 Zero Accounting Software 2023. Set up inventory items. Get ready to become an Accounting Hero with Zero 2023. 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. Here we are in our custom zero homepage going into the new company file we set up in a prior presentation that being get great guitars. We're now working on adding the beginning balances that we are imagining are coming from our prior accounting system as well as laying down those foundational items we need to make the normal data input as easy as possible. So if we go into those beginning balance items here they are we're imagining these are coming from our prior accounting system as the at the end of the prior year. These are balance sheet items that we want to put into our current accounting system. We're first starting with the most difficult items and that is going to be the inventory asset. Now we kind of played into or put the preliminary process of how this is going to work when we looked at service items service items being those things they're going to be populating invoices and sales receipts or the money in forms when we're not selling actual inventory. Now we're going to be adding to that adding the inventory items on a perpetual inventory system. So we want to put the inventory items in place. We're going to put some beginning balances for those inventory items and the sum of those beginning balances will be tracked within zero providing a subsidiary ledger which will tie out to the actual amount which will be on the balance sheet at the end of this of the two thousand eight ninety six. And as we do that we should also then have the capacity to make our invoices and populate them with our new items here as we did with the service items noting that in the United States it's more likely that the inventory items might be subject to sales tax. So we're not going to dive into sales tax in and of itself this time but note that when dealing with sales tax they're often tied into these items and we'll take a look at those in the future. If you're outside the United States the sales tax is similar to a usage tax similar kind of concept with regards to the taxation. So we'll get into that in its own section in a future presentation. Now before we get going here let's let's duplicate some tabs to open up our financial statement reports and we're going to start to do this every time going forward once we have information actually in our financial statements. So to do that I'm going to right click the tab up top and duplicate it and then I'm going to right click on that duplicated tab and duplicate it again. Putting my major two financial statement reports balance sheet and income statement into these tabs and then having our first tab open middle tab. I'm then going to go to the accounting and we've got our balance sheet in our favorites right here which it always should be you would think because it's our major financial statement reports. As it's thinking I'll tap to the right and go into the accounting and this time the income statement or profit and loss let's open that as well. Okay Lynn I'm going to go back to the balance sheet let's change the date range but the balance sheet is as of a point in time. So if I hit the drop down here I'm going to go into the custom range and let's go back to 2022 and I'm going to go to the end of 2022 December. So our goal here is to put the information in as of the end of 2022. So it will roll over properly to the year we want to be working in which is January of 2023 and moving forward. So I'm going to update that we can do the same thing on our income statement noting the income statement has a beginning and ending date. So if I hit the drop down here I could go to the last fiscal year. Let's do that will be a little bit easier January to December 2022. But the current data we're going to put in place starts in January of 2023. All right let's go back to the first tab now and then I'm going to go into our products which is the drop down on the business products and services similar to what we did with the service items. But now we have the added complexity of inventory items. I could add them one at a time like so as we saw with the service item but this time tracking the inventory which has that added complexity. But I'm going to import them and this is going to be a similar process that we can do with oftentimes we're trying to import customers vendors service item inventory items. I'm going to have this information in an external Excel worksheet. We've got the product number the sales description the inventory sales price and so on. We can imagine we got this from our prior accounting system or possibly we just want to input it into a spreadsheet because it's easier. We could make this spreadsheet into a CSV file and try to import it. But it's probably easier to try to just copy line by line or section by section into the template provided by zero to minimize any kind of errors. So I'm going to do that again we're going to go to the import here. We'll say we want to import the items and then I'm going to download the template again and open up their template. Now their template is in a CSV format because that's the format to upload it. I'm going to save it as an Excel file and then and then transfer it back to a CSV file so that I can use the formatting and save the formatting. So I'm going to say browse. I'm going to put it on the old computer. Let's put it where's my stuff. It's on the desktop and then I'm on the zero company file and these are going to be inventory items. I'll put five next to it. These should have been service items up top. But I want to change it from a CSV file to just an Excel file so I can format it and it will save the formatting. And then I'll change it back to a CSV file once I'm done with the formatting and satisfied with it. All right. So now we can we can open this up a bit. Let's widen up the cells. I'm going to select all these cells make them a bit wider maybe. Let's wrap them home tab alignment wrap the text. So now we can see the headers up top a little bit better. We can see the headers a little bit better. Boom that rhymes doesn't it. I feel like a poet and yes I