 0. Accounting Software 2023. Record receipt of inventory with bill linked to a PO or purchase order. Get ready to be an accountant hero with 0. 2023. First, a word from our sponsor. Well, actually these are just items that we picked from the YouTube Shopping Affiliate Program, but that's actually good for you. Because these aren't things that were just given to us from some large corporation which we don't even use in exchange for us selling them to you. These are things that we actually researched, purchased, and used ourselves. Focusrite Scarlett Solo Third Gen USB interface with software suite. I've been using a Focusrite for years for my audio needs before which time I had a USB microphone which plugged directly into the computer. But I think you'll find as I have found, if you want to increase the quality of your microphone, you will need an interface and the Focusrite is the go-to interface as far as I'm concerned. I've been using this for years now. It works well. It's easy to use. It seems quite durably built because I only do the screen recordings. I only need the one Solo interface. However, if you have multiple microphones you need to plug in or if you have other instruments you need to plug in, you can look at a similar model that has more input ports. If you would like a commercial-free experience, consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com Where we have many different courses, you can purchase one at a time or have a subscription model giving you access to all the courses. Courses which are well-organized have other resources like Excel files and PDF files to download and no commercials. Here we are in our Custom Zero homepage. Going into the company file, we set up in a prior presentation. Get great guitars. We're going to duplicate some tabs to put reports in like we do every time. Right-click in the tab up top so that we can duplicate it. Right-click in that duplicated tab and duplicate it again. Back to the middle tab. Accounting drop-down. We want the balance sheet report. Tabbing to the right. Accounting drop-down. This time I'm picking up the comparative income statement. If you don't have that, you can take the normal income statement. We made the comparative income statement in a prior presentation so that we can compare January and February as we see here. We're currently working in the month of February, which I'll try to remember this time. Let's go back to the middle tab and go to the drop-down on the date. We're going to customize that date, bring it on up to 2023, the end of 2023 and update the report. Back to the first tab. In prior presentations, we entered a purchase order. Now we're going to imagine that we're receiving what we ordered inventory, in our case guitars, in a big box that's showing up and it has a bill in it. Let's just take a quick look at the flow with a flow chart here. This is a screenshot of the desktop version flow chart. We're just using it for a normal accounting cycle flow chart, which will be similar for most accounting type processes. So we're looking up here at the vendor cycle or the purchases payments cycle. Whereas at the end of the cycle, we would expect money to be going out in order to be purchasing goods and services that we're going to use to help us generate revenue in the future. In this case, we're going to be buying inventory. We started that process with a purchase order, which we said last time is a special form because the purchase order isn't actually recording anything because we didn't get the inventory. We haven't paid for the inventory, which is different than when we buy stuff on like an online platform where we have to pay for it at the point that we order it here. We didn't pay for it at the point that we ordered it and therefore no transaction. Then we're going to receive the inventory. When we receive it, it's going to have a bill in it. We want to distinguish the idea of a bill in the box of inventory, the physical bill from what a bill form is when we enter a bill form into our accounting software into zero. The physical bill is a broader term. We could pay the physical bill with just a check, for example, a money out form, right? However, we also could enter it in the system as a bill and the system entering it in as a bill means that accounts payable is going to go up. That's what we're going to do this time. We're going to enter the bill into the system, increasing the accounts payable. So let's do that. Going back on over, we can track the, we can imagine we have the box of guitars. We can say, did we order those guitars? Well, we can hit the drop down up top and say, let's look at our purchase orders here. And we can go and say, do we have any approved and open purchase orders that have not been fulfilled? We do. We have one for that new vendor. We set up Fender, the new vendor. We can also, if we see it came from Fender, go into the contacts over here, of course, and go into the contact of Fender, which is that new vendor that we set up in a prior presentation. We can go into that and see the detail thusly. But oftentimes I like, I think the normal process would be, we're going to go into the business drop down, go into our purchase orders, tracking the purchase orders, tracking the approved purchase orders. And then when we get the bill, we could select this item. And if there were multiple items, we can select multiple items and copy them over to, most likely the next thing we're going to copy them over to is the bill. Now note that if we made this purchase as we did here for a particular customer, we can also copy from here over to an invoice as well and turn around and sell this going to the sales side of things as well. And of course, we can make another purchase order if we are ordering a similar kind of product. We're saying we like that one. We want to order another one. And so we can hit that one again. So we're going to close that note. You can also go into the actual purchase order and you'll see that option here as well options copy to and so we can copy it over that way. If we paid for it, I'm going to go back and we did not do that, that process. Then we can select this item here and say it was billed, meaning I can just physically move it over to the bill. So if I manually entered the bill and I didn't use this to copy it over, then I can go in here and say it was billed moving it from the approved to build. But I'm going to go ahead and select this one and copy it to a bill. So we'll say we're going to copy it over to a bill. And then as I do that, it's going to mark the purchase order as full fully billed, meaning it's going to move this over to the build tab, which was over here. And so we're going to create that and say that's what we want to do. And so so now it's moved it over from approved to build. And now if I want to take a look at the bills, I can go to the business drop down and go to bills to pay bills to pay. And it moved it over here as a draft. So if I go up top, I could see my drafts up top. So if I go into my draft, there is the draft. So now I have the option I could select any drafts that I