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Here we are in QuickBooks Desktop sample Rock Castle construction practice file provided by QuickBooks going through the setup process we do every time maximizing the home page to the gray area going to the view drop down noting we got the hide icon bar and the open windows checked off open windows open on the left hand side reports drop down company and financial. Let's look at that P and L profit and loss with the range into the change in from 0 1 0 1 2 4 12 31 2 4 January to December customize it with the fonts and numbers so we can change the font to 12 so we can see it is that OK. Yeah it is OK. And then we're going to go to the reports drop down again company and financial take a look at the big balance sheet will change at this time with the drop down to this fiscal year customize it fonts and numbers changing it to 12 so we can see it OK. OK. Yes. OK. So that's what we do. Why did you do that so fast because we do it every time. That's the setup process that we do every time. We're going to look at some subsidiary reports remembering that these are the two major financial statement reports pretty much every other report we look at. We want to think of it as an expansion of one or multiple line items of these two major financial statement reports balance sheet income statement or profit and loss. This time we're going to the P and L we're going to the P and L profit and loss report. We're looking at the income line item that's us generating revenue. So that's kind of like the goal of the business is our revenue generation. I'm going to compact this looking at just simply all of the normal kind of income type of accounts condensed together. And now we're going to look at some reports that are going to give us more detail on this income line item. So how might that happen. How might they give us more detail. Well note when we put our income items here we typically record them in terms of what we are doing to generate the revenue. So we might call it just like bookkeeping revenue if we do bookkeeping or accounting revenue or something like that or we might sell something and just call it sales revenue or sales of inventory revenue or something like that. And we're trying to keep the income line items fairly not too many of them. You shouldn't have a whole lot of income line items because the general idea is that we're only concentrating on one or two things generally to generate revenue and everything else we're basically paying for. So we have a bunch of different kinds of categories of expenses but not many categories of income. Now notice you could add more categories of income but you want to be careful and understand how the subsidiary reports work because sometimes people get into the to the habit of creating a bunch of income accounts like for for their main customers for example and if you're using a full accounting system which will talk a little bit more about later you don't really want to do that you want you don't want to create an income account per customer because you can create subsidiary reports that will break out this income item by customer kind of similar to the subsidiary reports we saw for accounts receivable and accounts payable breaking out AR by customer breaking out AP by vendor. So the other thing that people tend to do is have too many subcategories by what they sell. So for example too many different service categories and just saying instead of just saying this is the services we provide or too many inventory categories that they put on the profit and loss again you don't need to do that if using a full service bookkeeping system because you want all that added report on the subsidiary reports rather than having it all muddying up your main central report here this should be kind of like the summary of the income line items. Okay so so now we're going to expand on that with the added two main kind of groupings you would expect breaking this out by customer breaking this out by item in other words inventory items sales items you could find those reports under the reports drop down we can go into the sales item which stands for like revenue and here's all the reports of that way or we could go into the report center let's do that now let's go into the report center let's maximize it because it unmaximizes every time which is annoying but that's okay we could do I could deal with that I could deal with that we're going to go to the sales on the left hand side here's our reports we got the sales by customer summary detail the sales by ship to address if applicable if you have inventory pending sales you got your grass and then you've got your sales by items meaning inventory items and service items the things you do to generate revenue you got the detail report on that and then if applicable sales by rep and so on so let's go to this first one up top let's go to the sales by customer summary open in that one up let's change the date range from 010124 to 123124 there we have it let's make it a little bit larger because we're going to spend some time on it customizing it fonts and numbers in it checking the font or changing the font to in it and then 12 in it and then yes in it and okay in it so there we go so now we've got the income broken out by customer which of course can be a quite useful report and we're trying to analyze our advertising or marketing who our best customers are and so on you could also sort it up top you could sort this one by total so now you can you could sort it by total possibly z to a so you got the big customers up top which would be a common kind of thing this is another report that we might in later presentations export to excel so that we can possibly create graphs and whatnot with this kind of report now here they have a lot of like jobs in this particular because it's a it's a job cost system which makes this report a little bit more convoluted because of that but so it might make the exporting a little bit more complicated we won't get into that in detail here but just note it might look a little bit more complex than a report would be if you don't have the jobs okay so then note if I go to the home page over here we kind of have to have an understanding of our accounting process to know how these reports will work we're looking at the sales cycle or accounts receivable cycle and remember we might have a cash basis or we might have an accrual basis and this could impact how these subsidiary reports will work with regards to sales so remember like if you have a system where you're waiting till something clears the bank like using gig work like you work for YouTube or something and YouTube pays you you wait till it clears the bank and then you record the deposit when it clears possibly with bank feeds that's fine but you're probably going to lose some of the added detail because the deposit form is not the form that is naturally used not designed to be used for creating increases to sales because the invoice and the create sales receipt are the two forms one accrual one a cash based method for that so note that if you go into a deposit form and you're imagining like you wait till something clears the bank feeds and you enter it the big feed will still typically have