know. Okay. So now we're going to take this information and populate. So we've got the item name just how we saw before but now the purchase information becomes relevant. The sales information was relevant before sales tax. We'll have that later but we'll have that here now. Inventory asset account and the cost of good sold account are now relevant because we're dealing with inventory items as opposed to service items. I'm going to go over here and these are going to be our imaginary guitars that we're selling. So I'm going to say this is going to be the and I just made these up so these are actual guitars that I might have misspelled or whatever. But but I just made up the prices and and whatnot so that we have some some stuff to sell. So we're going to be I'm just going to copy these over. So I'm going to say I'll copy the product here. I'm just going to say paste it right there. Boom. And then the name. So I'm going to copy that from the sales description. So we got an epiphone less Paul epiphone standard pro epiphone Riviera epiphone something and then something something. So we'll copy those and just put those right there. So notice this is a little bit a little bit more time consuming than but again by doing this we're going to we're going to have it in a format that should be perfect for the upload. That's our goal. So purchase description the purchase description is going to be the same. I'm going to say that's the item name which I'm also going to say is going to be the purchase description which is going to show up on the purchasing forms like a bill and a purchase order. And then we got the purchase purchase unit price. So this is where we didn't have a unit price before we only had the sales price. This is what we buy them for. Not what we sell them for. So this is the number that that we're going to put on the bill or the purchase or and or the purchase order. So that's what we buy them order purchases account. So now let's go to the account that we're going to use for the purchases. Now note the QuickBooks and or I'm sorry the zero instructions here said on the purchases account it says if you want to track an item leave the purchase account column blank. Zero uses the account code from the cost to good sold column on the template for this item instead. So we're going to be tracking inventory. So I will leave that blank as as per instructions as I understand them. So then we've got the purchases tax rate we're going to do with taxes later. Note that when you're dealing with sales tax or usage tax it would be nice to be able to have it in play when you're uploading it. But I want to talk about sales tax on its own later. So that's what we will do. And then we've got the sales description which will be the same description but these will be showing up on the invoices and the money in forms. So it's going to populate the same stuff as the other side on the bills and the purchase orders and then the sales unit price. So this is what we sell them for. Hopefully it's going to be a higher number than what we purchased them for. This is going to be our sales numbers. So let's pick those up. I'll just copy those on over here per unit price. And then the sales account. So I'm going to go back to zero and look at my accounts and my chart of accounts and see what the sales account number is. Let's go to our chart of accounts chart of the accounts. I'm going to go on over to our revenue accounts and then we have our sales. So they want the account number not the name. So I'm going to say 4000 is the account number. So that's my sales account for thou copy that down copy and paste it boom and sales tax rate sales tax rate. Again I'm not going to deal with the taxes right now inventory asset account. Let's go back here and say where's my inventory. That's an asset in my chart of accounts chart of accounts. The inventory default that they gave me was one four zero zero one four zero zero. OK movie B to the end. We'll put that one four zero zero right there. Copy it Roger that copy out Roger Dodger. And then we're going to say that the other side's in the cost of good sold. That's a that's a expense kind of account. If I go to my expenses yeah cost to good sold 5000. It's like a special expense. So that's why I was kind of questioning sounding with my voice was like is it cost to good sell. But yeah expense account 5000 5000. It's an expense account. You got to say it with confidence. No one likes it when you're like asking questions when you're trying to go through the thing. Is it OK. Anyways let's save this. I'm going to save this thing. And then I'll save it as a CSV now so that we can import it and see if we see if we did it right. Let's just double check it. So item code item name purchase description unit price on the purchase side. No nothing there nothing on the tax sales description sales price higher than the purchase price. That makes sense. Sales account 4000 not going to deal with the tax rates yet. And then inventory asset account the number as well as cost of the good sold account number movie B to the end. I'm going to save it and then file save as browse it. And I'm going to save it as a CSV changing the format to the comma sliced thing just like we did before with the service items same procedure. I got it. Don't show me this again. I have had enough of seeing that. So now we can see that here's the comma sliced one and here and as opposed to the OG one the original. If I go into the comma sliced one it's going to remove the formatting. So if I go into that I can't do it because it has the same name. Hold on a second. Let me do it again. I got to close the other one out. So now I'm going to go into it now I can do it. Boom but it removed all the formatting because that makes it easy for zero to read it or doesn't mean that zero won't get all messed up or anything from the Excel formatting when we pull it in. So now let's try to pull it in. We're going to say all right. Let's go to the products and services and let's do this. We're ready to roll. We're ready to import. We'll go to the import up top items import. It's important to import properly. It's important to import properly. So there we have