 QuickBooks Online 2024, create reports after second month of data input. Get ready and some coffee because we don't accept excuses about being too tired unless someone like forced you to carry two tires or something in which case you've been too tired against your will. First, a word from our sponsor. Actually, we're sponsoring ourselves on this one because apparently the merchandisers they don't want to be seen with us. But that's okay whatever because our merchandise is better than their stupid stuff anyways. Like our crunching numbers is my cardio product line. Now, I'm not saying that subscribing to this channel, crunching numbers with us, will make you thin, fit, and healthy or anything. However, it does seem like it works for her. Just saying. So, subscribe, hit the bell thing and buy some merchandise so you can make the world a better place by sharing your accounting instruction exercise routine. If you would like a commercial free experience, consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com Here we are in our Get Great Guitars 2024, QuickBooks Online Sample Company file. We set up in a prior presentation, opening the major financial statement reports like we do every time. The reports on the left in the favorites. We're going to be right-clicking on that balance sheet report so we can open a link in a new tab, right-clicking the profit and loss to open link in a new tab and the same with the trial balance. Let's tab to the right, close up the hamburger and do a range change up top. We're going to be going from 010124 tab, 022924 tab. Let's see it on a month-by-month breakout and run that report. Then we'll tab to the right, close up the hamburger and do the range change again going from 010124 tab, 022924 tab. Then I'd like to see that on a side-by-side month-by-month breakout running the report. Then I'm going to tab to the right again, close up the hamburger, do a range change going from 010124 tab, 022924 tab. See that side-by-side month-by-month and run that report. Let's go back to the balance sheet now. We've done two months of data input at this point in time. We're still going to be doing some adjusting entries in a future course or section but at this point, let's see what we have constructed remembering that the major goals of the bookkeeping process is number one, the end result, creating the financial statements, balance sheet and income statement from the data input reports that are populated with the help and use of the forms and number two, communicating with the various people that we are doing business with such as customers, vendors and employee making the logistics of the process as easy as possible, that typically done with the centers on the left-hand side sales center or customer center, vendor center or expenses center and the payroll center or employee center. So as far as the financial statements go, the major two are of course the favorites of the balance sheets and the income statement otherwise known as the profit and loss reports remembering that all other reports are typically giving more information about one or multiple line items on these two major financial statement reports the balance sheet and the income statement. So also just realized that a lot of the variance of the reports that you might be generating and looking into providing to a client or supervisor are often variance of these two financial statement reports typically working off of comparisons such as now that we have two months of data input having a month by month comparison as we have in this format and if we had two years of data input, we can do a year by year comparison we can compare the year to date of the prior year to the current year we can compare the current year to the prior year, the current quarter to the prior quarter so you can see that just with the comparative reports of our major two financial statements as time passes we can come up with a very large number, almost an infinite number of comparative type of reports if we get really detailed on it so even though we're working from the same route just the balance sheet and the income statement we really have to kind of think about what kind of reports we want to be grouping together and then providing to a client on a periodic basis possibly monthly, possibly yearly because the presentation of the reports is like half the battle often times for the bookkeeper and the accounting department because you're often giving these reports to people that don't understand the accounting process and often times don't appreciate it much either so you have to kind of convince them that it's worth looking into until everything hits the fan at the end of the year and then they all want your help at that point in time so you basically want to make sure that everything is kind of neat and ready throughout the year and so that they can roll their eyes at you or what not but you still have everything lined up and then at year end you'll be there to hopefully have everything run smoothly is the general idea alright so let's take a quick look at the balance sheet just recap some of the accounts that have been impacted as we've gone through the year here and look at our major financial statement accounts so balance sheet is going to be just simply the assets equal the liabilities plus equity this is the accounting equation and we started out by getting assets of cash in order to invest in the furniture and equipment and before we had any money from customers we had to start off with a loan from the bank and or equity from us the owners some kind of owners equity so that we can buy the equipment in order to help us generate revenue in our case that being the store the furniture and then the guitars and what not which are the inventory that we sell and then we went through our normal business then we can go through our normal business cycle after that point in time into the checking account if we go into the checking account remembering the checking account is the lifeblood of the organization so we will see more types of transactions in the checking account than any other account and typically we will also have more transactions in total in the checking account than any other account so it can look