had if I had more than one so that I can submit for approval or simply approve it. So if it was a draft, we can put it if we had a process to say it's going to wait for approval and then approve it or we can go directly to the approval. If I want to go into it, then it'll open up the actual bill form that was created from the purchase order. So here's the it's just pulled in the line items from the purchase order. So now this is a standard bill type of form. So the new vendor fender and we're entering into the system on June 20th. Let's actually change that's today's date. So I'm going to change the date back to let's make it to February February 22. So that's going to be in our practice problem. And then it pulled over the item, which was the squire and the billable item. So that looks good. Now this is a bill. So what's it going to do if we approve this? It's going to actually record it to the financial statements increasing the accounts payable for the total three thousand three sixty. The other side going to inventory. The sub ledger for the accounts payable will reflect who we owe the money to fender the new vendor and the inventory sub ledger will reflect the increase in the units as well as the dollar amount of the inventory. We purchased just in this case twenty squire guitars. So we could again go to the drop down and say approve it or we could save it over here, save as a draft and so on. I'm going to go right to the approval and approve this. And so now if we go to our business drop down and we go to the we go to the bills to pay. We have our bills to pay cycle. It's been moved from the draft to awaiting payment. So now it's in the system awaiting payment. Now if I see the transaction recorded up top, also just note that the reference gives you a nice reference of the purchase order here that we started that was populated to make the bill. So but if I go to the if I go to my balance sheet and say what happened? A key in the balance sheet. What's happening here? We've got the accounts payable. Let's go into the accounts payable and we will see. We'll just see what happened. So here it is in the accounts payable. Now note here. I also have this transaction that was recorded in June instead of January. It should have been January 9th, not June 9th. I'm going to try to adjust that at this point in time. So if I go into this item here and say if I want to edit it, notice it won't let me edit the date. So if I go into this and say I want to edit it, you know, it's not letting me edit the actual date. So what I'm going to do is then remove and redo this item. So this is I'm going to remove and redo. And so I'm going to say, okay, here is the bill. The account transaction has been removed. You can now redo this transaction by going to reconcile by your adding payment. So now we've got the payment that's going to be made here and I'm going to redo it on January 9th, January 9th would be the proper date. I believe and paid from we're going to say the checking account reference number by check. I think it was one oh one one. I think it was hopefully I've got the check number. So now I'm going to add the payment. I'll just add it back in here. The next available number was this. I'm still would like it to be one oh one one. So I'm going to change that one oh one one has been used. All right. I'm going to remove the number altogether. No check number then. So we'll save it and let's actually I'm going to close this back out and not do a check number and then add it. Okay. Hopefully that doesn't mess up the whole thing. So now let's go back into our balance sheet again. So I'm going to go into the accounting drop down into the balance sheet and check it out again and see hit the drop down custom date two thousand twenty three. Okay. Update. And so then if I go into my accounts payable I shouldn't have any dates beyond February. Right. I mean come on. It's only been two months. You can't be working in the future. Okay. So I think that is looking good. So hopefully that is good to go. Okay. All right. So let's go back to what we were doing here. We're going to go back to the balance sheet and the other side we had a bill that was increased. So we had the bill increasing there and then the other side goes into the inventory. So we have inventory now. Let's go into the inventory and check that out. Opening it up drilling down on the data for the inventory and scrolling down. We have then the Fender. So here's the payment that was made and the reference of the purchase order is showing. That's nice. So that looks good. Okay. And then scrolling back up top no impact on the income statement as of yet because we haven't yet sold the inventory. There's going to be a sub ledger for inventory. Let's go to the tab to the right right click on it and duplicate it and then and then check out what happened to the sub ledger for inventory. So we'll hit the accounting drop down reports. And I'm going to type in up top inventory inventory list. Check out the inventory item list, which now should have going up for the Fender new vendor inventory items that we have been purchasing now. So we've got the units over here. This is the new one, the squire, I think. So we've got 40 units, 10,000 224 on the inventory that should tie out to what's on the balance sheet at the 10,000 224. Now, of course, again, if I go to the first tab now, we can see that we paid off the purchase order. So if I hit the business drop down purchase orders are now nothing is awaiting. It's been moved over from here to build. Now we're tracking the bills that are outstanding. So if I go bills to pay. We are now seeing that we have that one outstanding to pay in awaiting payment. We can also see that by going to the contacts drop down and take a look at what is happening in Fender. That new vendor that new vendors got a lot of action happening over there with Fender. And we can go into that and then we can see that we had the purchase order bill approved. And that's what we have awaiting payment at this point in time. All right, let's go on over and open up a trial balance and see where we stand. So let's go to the accounting drop down reports and open up a trustee trial balance. We'll just type it in there to open it up if we may type it in trial balance. And so then we will go in and say this is going to be for to custom date. Let's do a custom date 2023 trial balance, the end and update. So this is where we stand. If your numbers tie out, that's great. If not try changing the date. It might be a date range thing. If you tied out last time and don't this time, the things that we have changed this time was the accounts payable. We changed the accounts payable and the inventory has changed. So if those are off, those are the things you would think might be off. If something went wrong, you can click on them, drill down on the information and change the date range, which is often the issue when we're talking about practice problems working in in the past or in the future. Whatever we're doing with practice problem because the dates are different than real time. And we'll see you next time.