our CSV file. So if I hit the drop down and make it look big so we can see it check it out check it out man. There it is. Let's open it up. So it's a CSV CSV movie B to the end and cross your fingers. There it is. I didn't even I didn't even have time to cross my fingers because it happens so fast. Six new items will be created. We're going to complete. There we have it. All right. So now we've got our service items. We can tell the difference between the service items and the other items because now we have a cost line for the service items that we can see here. I can populate it this way. There's our service items. We can archive them. We can delete them. I can go into one of them if we so choose. We've got our information up top cost cost a good sold description sales price sales account and then latest transactions will be listed down below. It also gives us this nice little summary quantity on hand average costs total value so I can go in there and my when I'm looking at you know and I'm tying it out possibly to a physical count. If I need to edit it then I can edit it up top like so. And here it is this way the code the name tracking inventory is on because we're going to do the more complex tracking inventory on a perpetual inventory system method inventory accounts. The account that's going to go up when we purchase down when we sell the cost is twenty four dollars for this particular item. The cost of good sold account did not populate. So there it is cost a good sold. I don't know what was that hopefully that will populate properly. I had it over here didn't we did we do something wrong. No here's the sales price and here's the sales amount we're going to say all right. There it is cost a good sold. Hopefully that's populating properly. Let's check another one. Now I'm worried. I've worried myself on that. I think it was just in products and services and let's see the let's see this one. Check that one out. Check it out. Check it out. Yeah cost a good sold is listed right there. It looks good. So now what I need is to put in the quantity on hand. So I'm actually going to do it. I'm going to do this with another adjustment and I'm going to go in here and put basically the beginning balances in here. Notice I have the new adjustment up top. So I'm going to just going to do this one at a time. So I'm going to say all right let's go into each of these items. This this is my worksheet for the quantity on hand for each of these. I'm going to say I had one ELP one EPSP one EPR one EPSH and and three and then one. So all right. So I'm going to go back in and say products and services. Let's do this one at a time is a little tedious but it. So we're going to say this is going to be the epiphone less Paul. Let's go into that one epiphone less Paul. Let's say we have a new adjustment. It's going to be an increased increased quantity. I'm going to say is one the cost is going to be the same cost which was $400. I'm going to say $400 of those and let's say OK. Save it. I'm sorry the account adjustment account that we're going to go to now. Notice this is going to make an actual journal entry and our objective is for all the transactions to basically net out into equity with these beginning balances. So the adjustment account I can just basically select an equity account. So if I hit the dropdown I'm going to put this to equity so I could put it to the owner's capital account. We could put it into the investment or draws. I'm just going to put it directly into a owner's capital account and at the end of this we'll basically review all of the equity accounts and making the adjustments we might need enter a reference. I'm just going to put beginning balance and then OK and then post the adjustment. So if I take a look at what happens there if I go to my balance sheet and update my balance sheet now and we say OK. K. Pa so and nothing happened and that's because I have to enter the date properly. So I'm going to go back on over here's my adjustment down here. Let's go back into it and see if I can adjust the date of this thing. We're going to say OK. OK. Instead of reversing or editing this I'm actually going to reverse it with another transaction as of the same date and then put it on the books at the date that I wanted to put it on the books for. So it's a little bit messy but we'll see the adjustment up top. So I'm going to say new adjustment and then I'm going to say this is going to be a decrease. Decrease quantity one and the new quantity on hand is going to be zero after this happens. This would by the way be a normal process if you were like doing a physical count and making an adjusting entry at the end of a particular period. I'm going to say the adjustment account is once again going to be that equity account which I put to the capital account and then reference adjust. And so this is going to be a decrease and as of the date same day. OK. So next time I'm going to make sure to change. So there it is. So that takes us back down. Now let's put it on the books at the right date which is December 31st 2022. So I'm going to add an adjustment up here again. It's going to be an increase changing the date this time to properly do this 2022. And I'm going to put it on the books for the end December 2022. That should work December 2022. Quantity is going to be one. The cost is going to be 400. That's our per unit cost. And then the adjustment account is going to be the equity. Can I type equity. I think I called it capital. The owner's capital account. Let's put it there. And then let's put beginning balance and then OK. So now it's going to increase the inventory. The other side is going to go to the owner's capital. Let's say OK. If I go back on over here and run this again. Now it's populated here. The other side is going into the capital account. Let's do that for the rest of them. Bit tedious but we'll say OK. Let's do this products and services. Now I'm on the epiphone standard pro. So let's go into the epiphone standard pro. And I'm going to adjust this one. And it's going to be an increase as of the end of 2022. So December 2022. And then it's going to be an increase of once again one. But now the dollar