a little bit intimidating most of these are going to be some form of check form and deposit form meaning this form right here is an actual check form this is another type of check form that was specifically designed as a bill payment form to indicate that it's the second part of the process of the accounts payable process paying off the bill and then this is a payroll check form so similar just a check form decrease in the checking account but it has a payroll check all these different kind of names for basically types of checks or electronic transfer decreases to the checking account are useful if you know what they mean because then just by looking by the transaction type you get an idea of what is happening they can be harmful in some cases because they provide a little bit more work if you want to filter which you often do by transaction type so if I want to filter by transaction type I have to then select the various types of checks if I want to look at all the decreases so if I want to look at all the decreases there's I have to make sure to pick up all the different kinds of checks to see those decreases instead of just one form which would be a generic check form so let's look at the next one then we have the accounts receivable that represents the accrual account it would only be there if we had the accrual account meaning we issue invoices instead of just sales receipts meaning we're not working solely at a cash register typically but rather doing the work first and then having to track the accounts receivable which you will recall has a sub ledger to it which will break out this information by customer I won't open it now because we've seen it a few times but if we go into it here we can see the impact on the accounts receivable is that it goes up with invoices and down with payments that's all we expect to see happening in the accounts receivable if I go back on out we then have the inventory assets noting the inventory is something that we tracked here perpetually within QuickBooks having a sub ledger breaking out inventory by item that would tie out to this number but you could also use a periodic inventory system if you so choose if I go into the inventory account you can see that it's going to be impacted with the decreases from the sales form sales receipts and invoices and now that we have the first beginning balance is set up it's going to increase when we buy inventory we buy inventory with bill forms or check forms or expense forms going back out we then have the investment account which was an account that we talked about more last period that typically isn't part of our normal accounting process possibly a place where we park some money for a temporary period of time the payment to deposit account a clearing account which used to be called deposited funds is that account that helps us to group the payments we receive from customers in a format that helps us to group it into the checking account in the same format as will be on the bank statement if I go into that one you can see that it's going to be the sales receipts are increasing it as well as the payment forms the payment forms here these are the forms where we receive the money from the customer sales receipts at like a cash register for example and the payments being our receipts after we invoice somebody and then we make deposits decreasing this account and putting it into the checking account this account helping us to group our money if there's money in this account constantly and it doesn't zero out then you probably have a problem something went wrong with this clearing account prepaid insurance is an account when we paid for the insurance which by definition is something that we paid before we do the work therefore we put it on the books as an asset and we'll depreciate it that's an accrual concept thing which we'll talk more about in the adjusting entry course or section and then we've got the fixed assets also a similar kind of accrual thing this one being one that even small businesses can't typically avoid because the tax code will force you to put information on the books for the fixed assets noting that if I go into the fixed assets however there's going to be far less transactions in here than in say the cash accounts or even the accounts receivable account because we don't buy equipment that often so although it's kind of a pain that we have to do this accrual thing with the property planting equipment and track accumulated depreciation instead of just on a cash based system it's not too difficult if we keep things organized from year to year because there's not many transactions in this account going back on out we then have the accumulated depreciation which we'll talk more about in the adjusting entry process course or section and then we have the liabilities we've got the accounts payable like the receivable it has a sub ledger which tracks information by vendor who we have money to many small businesses may not have an accounts payable because you might just pay the bills as they become do possibly with the help and use the bank feeds but if you enter bills then you're going to have the accounts payable they go up accounts payable goes up with bills and they go down with the bill payment a type of check form that's the only thing that happens with accounts payable those two things it goes up goes back down and then we've got the visa card which we haven't done much with acts like a checking account except that your liability goes up when you buy things with the visa as opposed to the checking account asset going down we have the sales tax so these were the sales tax accounts they're going to be going up when we have sales type forms if we're subject to sales tax driven by the items the sales forms being the sales receipts and the invoices and then they're going to go down when we pay them with a usually it's going to be another special check form but we did it with an adjusting just a normal check form because we had our practice problem we had to work on and we had we we can't write a check because we're working in real time and then we've got the the loan payable account so the loan payable once the loan is on the books which is a transaction that doesn't happen