 QuickBooks Online 2024, bill pay form, get ready and some coffee because we're going to get the books on key with QuickBooks Online 2024. Here we are in our Get Great Guitars 2024 QuickBooks Online sample company file. We set up in a prior presentation opening up the major financial statement reports like we do every time the reports on the left hand side in the favorites. Right-clicking on the balance sheet to open a link in a new tab. Right-clicking the profit and loss to open link in a new tab. Right-clicking the trial balance to open link in a new tab. Let's go to that tab to the right where the balance sheet is located. Close up the hamburger so we can eat it and then change the range. We're going from 010124 tab, 013124 tab and then we're going to go for a run. And then we'll tab to the right. Close up the hamburger and then we'll range change. 010124 tab, 013124 and then we need to refresh. Refresh. And then we'll tab to the right. Close up the hamburger again. Range change. 010124 tab, 013124 tab. Once again running and refreshing. Let's go back to the balance sheet this time. Now we're going to be entering another form which will record a transaction this time a pay bill form. First a word from our sponsor. Yeah 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. 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 worked 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. The pay bill form being like a check form and you will recall that the check form or expense form decreases the checking account. But this time the pay bill form is specifically tied to the accounts payable. We will deal with the accounts payable more in a following presentation because most of the transactions we entered this time we entered just with a check or expense form. Next time we will be entering the bill form. This accounts payable is on the books from when we entered our beginning balances into the system. Let's take a quick look at the vendor cycle with a flow chart. This is a QuickBooks desktop flow chart but we are just using it for QuickBooks online because we are thinking we just want to see the flow of the cycle of forms. We are looking at the vendor cycle meaning the cycle for expenses or payables. The cycle in which money generally goes out at the end of the cycle in order to purchase goods and services and usually we have an expense related to it ultimately. So the easiest way to deal with this and most small companies these days especially with the advance of technology and having online banking and what not will use this easiest way and basically be on a cashed base system in which you connect to the bank feeds, you pay everything with electronic transfers which is great as we did last time when we paid off our bills like the telephone company, the utilities and that kind of stuff. And then as it clears the bank we can just record it to the proper generally expense account and that will create an expense form as we basically do the bank feeds. We will talk about doing that with bank feeds in a future course or section but that would be the easiest thing to do. The second easiest thing to do or the second method that would still be cashed based system would be that you are going to basically write checks either with a checkbook or you print the checks out of QuickBooks, still needing physical checks that are external to QuickBooks to put in the printer and then you would have to enter the checks as you write the checks even if you are physically writing them by hand. We don't want to wait till the checks clear the bank because if we wait till the checks clear the bank we don't get to see the timing difference and look at if there's outstanding checks because the big problem with checks is we know the transaction happened a lot sooner in time than the bank knows and we want to record that so that we know what our cash flow is really and we also want to be able to determine if a check has cleared or not if there's a problem with the payment of it. So we would enter the checks we would record them and then when they come through the bank feeds we would just reconcile them there or do a bank reconciliation. Now if we have an accrual system however then instead of it entering just checks or expense forms we would enter an actual bill. So now you're imagining you get the bill like the telephone bill or something like that instead of just automatically paying it when it becomes due you enter it as a bill. Note the terminology here the terminology in normal like accounting even if I say something is a bill that typically means someone is billing us or there's going to we owe someone money. They sent us something that says we owe them money for goods and services that we consumed from them or we can even use the term bill for billing our clients. Money just like we used we invoiced our client we can use those interchangeably and normal accounting concept they invoiced us. Well if the vendor invoiced us that just simply means that they sent us a bill. So but from the standpoint of QuickBooks we have to determine which side of the transaction we are on bills mean that we're purchasing the goods and services from someone else. Even though we bill our customers for goods and services that we provide them we just call it an invoice from QuickBooks. All right so that means that also if we have the bill it's even more restrictive than that because instead of when we get a bill if we enter it in the system and just pay it if I just pay it off with a check form or expense form then it's still not called a billed form for QuickBooks. It's just it's a bill it's a charge to us that we got that we paid off we didn't enter it into the system as a bill right. So if we enter it into the system as a bill form the accounts you want to tie to that is accounts payable that means we're not going to pay it off right away. We're going to put it in as accounts payable increase the liability account and then pay it off at some future point with basically a check or expense type form. But it's going to be a special one called a pay bill form which will indicate specifically that although it's a decrease in the checking account the other side is going to be decreasing the accounts payable specifically. Now quick note that oftentimes small businesses if you have the cash flow they'll they're just going to be paying off the expenses as they come do or possibly paying them off with credit cards as they become doing just wait till they clear the bank