amount is for the purchase price of 480. So there we have that. And the other side is going to go to the capital account. And beginning beginning balance. All right. Let's save that save the adjustment. So that's on the books for 480. Good. Let's do it again. Going to go back to my products. And then I'm going to go and do this for the epiphone Riviera. So epiphone Riviera. I'm going to make a new adjustment increase as of the end of December. So this is 2022. The end is December. The end of the last year. And this is going to be one again. The cost this time is 440. So the quantity on hand will be one. And this will be a capital. Owners capital. Hold on. Caposso. Capital. Owners capital. And then beginning balance. And say OK. Post that. I could go back to my products this way. So products and services that way as well. And then I'm on. That was the ERP. So now I'm on the epiphone semi hollow body. Let's take that one up. Epiphone semi hollow body. And new adjustment. Increase as of the end of 2022. December 2022 quantity of these we have is two. We actually have two of those. So two of those. And they cost 320. 320. Two on hand. Other account side is going to be the capital account. Keep it there. Didn't do it again. Capital. Click on it. And then beginning balance. And OK. So that looks good. And let's go back on over. And so now we're on a Gibson USA. So let's do two more of these Gibson USA. New adjustment. Increase as of the end of December. December. Okay. And then these we have three of these. And these cost apparently 304. Three on hand. Other side is going to be the capital account. And this is going to be a beginning balance. And then one more time. You know, very small. Hopefully I didn't mess any of these up, but it's quite possible. I have to go back and fix one of them. No, we did it right. I did it right this time. Confident. All right. So we're going to say new adjustment. One more time. Hopefully, hopefully. And then 2022. End of December. And this we have how many of these we got one of these ukuleles. One of these ukuleles 24 is the purchase cost. Adjustment account is going to go to the capital. Owners capital. And it's going to be the beginning balance. All right. Movie B to the end. Let's check it out. Let's go back to my balance sheet. And say, let's update this thing. And so now we've got in the total of the inventory account. This 2896. Does that match what we have here? 2896. It does. Whoo. Whoo. Luckily. Now we knew it would. And then the other side goes into the capital account. If we drill down on these items, we can see, you know, the data input for them in the detail. Now obviously inventory in the future is not going to be going to the capital account. We'll be purchasing it with, you know, cash or a bill or something like that. All right. Let's go back now. Now also note that we we would should have another report here, which is going to be our inventory reports. Nothing's on the income statement, by the way, as of yet because we didn't sell them. It's on the books as an asset. The other side we just put to equity. Let's duplicate this tab and then take a look at an inventory report. So we're going to go to the accounting dropdown and let's take a look at the reports right here. And then let's look for the inventory report. So I'm just going to type in up top inventory. So we've got the inventory item list, the inventory item detail, the inventory item summary, the old item summary and the sales by item. Let's take a look at the inventory item summary report. That's the one I'm going to check out. And then we want to see this as of the end of December. So let's say last fiscal year, if we may. And so there we have it. So now we've got our detail here. So we've got the Gibson. Here's the name. This is the adjustment that was made and then the closing balance. Let's also take a look at another one. I'm going to copy over the income statement because we don't need something here. Let's go back to the reports. I can go on the left or in the dropdown. Let's also take a look at the inventory, the inventory item list. Check that one out as well. And we'll change the dates up top. And I'm going to say the end of last year, last fiscal year. Let's do that. Boom. Okay. So now we've got these up top are the service items down here, the inventory items. And we've got also the units is what I kind of wanted to see over here. So we've got the name. We've got the purchase description, the inventory type, meaning it's being tracked as opposed to the service items, which are not. We've got the unit cost price, the price per unit. We've got the unit sales price. This is what we're going to sell them for. This is not what they're on the books for. And then we've got the total value at this point in time. So for example, this one right here, we only have one of them on the books. And therefore the value is at 480 the cost, not the sales price. The total, if we sum these up, comes out to the two eight nine six, which ties out to what's on our balance sheet here. Now this of course is that added inventory tracking stuff that we need that we're basically going to be dealing with. And we're tracking that in a perpetual inventory system here within the zero system. Therefore, when we make a sales transaction with an invoice or a money out form, it will then decrease this automatically. However, if you, if you did this in another system, another inventory system or in like an Excel or something, when you make a sales form, you would simply make a sales form like you normally would for service item and then you would manually, you wouldn't have this second report, right? You would just be showing the inventory as a dollar amount and then adjusting it periodically based on your tracking externally and like an Excel document or something like that. So there we have it. We're following our process here. So now we've got this two, eight, nine, six on the books. The other side went to equity as I do that for every other transaction, the equity account will then balance out to what it should be. And then if we need to do any final adjustments, we will do that on its own transaction, the final balance adjustment.