all the time it usually happens when you purchase things like equipment then it will be fairly routine if you're paying it off because it's an installment loan right then you're going to be paying every month and that payment will be somewhat routine although and just a check form it's just going to decrease although the allocation between principal and interest can be an issue that we discussed a little bit in the past and will continue to discuss when we get to the adjusting entry process course or section and then we had payroll liabilities if we're processing payroll within QuickBooks then the payroll liabilities will be tracked as we process the payroll whenever we have a paycheck a special kind of check will create this liability and then we'll pay off the liabilities whenever we need to sometime after we process the payroll and that will be a special check form usually a a check for payroll liabilities if you're using a payroll widget the unearned revenue would be like a money you got from the client that you haven't earned as of yet it's back down to zero for us and then the equity section the equity section not something that we typically post to once the account is all set up because we're not hopefully putting more money into the business which is represented by the investment which would be similar to a capital account if it was a corporation and we're no longer using the beginning balance account at all and then the owner's equity account should we don't even let us drill down on it we don't post to it typically because it's the account that the income statement rolls into what might happen in equity going forward and all you hope to see happen will be that you take draws out which we'll talk about when we get to the bank reconciliation point in other words we're no longer putting money in properly once things are rolling the business is accumulating revenue and accumulating cash due to that revenue and then we're going to be taking money out of the business for personal use in the form of draws if it was a corporation it would be in the form of dividends so we can see here then if we minimize everything here's my assets here's my liabilities here's my equity I'm going to format the accounting equation from assets equal liabilities plus equity which is a format that we as accountants like because you can see two sides of the coin you've got assets that's what the company has and this is just the other side of the coin who has claim to those assets the third party liabilities and equity assets equal liabilities plus equity but from a finance perspective minus liabilities equals equity 230 366.55 minus the 825 16.26 equals the equity 147.850 that being like the book value of the business which we can't really just say I have 147.8 in cash because we don't have cash you'll realize if we look at the assets it's not all cash most of it will not be cash we have a significant amount in this case but most of it generally will not be cash but if I was to liquidate the company in theory if I could sell everything for 230.366.55 then I can pay off my liabilities and I would have 147.850 in cash after liquidating alright let's take a look at the income statement if we go to the income statement now the income statement when I format it month by month gives us January gives us February and the total why because the income statement is cumulative it goes up in time and then it's going to reset on a yearly basis because that's how QuickBooks works in other words net income will roll into the balance sheet on a yearly basis so up top we have the income we broke out the different income categories as the sale of products that's the sale of our guitars no team that we didn't break out the income by customer I'm not going to make another income line for every customer you might do that sometimes if you had like gig work or if you have YouTube income or something but if you're using sales forms invoices and sales receipts you typically don't want to do that you can make a subsidiary report breaking things out by customer breaking revenue out by customer so we're breaking it out by product now we didn't break out every product either I didn't list out every guitar we sold but rather we said this of the general products that we sell and then we can break out a sub ledger by item if we want and then we had service revenue and then we did decide that we wanted to break out our rental income separately rather than putting it into services that's the income for us renting the guitar the band sets and this billable expense income is the account that was impacted when we paid for something with an expense form like a expense or check form and or a bill and then we pulled it over into an invoice because there was no item QuickBooks needs an income statement account to create that's why it created the billable expense these accounts are going to go up with the sales forms sales receipts and invoices in some cases they might go up with a deposit form if you're not using a full service kind of system and you're possibly using the bank feeds to increase the income then we have the cost of goods sold this represents inventory that we sell would only be on the books if we sell inventory if we're a service business we have no cost of goods sold the income minus the cost of goods sold gives us a pit stop along the road to get to the bottom line of the income statement net income this is called gross profit and then we have all the other expenses which is typically the longest part of the financial statement the biggest category often having the most kind of subcategories in there depending on how you like to format your books so we have the internet expense the payroll information which I can collapse if I want to like this and then I've got the supplies the telephone expense utilities and then total expenses so these are the total expenses and then if I subtract this from gross profit that we had up top to do gross profit minus the expenses we get to the the net operating income that another pit stop along the road to get to bottom line net income why do we need that pit stop because it will it will give us basically the net income that we think is attributable to our operation our