 QuickBooks Online 2023. Progress invoicing. Example 2. Record actual costs for month number 2. 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 noting 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 and switch the view down below. We're going to duplicate some tabs to put reports in like we do every time. Right click on the tab up top to duplicate it. As it's thinking I right click on the duplicate tab to duplicate it again. Back to the tab to the middle reports on the left hand side. We're going to be opening up the balance sheet as that's thinking. Tab to the right reports on the left even though it was done thinking that the computer thought really fast like computers do. But we're going to go to the profit and loss. Going to close up the hand buggy. Change the range and we're going to say this is going to go from 010125. Let's go to 06325 and let's see this on a month by month breakout even though there's not much in it thus far for the first half of 2025. We're going to go to the tab to the middle. Close up the hand buggy. Let's do this one from 010125 to 06325 and hit the drop down. We want to see this on a classes breakout. 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. Class by class and run it and there we have it. Okay so now I'm going to go to the first tab we want to go down to the projects and I'm going to look at project number two that's where our focus is remembering that in the past we started the project and we made an estimate and then we got a down payment. I'd first like to see this in Excel so now we're going to have actual kind of the job taking place costs for the job and I'd like to do that first in Excel where it's more transparent and then we'll put it into the QuickBooks system. So here's in essence what we did to calculate the estimate. This is basically our billing structure based on the estimate and now we're going to have actual time passing and actual expenses taking place. So I'm going to make I'm going to make it a little bit wider. I want to put some some columns between f and g so I'm going to put my cursor on column g I'm going to select on over I don't know like k that's about right and then right click and we want to insert. So now we've got all these skinny columns. I want to widen out those columns so I'm going to select from column e to column j not including that k because I want that to be a skinny and then I'm going to make these like the same width by just adjusting like this one so now they're all the same width let's make them a little smaller right about there that's about right okay okay and then I'm going to say this is going to be the actual actual job progress. I think we can fit it down at the bottom here without a big issue and so I'm going to say this is going to be black and white on the header home tab font group black white and let's say we're going to say that we actually start work on month number two I'm just going to say equals month number two and then we we're actually going to finish it out on month five so we so two to five we're going to finish this thing out and then then let's think about the actual costs so the actual costs let's bring this out a bit we could say break it out between up materials and labor and overhead head and then the total so I'll try to break it out like that and so let's go ahead and black and white this and center it as our headers and make this a little bit wider so you can see a space between these two headers and so I'm just going to kind of make up some numbers now for the actual expenses that are going to take place for month number two and then we'll continue filling out this table as time passes so we're going to say all right we had month number two materials let's say the materials were 7000 and let's say the labor is is 73000 and let's say the overhead is going to be then 3018 and I'm going to sum this up equals the sum of there's the 1318 is the total okay so now I have my actual costs and we can use those actual costs to try to figure how complete the job is and that's typically what we might do in like a revenue recognition concept if we have a longer term type of job to recognize the revenue based on how complete the job is so for example I could compare this number to the the actual revenue to I'm sorry to the actual costs that we project which is the 76 923 to see how complete the job is at this point in time so I could say this is going to be this divided by the total cost I'm going to make that a percent home tab number group percent to find it and I can add a couple depth decimals and I'm going to call this the percent complete percent complete home tab font group black and white let's make this a little bit wider for the percent complete I can add some more decimals then why not do that if it's wider like that so percent complete and then so the revenue revenue let's say revenue recognize or the revenue that we should recognize I'm going to pull all of this down so I can have a header right there I'm going to say just grab this and pull it down and I'm going to grab this and pull it down revenue to recognize or something like that is what I'm trying to say if I spelled it wrong that's not unusual for me because I spell stuff wrong sometimes you may have noticed that's just because the spellings wrong my spellings right the way that people say it should be spelled is wrong so in any case then we could say then the revenue that we should recognize if the the total revenue is going to be 100 000 times the 16 9 2 so on percent would be the 16 9 2 3 and so on so we'll get into this component of it later but if you think about this in the next presentation to actually record this but if you think about this and you're saying okay well if I'm trying to recognize revenue as we go well then I can say this is what we actually spent so there's where we stand at this point in time I'm have a percent completion based on the total expenses to compare to what I think the total expenses will be at the end of the job that's my percent complete and I can multiply that times the revenue that I'm going to be receiving to think about where we should stand with regards to total revenue at this point in time is the general idea so we're just going to record this right now and we'll think about recording the revenue recognition component in a following presentation all right so home tab font group let's put some borders around this now if I record this with just a journal entry in our little worksheet over here I can just say this happened on 228 and we're going to say that we had I'm just going to put it all into cost of goods sold because all of this is going to be part of the thing that we're making right the job that we're doing cost of goods sold the other side is going to go I'm going to say to cash checking account assuming we paid for the labor overhead and materials in practice of course we would have multiple things that we paid for materials or we'd have payroll or contractors that were paying for the work and then we'd have you know overhead things that we're going assign to it but I'm not I don't want to get into too much detail I want to focus on the progress invoicing and the time recognition thing so we're going to say this equals the actual total here and there's the debit and credit if I post this we're going to say this equals the debit and this up here I'm going to say f2 on the keyboard f2 plus f2 so I can scroll back down checking goes down we're negative on the checking