feeds. That's the easiest things to do. But as a business grows then the accounts payable becomes more and more important. So if you work for a larger type of business then you're going to be managing a lot more closely the accounts payable most likely. Why is that the case because for example if I got a bill today for $100 and I could pay it 15 days from now or I could just pay it now which would be the easiest thing to do. Then I would I would just pay it now like what's the point. I'm not going to wait till 15 days it's due. I'm just going to say it's I'll pay it when it's due. But if I had a lot of transactions that 15 days becomes relevant right 15 days for $100 doesn't make much difference. But if I had a thousand transactions for $100 or I had a few transactions for for thousands of dollars then the 15 day difference makes a big impact on our cash flow. That's why we would we were going to try then from a cash management standpoint to pay the bill as late as possible so that we can hold on to the cash as long as possible and earn interest on it or be able to use it in our business basically as long as possible. Without angering our vendor in the process and while still being able to take advantage of any kind of discounts like cash discounts that we might have. So just know if you're a small business you probably don't want to go overboard on that because you don't want to anger your vendors by holding on to your money just as long as possible and being really kind of difficult to deal with with the vendors. Because it's probably not going to save you a whole lot of money when you're talking about low low amount of transactions and low dollar amounts. But again as the transactions get larger that becomes quite significant that 15 day period and so therefore you're going to be managing the accounts payable a lot more. So we have the accounts payable on the book if we look at it this way the vendors are up top. We entered check forms last time when we paid like our credit card bills I mean our utilities and whatnot. We could have used an expense form same kind of idea decreasing the checking account. This time we're imagining the bill was entered with a bill form. However it was done when we entered the beginning balances when we added the vendor then we entered the amount that they owe us then it generated a bill automatically and then of course we're going to pay the bill with a pay bill form. So quick reminder how this happened. Here's our bill and accounts payable. If we go into it we can see that the let's go back to 2023 on the date range. We can see that we have the bill 15,000 was put in place. Other side went to opening balance equity because it was during our starting process I'm going to go back and exit. There is a sub ledger to the accounts payable just like there is to the ARR account up top. This time not breaking it out by customer but by vendor. We need to know by vendor. So let's go to the tab to the right and right click on it and duplicate it and then we're going to go down to the reports on the left hand side and then close up the hamburger and looking for the reports that support the accounts payable. Not going to be who owes you it's who you owe what you owe okay. So then we have the accounts payable agents and so on which we might talk about later but we are just want the classic report which is just a sub ledger the vendor balance detail. I'll right click on that open link in a new tab going to the new tab closing up the hamburger and so there we have the dates and obviously there's only one thing in it. So it's not that interesting but if we had multiple vendors in here then all the vendors would add up and the total broken out by a vendor would match what's on the balance sheet as it does here. And it always has to match by the way because with the accounts payable like with the accounts receivable QuickBooks will not allow us to post something to it without adding a vendor. That way QuickBooks is saying I'm going to make you have the have the sub ledger work out because we're going to make you assign a vendor every time you enter something to accounts payable. All right let's go and check it internally if I go to the internal and attract the expenses area which I would call the vendor center that's what it used to be called here. It's going to be a lot more important like with the accounts receivable side on the customer side when we had outstanding invoices it was a lot more important to then manage the center for the customers. On the expense side it's the same thing if you're just paying the expenses as they become due you're probably not going to need to come in here that much unless you want to look up a particular payment. And even then you're probably going to drill down on the account and find the payment or in the cash account from the reports. But if you're using accounts payable it's going to be a lot more important because you're going to have to manage the bills that you're going to pay and which ones you're going to pay and when. So multiple places we can go to find them we can go into the expenses tab and then we can sort by this time bills. So there's all of our bills all one of them we can filter the bills for the status of all status open overdue or paid. So the open bills means we have not yet paid them overdue of course means that we're going to put the due date when we enter the bill. Not everybody does that by the way. But if you're managing the bills and trying to pay them as late as possible let's just take a look at that. Wait a second I said I said let me see this one more time open not paid and then pay and then we paid OK. If you go into the bill let's check it out. Notice we have the bill date so we might enter the bill date basically when we got the bill now the due date is over here. Now a lot of people kind of ignore the due date when you're just when you're just because you're just entering the bills fairly quickly right. Similar to the checks and you can't usually use the terms like you can with an invoice because it's not like when you get the bill it's not going to always be 30 days away. Because you don't know exactly when you got the bill it might have been mailed to you or something like that. If you're managing and trying to pay as late as possible you got to put the due date of the bill in there so that you can sort your information over here by due date. And then you can pay your bills as late as possible while still taking into consideration any cash