performance this stuff below we're going to say this is other stuff that isn't really related to our business one being the gain on the sale of investments we don't expect that to happen again in the future that was a one time thing that's why it's down below and then the other expenses the interest expense we're arguing here that you might put that down here you might not too sometimes but because it's a financing expense and we wouldn't have it if we didn't need to have the loan out there therefore it doesn't really connect to our performance but again some people you might put it up top too but we just wanted to show you that one to see how the other expenses works here too and that will give us our final bottom line the net income now the types of reports that you might provide to a client would typically include the standard income statement something that has the just the total income and the standard balance sheet you might also try to create like a summary income statement here you can do so by collapsing so if I collapse notice what it's done is it's it's it's removed all of my subcategories it still has these triangles but it doesn't have my subcategories like we had in in here so if I expand so that might be your first income statement that you provide someone because remember if you're giving a meeting to someone the people are going to usually people are are are not very receptive to financial information right it's below them they're the creative people or something right so you have to kind of start with the basics and then try to convince them that this is important and then you could try to go from there so you might want to have a basic intro couple reports and then try to try to get going from there then you can do those comparative reports which for example if you have the two month period here we saw on a month by month side by side so on the income statement that gives us the two months and the total notice that this total is redundant so if you give them a normal income statement and this income statement you might do that but it's also a bit redundant however you might want to start with the summary income statement and then maybe have this one expanded as your second income statement even though there's some redundant information here because if you give them this off the bat because it has more information again they'll roll their eyes most likely and won't engage with it maybe possibly so then you could also have a report this way where you're going to say I want to subtract the comparative report so going from 0 to 0, 1, 2, 4 and then running the report so now and now I'm going to see it in total and then I want to compare it to the prior period so here's the prior period report so I can compare to the prior period which would be the prior month in this case so I can say okay let's run that one and so now I've got a comparison of the two periods the current period up front when you do this report typically you want a dollar sign comparison and percent comparison and that gives you now a change a difference between these two February the current period and the prior period and it gives you a percentage change so you can see the percentage increase or decrease so that's another kind of common report just a variant of the income statement you might call it a horizontal analysis report and then we can also do we could also compare month by month we might compare if it was later in the year quarter by quarter and so on and so forth and then the other common report here is going to be the percentage of income and that's going to basically compare every line item in what you might call a vertical analysis to net income very common report because it allows you to benchmark to other companies that are in your industry if you do that on the balance sheet the report would look like a percent of the column report something like this notice I can do that with the two months here I can have each month and each of them have a percent which will get tedious and that will probably drive people away as well because there's too much stuff on it but that's that's that and so those are just some general reports now if I go into the internal reports I'll go into these kind of quickly just to remember that all the other reports are basically giving you more information about those two main reports so just an overview here the business overview you got the audit log that's an internal report to see who's working on what these are all comparative balance sheet balance sheet detail the summary balance sheet is a good one because you might start off with that one for the same reason that we said that the summary income statement or collapsed income statement could be useful it's basic right start with the basics and then move from there and then we've got the balance sheet these are all variants of the balance sheet most of them can be made as we did with the comparative balance sheet just from a normal balance sheet you can do your own adjustments profit and loss this is a variant of the profit and loss percentage of the total income that we just did that we call it a vertical analysis profit and loss comparison you can create that from a normal profit, loss profit, loss detail just variance of the profit loss, profit loss year to date variant of the profit loss, profit loss customer just a variant of the profit and loss make that one too. Profit and loss by month. We've made that one. Profit and loss by tags. Tags are a special thing. We have a whole another course or section if you want to look into that. And finally the normal profit and loss and then the projected project profitability summary. If you have the projects quarterly profit and loss summary again kind of a variant of profit and loss for quarterly and statement of cash flows. This is another one that you would typically provide to your client. It's another financial statement report. We don't often look at it when doing the internal financial bookkeeping because it's really something that you kind of create after you build the balance sheet and the income statement. So that's an important one that you can provide on a monthly basis or so. And then who owes you. All of these reports are basically