 QuickBooks Online 2023. Progress invoicing, example number two, invoice client, receive payment and record expenses for month number three. Get ready to earn the skills needed to boost your bank books on up with QuickBooks Online 2023. Here we are in our QuickBooks Online test company file. We started up in a prior presentation. Remembering that we're in the accounting view as opposed to the business view. You can toggle between the two views by going to the cog up top. Switch the view on down below. Duplicating some tabs to put reports in like we do every time. Right-click in the tab up top to duplicate it. Right-click in the duplicated tab to duplicate it. Back to the tab to the middle reports on the left hand side. And we want to open up one of the faves that being the balance sheet report as it's thinking tab to the right reports on the left. This time the profit and loss report closing the handbook. Range in the range 010125063025. Let's make this month by month on the breakout and run it. So this is what we have recognized in February. Let's go back. Support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website. We're 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. To the prior tab and close the boogie and change the range. We want this one to be going from 010125 to 0632 and let's see this one by class and say run it. Let's go to the first tab. Let's go to our projects on the left hand side and we're in project number two. So if I go back to our Excel worksheets just to recap what we have done thus far we had an estimate that we made. We build the client for the estimate we for the 10,000 I'm sorry we build the client for 10,000 down payment on it. And then we figured our expenses for the first month that we worked or month number two. And we recognized the revenue so that we had that nice matching of the revenue and the cost of goods sold as we can see over here in our month by month breakout which happened in February. So now we're going to bill the client. Let's do that in Excel first and we're billing according not to as we do the job but rather we're billing in accordance with our schedule that we came out to. So we said we're going to bill you client based on our pre arrangements and so now it's going to be month number three. We're going to bill you 25,000 we're still have our estimate up to the 100,000. So we're going to say alright from a journal entry standpoint straightforward which is going to say bill in the client 31 this is going to be equal to the 25,000 that we're going to hold on a second. This is going to be equal to the accounts receivable account for the amount of 25,000. And then the other side is going to go to the other side is going to not go to revenue because we're recording revenue according to our calculations over here but rather we want it to be going to the billions account. And this is where it gets a little bit tricky in QuickBooks. Alright so we're going to do that. Alright so let's go back on up and say that we've got accounts receivable. There's something in it even though it's zero so I'm going to double click on it go to the end of it and say plus that 25,000. And then in the billions I can also do that there's something in it in our six coming to say F2 plus F2 and then 25,000 on the billions. So it goes up to the 35,000. So that's and that allows us of course to send the invoice out to the client and hopefully receive payment on it because obviously the invoice is the best form to kind of turn over most of the times to get paid on the invoice. So if I do that over here we could say let's how can I mirror a similar kind of process we can go drop down let's do an invoice this time I'm going to pull in the invoice from the estimate. And so I'm going to use my progress invoicing tool and add this on in but I want to do 25% of the invoice according to our billing schedule and I'll say copy it over. And close up the handbookie and then it pulls in nicely and gets each line item shows nicely each night line item for the client and everything. And so this happened on we're going to say 3131 so that everything looks good. But this will increase the accounts receivable, which is what we want. But the other side is going to go to the revenue accounts driven by these items, which is not what we want. So I could like replace these items with it with another item that takes it to the work in progress. But I kind of like having the items here. So what I'd like to do then is basically redo make it so it's not going to go to the revenue account and instead we want it to go to the billions account is the general idea so I could make an item that's going to reduce revenue. So all of these items went to that revenue account this is going to bring it back down for a negative of 25,000 class number two. And so that brings it back down to zero and then I'm going to put it where I want which is the billions account, billions account. And I'm going to put it back in 25,000 into the billions class number two. So what this what this does it's a little bit tedious because now now I'm going to have the revenue accounts recording increases by these amounts and then a decrease and then it's going to go to the billions account. But on the plus side, it pulls in all that information from the invoice quite nicely from the estimate I mean into the invoice so that the client can see kind of like the detail of the line items of the invoice quite nicely. And then these two amounts hopefully don't bother the client much that we can basically just tweak the journal entry for our internal reporting purposes and then I can still send the invoice to the client just as we normally would and you know receive payment on it from the invoice. So what's this going to do it's going to increase. It's an it's an invoice so it's going to increase the accounts receivable by the amount down here. The other side would have gone to revenue because of these line items and still will, but we're going to reverse it back out of revenue for with this line item and instead increase the billions account. Okay, let's save and close it. Check it out. Check it out. We're going to go to the reports. And so now we've got the reports over here accounts receivable is going up so the accounts receivable went up. So so there is that and then it's kind of interesting the way it broke out the project and the total for total for customer to here because I broke this out by customers. That's not what I wanted to do. I wanted to break it out by classes. That's why it looks funny to me. Okay. All right. So there we go. So then it went to accounts receivable which isn't going to be specified by the classes. Okay. And then the other side though went to the billions which is