discounts you might have. And then you can sort this on the bills side as well which is probably the most likely place to go when you just want to look at the outstanding bills. So you've got the bills here we've got the vendors drop down and the bill dates that we can manage on the filters. And then the breakout between unpaid and paid is by tab now so these are the unpaid ones it's going to shift over to the paid ones once we pay it. If we go to the vendor tab we can also manage our bills over here we've got the quick filters up top we can go into the overdue quick filters. There we have it and there's our bill the next thing we would do of course is make a payment we could we could create a bill create an expense if we needed to. But we can make a payment by clicking on it like this and it opens up the bill payment form and it lists the bills down below. So notice when we open the bill payment form if we had multiple bills it would have multiple bills down here but it checks off the one that were opened automatically. We can also just go into if I close this back out and I go into the plus button up top and we're in the vendor section there's our bill here's our pay bill form. If I go into that it's basically the same thing it's going to come out of the checking account the date let's put on the date what did I want on the date let's try to tie this into my practice problem. Let's say it was the 25th let's go to 28 let's bring it up to 28 and then I have to change the check number because we messed with the check numbers before because I messed them up. So we're on 1011 I want that to tie out to the future section or course for the bank reconciliations and then we've got our bills that were entered down below. So if we have multiple bills we can check off multiple bills this is another area that we can sort the bills by so we've seen multiple errors we can sort the bills by to then pay the ones that we want. Now it's possible to pay part of the bill over here so if I just paid like a thousand dollars of the bill do you know I don't want to leave if I paid a thousand even know what you're talking about why did you even why would you even suggest that I didn't click on anything. Whatever we could pay a thousand dollars of the bill and would look like that but we're just going to pay the whole thing off. You did it again I don't want to leave. What in what made you think I did QuickBooks. Oh dude. So in any case and then so there we have it and then if we were to print these items then we would want to select the printer we can print later or we can print them as we go. So if we were actually physically printing checks we would still need external checks that we would be purchasing putting into the printer having the start number line up to what's on the actual checks and be able to then print them all at one time if there was more than one check or even if there was more than one check. And then if we're don't want to have checks and we just want to make it like it's an electronic transfer then we can simply delete the the check number here and we'll use the same pill pay bill form but which is just a reduction to the checking account like an expense form or normal check form. But we won't have the check number on it. You can put like it like some other indication that it is an electronic transfer or something like that possibly. And if you're writing checks with your checkbook and not printing them out with QuickBooks you can do that too. You just want to make sure that you still line up the check number and you just simply won't print them kind of like what we're doing here. I'm imagining I'm handwriting my checkbook here which has check number 1011 and I'm going to send it out right. So then when I save it I have the options to save it save and close or save and print. We're going to go ahead and save and close when we do what's it going to do. It's a pay bill form. The first thing that should come to mind in a pay bill form should be that it's it's going to be decreasing the accounts payable. Now that's kind of the other thing that should come to mind is it's decreasing the checking account because the pay bill form is a type of basically check or expense form form that decreases the checking account. But the thing that makes it special or differentiates it from an expense or paycheck form is that it's decreasing the accounts payable. So let's go ahead and save and close. I'm going to stop saying right. I'm developing a tick to say right all the time. Is that right? Do you agree? Do you agree dear listener with my assessment? Okay. I'm going to stop doing that. I can feel it. I feel that happening. So if I go into my accounts payable, I'm going to go into the AP and so if I go back to 2000. Here we go. So now we've got the bill and then we've got the pay bill. That's the pattern we expect to see in the accounts payable similar to the pattern we saw in the accounts receivable where we had the increases with an invoice that decreases with the receive payment. That's all we're going to see here. Notice all these other accounts that we look at, they're a lot simpler to look at the detail than the checking account. If I go into the checking account, notice it's a mess because there's a lot of stuff happening here. And so now I have another kind of form here in the checking account, which is another check form. And we could have a bunch of different transaction types that go through different cycles in the checking account. Why? Because the checking account is the lifeblood of the whole accounting system. It's running through the veins of every cycle. Whereas every other account has its own special duty and it's not part of every other system. It's not interwoven in every other system as intimately as the cash. So but on the cash side, we have the payment check. Notice it's still just a check. We have a check number, but now it's a bill payment which tells us specifically it's an accounts payable related one, which we already know as well because it's in the sub account over here. Notice it's really, I like it that QuickBooks has these other forms to give us an indication that this check, this decrease to the checking account has a special use. But it also gets a little bit tedious as well because when I filter and sort for decreases to the checking account, I have to take into account and remember all the different kind of decreases there are. Like in the desktop version, for example, they don't even have a difference between