given you for the most part information about the accounts receivable will not be that useful unless you have accounts receivable accounts receivable being an accrual account which increases when you make invoices. And you will not have them if you don't do invoices rather recording sales with sales receipts or deposits sales and customers. These reports primarily will give you more information about the income line item on the profit and loss. And this is where we can break out the income for example by customer and income by you got you got the sales by customer and sales by product. That's why on the income statement we don't have a ton of income lines breaking out another line per customer or per product but rather have these internal reports that we can get more detail so we don't muddy up our income statement but still can go to other reports for the detail. You will only have those reports for detail if you use the sales forms the invoices and sales receipts if you're using a deposit form to record revenue it's likely that you won't have access to those other forms and then you might change your your method you might record YouTube income or something as YouTube income which YouTube is kind of like the customer in essence in that case because because then you're you're not you're using the bank fees to record it what you owe this this most of these will give you more detailed information about the accounts payable which only goes up when you enter a bill a bill being an accrual form increase in accounts payable and many small businesses might not have bill forms that they're entering because they pay off the expenses as they become due in which case most of these reports will not be relevant the 1099s are relevant but there's a whole another widget for the 1099 that we will talk we've talked about in the past I think expense and vendors so these forms although it says vendors the expense is kind of the key here so most of these are going to give you more information about the income statement accounts here that are broken out income statement accounts for the expenses broken about out by what you used them for as opposed to the vendor like who you paid so this so you might in a similar fashion with the income statement break out the expense forms by vendor in a similar way as you break out your income by customer with other reports and so this could give you more information about those items sales tax sales tax in the united states type of usage tax gives you information supporting the balance sheet account of sales tax liability typically you got your employees lists of employees the stuff for your accountant including the big one the trial balance and also you've got these transaction detail reports which are quite helpful and then you've got all these payroll forms if you're processing the payroll internally within QuickBooks this given you the supporting information to create your your 941s your 940 your W2s your W3s which hopefully will be also automated within the QuickBooks system if everything is running smoothly so let's take a quick look at the transaction the the journal report I'm going to right click on that and open that and then the transaction detail by date I'm going to open that up so if I look at my balance sheet at the end of January this is where we stood and if your stuff if your numbers tied out then and we can look at it by trial balance too at the end of January this is where we stood and if your numbers tied out then and you entered everything according to this journal report we have to end in the same period right this is the difference the journal report or this transaction detail report are the difference getting us from where we ended at the end of January to where we are now so if your numbers tie out to the trial balance here great if they do not try changing the date see if it's a date range issue and then you can compare to this journal report and see if there's anything different on your end to what we have so so here's here's here it is in a journal report this gives you the let's let's change the dates going from a custom date going from 010124 to 022924 so this gives you all the transactions transaction type and the debits and credits which is great if you want to learn debits and credits what happens which each of the forms and the accounts that are impacted so I'll just go through this slowly so we had a deposit inventory when we put the inventory on the books the expense forms check form check form invoice and then a payment invoice payment I should just do this for February let me just do it for February 0221124 because we already did January last time and so this is just February's data so we had we had a check for the loan we had the deposit form we had the sales receipt this let's open this up a bit sales receipt form we had another sales receipt a deposit form a bill an invoice a payment a payment a deposit an invoice a sales receipt an invoice an invoice a payment a deposit an invoice an invoice a payment deposit check payment invoice payment journal entry journal entry bill bill bill and then we paid the bill with a check type form check check paychecks and then journal check check okay so then we can also see that a little bit more condensed in the transaction detail report so if I check that out custom date going from 020124 to 022924 so this is the same thing but it's given you a condensed format and so so if there's only one other account affected it gives you the other account but if there's more than one account affected then it doesn't it just gives you a dash that's why it's a little bit less uh useful but at the same time it's more condensed and easier to see so again you can kind of tie out your numbers to these numbers and if you have everything if you started at the same point and all these numbers tie out then you would think you would have the same ending balance if there's something on your report that's not on this report then you you might have a duplicate you might need to delete one of them if there's something on this report that's not on your report it might be a date issue you might increase the date to see if that's the problem and if that's not the problem you might need to add it