind of dive in to in future presentations. There's kind of easy ways to do that and there's gonna be more complex, detailed rates to do that and there's pros and cons of the different kind of ways we can be tracking our inventory. If we were tracking inventory within QuickBooks in an on-ground type of system, usually we would be setting up actually inventory items in the QuickBooks system so again, in a Shopify store, you're typically looking at the inventory units that you're gonna be putting into Shopify and then you have this issue or question of should you be pulling those inventory items into QuickBooks the way you might be doing inventory if you were working in an on-ground type of system? Many people would generally argue that maybe that would be redundant, maybe that's not the best thing to do because QuickBooks Online isn't really designed to be tracking inventory when you're looking at an e-commerce type of situation. It's a little bit redundant to track the inventory in both spaces and you can also overwhelm your QuickBooks file if you have a lot of sales by just pulling in all that data into QuickBooks when you may already have it somewhere else. So we'll dive into how can we pull that information then in, if you were selling it in an on-ground type of situation, then we would be, and you were tracking inventory in a perpetual inventory system, then we would be adding the products and services as we buy them into our products and services tab here. Okay, so let's go back on over to our flow chart and so then once we have the inventory on the books, the next thing that happens is we sell the inventory. Now, the sales forms in QuickBooks are gonna be an invoice and a sales receipt. So, and before I get into that in more detail, let me just, if we boil down the purchase of inventory to what happens on the bank account, at some point in time, of course, we're paying for the inventory. So we're gonna see the cash go out of the bank account with a check form, which you could call like an expense type of form. And if you have the bank feeds on, we'll talk about integrating the bank feeds.