 QuickBooks Desktop 2023 Company Preferences, Integrated Application and Items and Inventory Let's do it within 2-ids QuickBooks Desktop 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 QuickBooks Desktop, if you've been following along with the practice problem note that we set up our Get Great Guitars practice file in a prior presentation. If you're using another file to follow along with that's okay because at this point we're really just going into the preferences which can be found on the edit drop down preferences down below. It is useful however to be looking at a file that has been started from scratch a new company file because then you can see what the default preferences are and think about which preferences would need to be changed as you start a new company file and it has different needs for that particular company file. Last time we entered off on the general preferences we're now moving down to the integrated items and then we'll look at the items and inventory. So integrated applications nothing's on the my preferences tab if we go to the company preferences tab it says you can manage all applications that interact with this QuickBook company file here. So you might QuickBooks is a standalone software QuickBooks has certain add on features that you can purchase through into it which would be things like payroll would be the principal item and then you might have some other items that would be specialized needs that can be used within QuickBooks and if you're managing those types of items this may be the place to go. So then we've got the checkoffs don't allow any applications to access this company file so if you want to be sure not to allow any access you could check that off we're going to keep it unchecked as the default notify the user before running any applications whose certificate has expired so that might be a good internal control depending on the applications that you are using applications that have previously requested access to this company file would then be listed below once again this practice problem will not be using any external applications possibly in the future we'll get into some of the more popular maybe we'll do a course on some of the more popular kind of applications and their uses but typically that would be kind of more specialized type of things QuickBooks is a software that is a full service kind of software for the general accounting needs let's then go down to the items and inventory if we go into the my preferences once again nothing is there so we're in the company preferences tab items and inventory now the inventory is going to be a component that's going to be clearly quite useful and something you need to consider if you're in a company that has inventory so just a quick recap of the kinds of companies you have you might be a service company like a bookkeeper or something like that you don't have any inventory therefore you can keep the default of this unchecked if you do have inventory then you're going to have to track that in some way shape or form so there's a few different ways you could do that you could try to stay if you if you are an adjusting time kind of system and you have very little inventory you could try to stay in a cash-based system in that case when you buy the inventory you basically expense it when you buy it possibly it's cost to get sold or something like that and it's pretty close to the point in time that you actually sell the ending inventory but usually you have to track it on the balance sheet as a balance sheet item if you do that then the question is well are you going to be tracking the the inventory items within QuickBooks which would be using a perpetual inventory system or possibly you can use a periodic inventory system in which case you're entering the inventory just in terms of the account when you buy it and then you're making adjusting invent entries periodically so let's just before I turn this on if I close this back out I maximize my home page over here note that when we buy the inventory we're gonna have to buy it up in the vendors section clearly and then when we sell the inventory we're gonna sell it with an invoice or a sales receipt if we have a perpetual inventory system then when we buy the inventory it the system will track it when we buy it and it will have to list the inventory in a sub ledger by the type of inventory we purchased and then when we sell it either with an invoice or a sales receipt we will show these forms will then also decrease the inventory account so that would be a full service perpetual inventory system QuickBooks is gonna have to use a flow assumption to do that the flow assumptions are FIFO, LIFO, weighted average or a specific identification if you had that method but it's gonna be using typically a weighted average is the general method used for QuickBooks desktop type of software now note that if I go to the viewed list drop down and the chart of accounts we have chosen an industry which has inventory and you could tell by the chart of accounts down here because it gave us the cost of good sold type of accounts but it didn't actually give us or turn on the inventory in terms of the perpetual inventory system we can tell that because if I go into the home page in the vendor section I don't have this added line that typically is in place if you're tracking inventory I think that QuickBooks might do that because even if you have inventory you might be using a perpetual periodic inventory system in that case when you buy the inventory you might just manually put the inventory to an account so if I go into the bills here when I buy inventory maybe I just assign it to an inventory account as opposed to using an inventory item which would assign it to an account and track it in a sub ledger and then as and then periodically I count the inventory and I actually make just a journal entry decrease in the inventory and recording the cost of good sold periodically possibly nightly possibly weekly possibly monthly so that's a method that you could use in some way that might be easier sometimes possibly tracking inventory on a periodic method in an external Excel worksheet and just making adjusting entries on a periodic basis if we do the full service system it's a little bit more complex to set up because we have to set up the inventory items in order to do so okay so let's turn it on now because we are going to use inventory in the system so we'll go to edit preferences and we're going to go to items in inventory and then let's turn on the inventory so inventory and purchase orders are active warn about duplicate purchase order numbers that's typically a good kind of internal control worn if not enough inventory quantity on hand so we're tracking the inventory real time as we buy and sell it so it's going to tell us when you know when we're getting low advanced inventory setting learn about social locks FIFO these are typically things that might be applicable if you have more of an advanced version inventory usually being one of those things if you have advanced inventory tracking it needs where you might have to level up from the basic QuickBooks QuickBooks Pro to an advanced version of QuickBooks possibly having you know to pay more for those specific needs and usually the things that are upgrading when you need to go from QuickBooks Pro to another level like an enterprise or something would be if you had specific inventory needs like a whole lot of different types of inventories your tracking needs are different you want a different flow assumption as opposed to the default which is weighted average for example the other thing that also pushes people up is when they need more users to be accessing the same company file so and then you got the unit of measure and so we're just going to keep these defaults here so we're going to say okay and say okay and then if I go down to the company and the homepage now we've got the inventory line item up top so when we think about the vendor section the vendor cycle that's when we self when we buy things from the vendor so we're buying things from the vendor typically we just either pay them with a check or an electronic payment or if it's a normal utility bill or something like that we could enter the bill and then pay the bill now we've got the added inventory item which means we could have a purchase order and that would be a request for inventory no actual financial taking place with it and then we might use that purchase order to then enter the bill with the purchase order that would link the purchase order to the bill and now when we enter the bill we're going to use the items tab because we're going to have to actually set up the items because the inventory items are going to be the thing that will not only assign it to an account down here inventory account but also use the item to tell us the inventory tracking the units of inventory and so on and then when we sell the inventory down here that we're we're going to sell an inventory item clearly and when we sell the inventory item we will set the item up in such a way that it will know the cost allowing us to track the sub ledgers so we'll talk more about that in future presentations but note if you're working in a company file and you don't see this top line item up here in the vendor section that's an indication that they don't have inventory turned on they may still be using inventory on a periodic inventory basis in which case they might be tracking inventory on a sub ledger something like an Excel worksheet and making periodic adjustments which could be appropriate depending on your particular circumstances also note if I go to the edit drop-down and the preferences that before we were looking at the desktop view up top and the company items and this inventory thing here is now turned on because of course we actually turned on the inventory so if I click on that it goes over to the items in inventory which we now turned on by clicking this button and that's what changed the homepage up top giving us this other line item so we're going to continue on with more of the preferences in future presentations