the name of of who you got the money from like YouTube or whatever and you can copy that and you want to copy that and put that into who you receive the money from here so that you can track that in some ways but you still might not be able to generate the same kind of subsidiary reports because again the deposit form isn't designed to be to be tracking the income line items so you could also have a system where you're on basically a cash based system but you're entering the information into a check register in that case you'd be using the create sales receipt form which of course is designed to be to be putting together the sub ledgers so it will be tracking the customers and and the items and so notice when I go into this form for example then of course we got the customer up top and we also have the item down below and so the item is another way that we can track by if you enter the stuff just into a deposit form you're not going to have the items and therefore clearly you're not going to be able to track a subsidiary ledger by item so just just a couple things to keep in mind now if I go back to the sales by customer report and we go all the way to the bottom this total down here you would expect should tie out to the total for the income line items on the profit and loss report in a similar way as the total of the subsidiary reports for accounts receivable aging reports for example should tie out to the accounts receivable so but it won't be exact in this case I don't believe 452943 and if we go here and we see it's 4546 so it's a little bit off and you might say well how can that be why is it off notice if you looked at the balance sheet and we looked at the accounts receivable has a sub ledger broken out by customer and it's almost always exact like it's not exactly why is that the case because every time we enter something to accounts receivable QuickBooks actually forces us to add a customer that's not the case with the sales items so in other words if I go to the home page here clearly if you use these two forms then it's then you're gonna you're gonna have the information that's gonna track and these if these were the only two forms you used you would be forced to have a customer your sub ledger would tie out however if you used another form to record revenue such as a deposit form and possibly didn't even add a customer or something like that QuickBooks will allow you to do that and that kind of thing will throw off your sub ledger reports you can also imagine if you went in and made an adjusting entry by going to the the company drop down and made just a journal entry if I made a journal entry to accounts payable for example it would make me have a vendor here if I made it a journal entry to income on the other hand it would not force me to have a customer and therefore I can record something and it'll throw off the sub ledger that's not necessarily a bad thing because sometimes when you do adjusting entries you don't want to enter it to a customer and then you're gonna reverse it and whatnot but that's just something to keep aware of because the sub ledger could be off and you can try to figure out why it's off what kind of income was reported or whatnot that wasn't using a customer and kind of see what the difference is so there's the there's the sales by customer report we might make graphs out of it in future presentations let's see what else we have in the reports we've got the sales by customer detail so if I go into the sales by customer detail now we've got it broken out by customer and then we got the stuff that we sold to them and of course the stuff that we sold to them is going to be in the form generally if using a full service system invoices and sales receipts again if you're recording income with deposits you probably not it's probably not going to show up on this report because this report is gathering the things that are recording sales that the system was designed to use to record sales sales receipts and invoices so I want to close this back out and then you've got the sales by ship to if applicable you've got the pending sales you've got a sales graph we'll still we'll make the graphs later and we'll talk about them later and then the other major category is sales by item item in this case meaning inventory item or service items the things that we sell in order to generate revenue from customers running that report gonna say tab 010124123124 on the range so there we have it now if you sell inventory items it's going to be a bit more complex of a report because now you've got the quantity the amount the percent of sales to cost a good sold and so on and so forth if you have just the the service items then it'll be a bit more easy of a report to read but these are going to be the the items that were that were sold broken out not by customer but by the things sold or the services sold so if I go to the profit and loss here we have then the PNL the PNL represents the category that we sold within service items inventory items for example and then we could break it out by customer who we sold them to which should come up to the same number in three or we can break it out more in detail about what exactly we sold not just service items or inventory items as a whole but which service items and inventory items and that's the attempt of this report given us that detail so so if we get to the bottom of this report we get to the 452-943-25 which should tie out to the 454 right here it doesn't because once again QuickBooks doesn't force us to tie those things out meaning every time we we hit the income account or an income account we don't necessarily have to add an item so if I go to the home page for example this is one where clearly if you use a deposit form such as in bank feeds to enter the data there is no items field in it right so there's no point there's nothing in here that tells you what you actually sold so if you use this then you want to make sure that you're saying okay well that may it still makes sense it's easier for me to use the deposit form if I'm in like gig work and I and I recognize I'm gonna lose some of the subsidiary data reports for it and I'm fine with that you that's the kind of decision-making you want to have or if you want those added detail reports then you're gonna have to use the sales receipt even if on a cash-based method because the sales receipt is the one that has the item tab down here which will track what you are selling and that includes service items so so it would be nice like in a full-service system even if you're on a cash basis even if you're doing service items to be able to track the different service items you know that you are having so that you could run those subsidiary reports which can give you a bit more detail but I mean it really depends on the particular industry that you are in as to whether that added detail is worth the added time if it's causing more data input issues so there it is so that's that report those are the two common reports that she can break them out by if we go back into the report center we got the sales by item detail so now you're going to get similar report with the detail related to it if you have sales reps then you can have the sales by the sales rep sales by sales rep detail