so that's not good we're overdrawn we better collect on this soon but that's where we stand let's do the similar kind of process over here in uh in in the quick book software realizing noting that I put the cost of goods sold actually recognizing the cost of goods sold and then we'll recognize the revenue uh in a future presentation for that time period okay let's go back on over and let's say that we're in our projects now in quick books in our project number two where we left off last time and I'm just going to say we have an expense form and it's going to be for project number two actually it's going to the a vendor that we're paying I'm making generic vendor here and we're going to go through this and say this was what happened on 022825 and project two so it's pulling over the the data from the last from a from a prior expense form I'm going to delete this stuff and put in a whole new thing so we could see it being put in place so I'm going to say that we have materials that we set up the item for in a prior presentation and I'm going to put the materials on the books for what we said we said 7000 on the materials so all right 7000 materials I'm going to actually make it billable because I would like to pull the materials now over to the revenue recognition which I'm going to report on an invoice so and so I'm and I'm actually not going to give that invoice externally this is going to be for my internal revenue recognition and I'm going to make it 30% markup that's going to be the standard markup that that I'm going to be using now let me before I record this I'm going to delete this and just remind us that I turned on the billable items by going to the cog up top and accounting and taxes and then I'm going to go to the expenses here and I'm going to go to the bills and expenses and we have this I think they currently have it on by default I don't even think I turned it on this time it used to be off by default and you had to turn it on if you wanted to but I think it might have been on by default but in any case you want to have this on and then I've added the markup of the 30% because that's going to be our markup we're going to have our cost and then a 30% markup is going to be our standard markup that's just the way our billing processes I'm going to do something that'll populate automatically if I put that in place here and then I want it the track billable expense items as income that's generally the default that we would want but we're actually we're going to be applying we're going to be using items in conjunction so that'll be that'll adjust it a little and then charge sales tax I'm not going to charge the sales tax so we're going to say okay keep it there and then we're going to go back on over let's do it again boom s expense form this is going to be random vendor number one date 022825 I'm going to delete the stuff down here so I can re-enter it it's going to be materials materials we set up an item for it last time and I'm going to say once again this was 7000 I think 7000 billable 30 markup so the sales estimate comes up to that and then we're going to say the class is going to be class number two okay and then we have labor which I think was 3000 also billable and there's the markup this is going to be class number two and so then we've got the overhead which came out to some random number of 1318 so 13018 billable comes up to that so there's the total of the 2318 which seems high let me check it out again k-pa so 73318 7 3 this should be 3 3018 not 1 3 okay there's the 1318 so there's the 1318 and that 16923 is going to be the revenue that we recognize so if I pull out the trustee calculator and we go back on over here I can see that that's going to be what's going to pull into the invoice from this item which will be 9100 plus 3900 plus 3923.4 there's that 16 that's 16923 so that looks good we'll do that next time but that link is something that's going to be kind going to be important for our revenue recognition kind of recording if you don't you do it that anyways so let's what's this going to do it's going to reduce the cash account and the other side is going to is going to be going into the cost of goods sold driven by the items that we set up we didn't use the categories we used those items that are going to cost a good sold so let's save it and close it and check it out so now we have an a cost to good sold in our project that showed up this is basically the project is kind of like an income statement showing us the income statement performance accounts and then if I go to the balance sheet now we've got the checking accounts if I go into the checking account it's going down for the expense form that we put in place scrolling back up and back to our report income statement is the other side if I run the income statement then notice that I've got the expense which is happening now in February and that's the timeframe that we actually paid for the stuff so we're kind of and hopefully that's the point that we're kind of consuming it we're saying we're thinking in order to to make the whatever we're doing in the long project and then we're going to match up the revenue I'd like the revenue to match up in the same month right so if this was my cost I'd like this revenue to match up in the same month which is what we'll do next time we can also see if we saw the profit and loss by the way for the whole a year 010125 to 123125 and I break this out by classes now you can see our income statement job reports that are basically redundant to the classes but you get a nice job by job this way by using the classes and then you get a and then you get a total for all of it which is quite useful and if you assign everything and cost a good soul to a class it also gives you this non-specified item which is great because that tells you it didn't get assigned to a class so let's go into that I'm going to say there's a problem here that didn't get assigned to a class I'm going to go into that and say class to fix it then fix it it's bokeh it's bokeh so now I'm going to say all right let's go back on over and run it so so now we've just everything's in class one or class two for our two jobs which is a little bit different than our report over here because if I look at my my project reports I usually see a profitability you know just for one job or I can look at a project report this way duplicate tab and go to reports on the left hand side and project project profitability summary from 010125 to 123125 and run it running so you get this nice little breakout but it doesn't give you the full detail so this is kind of nice but you get this nice breakout here and then if you use the classes you also get some of the balance sheet accounts if I run the balance sheet accounts for the full year 010125 to 123125 I can see some not the checking account but the billing's account is breaking out by class and that can be useful because I would like to see what's in the billing's account on per job you know and so I can see that either this way or I can actually go into that billing's account and I can sort this area by customer and that'll break it out if I had more than one activity in the billing's account here it would break it out by billing's and I can see the subtotals this way as well so so there's a couple different ways we can find the same information but I think that redundancy is actually useful okay that's enough next time we're going to go into recognizing of the revenue for that for this month