specified by the classes. So that's quite nice because now if I have multiple classes I can see the breakout with this class structure and of the billions. Okay. Tab to the right. If I run this one we did not record any revenue related to it which is what we want because this tool was used just for billing purposes so that we can increase the accounts receivable and we put the other side into the billions. And now let's imagine that we receive the money. So if I receive the money from a journal entry standpoint it would just be okay. Then it would let's say this happened on three fifteen cash would go up. They're going to pay us because we sent him a nice invoice which is easy for them to figure out and deal with. And so they're just going to pay us that twenty five thousand which is great. There's our debit and credit checking accounts going to go up. I'm going to put my cursor in R3 F2 on the keyboard plus F2 scroll back down pick up that twenty five thousand. So there it is. And then the other side is going not to revenue but accounts accounts receivable. I'm sorry that the other side is going to accounts receivable. So we're going to say double click on it plus nothing fancy nothing tricky is what I'm trying to say that wasn't an unusual thing for to be happening. All right. So there's the other side going to accounts receivable. Let's go ahead and go back on over here and do it in our accounting system. So we're going to say that's going to be a receive payment form receive payment and project to it's going to happen. We're saying on three fifteen that we're going to get the payment. OK movie B to the end. And then we're going to say check that off and that should just receive payment reduces accounts receivable. The other side going into the good old checking account. No I problem a tab to the right. Run it. So checking account is going up accounts receivable goes back down. And if we just compare our balances we got twenty one thousand nine eighty one eighty two in our checking account. And twenty thousand nine eighty two sixteen nine twenty three forty sixteen nine twenty three rounded thirty five thousand sixteen nine twenty three. So sixteen nine twenty three thirty five thousand net income three nine oh five three nine oh five three nine oh five. Everything's matching up as it should. All right now let's say that we have our expenses that we're going to do for the next month. So expenses for March in this case. So I'm going to do the same thing we're going to we're going to just make up kind of our expenses numbers here. And so that the expenses are going to be let's say ten thousand this time for the materials. And then I'm going to say that it was nine thousand for the labor. And we're going to say it's five twenty seven for the overhead. If I sum that up that's going to be for a total of nineteen five twenty seven. Now if I if I say well how how come what percentage of that is to the total to my total expenses. That divided by the total expenses that we're projecting seventy six nine twenty three. I'm going to copy the formatting here to percentify it. It's been percentified and decimalized with a percent and a bunch of decimals. And then I can save my revenue then that we'll do next time is the one hundred thousand times that that I would like to basically recognize because that's how done we are at this time. But right now we're just going to record the expenses these items. All right so let's do that. So go back on over here and we'll go to first tab drop down expenses expenses. This is going to be for project or that we're going to say for our one vendor just generic vendor this happened. Well let's put this on the thirty first all of our expenses. We'll just record here. I'm going to delete them so I could just re enter them so we can check it out. So the first one's going to be labor which we said was ten thousand ten thousand. We're going to make it billable so I can then pull it into the invoice not so we can send the invoice to the client but so we can recognize the revenue on the invoice. And we'll do that next time thirty percent markup because that's our standard markup. And then the class is going to be class number two. And then we'll say that we've got the labor labor is going to be nine thousand. I think it was if I'm not mistaken and I rarely am mistaken actually I'm mistaken quite often but still I like to anyways overhead. Overhead that was that was five twenty seven five two seven five two seven OK class number two. All right. And then when we pull that over into our invoice for revenue recognition we'll do next time it'll come over at the thirty percent increase. So thirteen thousand plus eleven seven plus six fifty eight ten twenty five three fifty eight. And that should twenty five twenty five three eighty five. It's backwards. I think I just put it in the calculator back. Let me do it again thirteen thousand eleven seven hundred six eighty five six eighty five. And then if I go back on over here we have it twenty five three to five OK OK OK it's good. It's still good. So what's this going to do it's going to increase it's going to decrease the check in account the other side is going to be going into the cost of good sold because that's where all these items are directed. So let's go to save it and close it and check it out. If we may running the report we've got the checking account is going down. No I don't like it when it goes down on the checking account. But then the other side is going to go to the income statement income statement running it on a month by month breakout and we could see it's now been applied to March. So now we've got March of the expenses. And next time we would like to recognize the rivet the revenue not for the twenty five thousand that we build but rather for the related revenue in our kind of like percentage of completion kind of concept over here as we go. So that's what we'll do next time. Let's just remember we got this month by month breakout also if I break this out from twelve three one two five and run it. Then we can break this out by class because we broke it out by classes too. And so now we've got these two classes which is quite nice of a breakout and we've got the projects so I can break it out by project over here where we can see basically an income statement per project. And also again the classes kind of help us out if I look at the balance sheet for example to twelve three one two five to twelve thirty one two five. Also help us out to track these work in process accounts the balance sheet accounts by by job so that's that's could be could be useful as well. And we'll see that coming into play when we finish the job. So we'll continue on next time recording the revenue for March.