an expense form and a check form. These two forms are basically the same except that one has a check number and one doesn't. So you could just use the check form and not enter a check number for those items where you're not doing a check. You could put something else like E for electronic transfer or something like that. It's the same type of form. I said right again, didn't I? I totally did. I'm going to stop that. Stop that. So these forms are basically the same. This form, same kind of thing as well, but this time the other side's going to the accounts payable. So if I filter over here and I just want to look at the decreases and not the increases and I add a filter. Usually we often filter by type, right? Am I right, people? Am I right? And then we're going to say this equals and then I have to find all the ones that I need. So like expense form, expense. Why aren't you expensing? Oh, there it is. Expense form. And then I need to find the check form. Let's say check. Oh, man. Let's go back up and search for check. What is it? My filtering option to search. Check form. And then I'd also have to search for the other bill form. See, it's a little bit tedious to filter. Whereas if everything that decreased it was one form like a check form or an expense form, whatever you want to call it. Then it would be a little bit easier. So there's some pros and cons to that. Just want to point that out. Not criticizing the point. I think QuickBooks's detail there is nice, but everything has its ups, its downs, its ins and outs. It's complicated, you know, a lot of ins, a lot of outs. So let's go to the, to the, to the sub ledger. And the sub ledger should disappear now. Nothing's in it. If I look at it on the internal side of things. We can then say, let's go to the right and open up the hand buggy. And we're going to go down to the expenses area. Close up the hand buggy. We'll go into the expenses. And if we look at the bills, so now we're looking at the bills and we can filter them by all status. Or we can filter the open ones and apply. So no open ones at this time. We can say we want the bills filter and overdue or paid status. There's the paid status. We would more likely be doing that in the bills area because that's what it's here for. And so the unpaid are gone. And if I go to the paid side, there's the paid side. So we can, we can show the payment here. And it gives us a nice little showing of the payment down below, which is nice. We can then open it up and see the full bill. It's paid over here. It connects to the payment. Everything is linked together. So there's the payment. I can go into the payment. If I so choose, there's the pay. There's the bill payment, which made the check. So everything's tied together over here. It's all integrated and whatnot. If I go to the vendors, which is nice. And then so now there's no overdue or open bills outstanding. We can go to paid last and find it in here possibly. And who was it that we paid? I forgot it was, uh, it was epiphone. Yeah, there's a bill. There's the bill. And then there's the bill payment. So these things are intimately connected. If I click on this, it gives us our bill and there's the payment. Boom connected together. And so I can see my payment right here. And we go into that. Everything, everything's connected together and that ties out to the bill. So very nice, very nice. Okay. All right. So let's, let's open up our trial balance to see what has happened over here. Uh, the trial balance. That's not the trial. But here's the trial balance. And we're going to see K for crying out loud. Paso was my Spanish, my Spanish English K for crying out loud. Paso K Paso. Let's go ahead and run it. And then, uh, this is what we have thus far. We've got the balance sheet on top of the income statement. And so if we just run through, if your numbers tie up to these numbers, great. If not change the date, see if you can increase the date, see if it's a date issue. If it is drill down to the actual form, possibly change the date from there. Balance sheet on top of the income statement. So we got checking account. It's a cash account. The ARR account is an accounts receivable account. Is an asset. The inventory is an asset. Investment is an asset. Payments to deposit asset. Accumulated depreciation. The funny contra asset bringing down the assets tied intimately and part of an asset. The furniture and equipment, the PPE and the property insurance is an asset prepaid insurance. The assets are one side of the coin. That's what we have not measured in units, measured in the measuring stick of dollars. Even when we're talking about furniture, the couch is measured in dollars and whatnot. So that is that. And then if we go to who has claimed to them liabilities, no, it's now zero. That's going to be the third party of vendors. We've got the loan payable, the bank, and then our claim to those business assets in the equity section, owner investment, owner's equity, and then part of owner's equity broken out, giving us the last year of information, the story of what has happened last year. And I'll tell you what, it was a great story, one that you're going to want to stay tuned to as we go forward because it's not over. The story is not over. But if I have a loan, the story is not over. But if I add this up, 46877 plus 5180 minus 37242 minus 500 minus 410 minus 620, that gives us 13285. And then if I go to the income statement, we can see that the income statement is 13285. If I go back to the trial balance and I was to add that to the equity, oh man, what did I do? Let me do it again. 46877 plus 5180 minus 37242 minus 500 minus 410 minus 620. And then plus the equity, which would be retained earnings if it were a corporation, 77896. I get to 91818, which we can scrunch together in one number by going to the following year, 5103125 and run it to refresh it. And so there, see now it's everything is inequity. Income statement, part of equity. It's just giving us detail in essence about the equity, which represents the book value of the company, assets minus liabilities, giving us the story of what happened last year, not the whole story, not going back to the beginning of time, just like a movie doesn't do that. We're only telling like a year's worth of story, or like that show 24 that was, I guess that's a pretty old show at this point, but it just goes back one day, right? Because otherwise it would be a long, really long story and you couldn't keep people interested. So there's that.