 So now we're going to go into one that's a little bit more unusual of a transaction than the items that we'll have for the telephone and utility for example. So the month-in kind of expenses are perfect types of things for us to set up with the use of the bank feeds, waiting until something clears the bank if we automate them instead of actually writing a check. So this will also be an outflow but instead of for an expense it's a larger purchase, something like equipment that we're going to be purchasing. Now the problem with equipment is that you can't really stay in a cash-based system with it. So ideally the easiest thing to do would be I'm just going to record an equipment expense over here or something for whatever I purchased. If it's a small purchase you might call it small tools, you might call it supplies, but if it's over a certain dollar amount then typically from an accrual standpoint we have to put it on the books as an asset even if you want to be on a cash basis most small businesses still have to do that because from a tax basis standpoint the tax code is going to force you to do that if nothing else. And so that means that we have to kind of think about well how am I going to recognize a transaction going through the bank feeds that will be applied to a purchase of equipment versus something that's just going to be an expense for like small tools or supplies. One way you might do it is apply a rule for a dollar amount type of rule. So we might say hey I bought this from Home Depot a supply shop if they're under a certain dollar amount maybe that's just going to be supplies if they go over a certain dollar amount maybe then I have a rule to at least let me know and notify me that I might need to put this into the categorization of an asset on the books as opposed to expensing it. Now the purchase of assets don't happen all the time like the fixed assets equipment for example you don't buy a forklift every day you do pay the phone bill every month. So that means we don't expect expect the same kind of regularity with the big purchases that we have so that means that when we set up the rules and the bank feeds we've got to make sure that we can catch those kind of unusual type of things. Also if you finance the equipment meaning you take out a loan for part of the purchase of the equipment then that's going to mess up the whole concept of just constructing your books from the bank feeds as well. There's a couple ways you could deal with that you might say okay I'm just going to adjust it when they come into the bank feeds and I'm going to record the loan the part of the finance that I put on the books or if you're working with a good accountant that does your taxes at the end of the year then you might say I'm just going to stick to a cash based system as much as I can rely on the data input from the bank feeds I put it on the books as an asset because it was over a certain dollar amount I've got my loan documentation but I'm not going to actually record the loan documentation into the system I'm just going to record the purchase of the equipment for whatever cash I did pay for it and then I'm going to give all that documentation and the purchase information to my accountant at the end of the year so that they can make the adjustments necessary which would be to put the loan on the books and we might have to put the loan on the books just to pay the loan but we'll just make the payments to a loan account and then we can have the accountant set up the transaction properly record the actual transaction for the purchase of the equipment and sometimes the purchase of equipment can be a little bit tricky because if there's a trade in or something like that the tax depreciation might be different than the book depreciation so the tax preparer might have to do it anyways even if you try to attempt to do it on your side so in any case and they can set up the loan and they can set up the interest portion breaking out the interest and principle of the loan payments that you've been making on the loan so that's one way you can kind of try to automate on the bookkeeping side of things and then you can make periodic adjustments at the end of the period so those are a couple concepts I'm going to go to the first tab over here let's take a look at our our bank feeds our bank feeds are under the banking on the left hand side if you're in the accounting view and then the banking up top if you're in the business view then the bank feeds are going to be let me jump over here the business view is on the bookkeeping it's in the bookkeeping and then the transactions tab up top so let's duplicate one more tab and I'm going to look at the general ledger now so I'm going to right click and duplicate the tab I'm going to pull it to the left I'm going to grab it and pull it to the left I'm going to go down to the GL the general ledger I'm sorry the chart of accounts the chart of accounts I should say which is going to be under the accounting and then the chart of accounts up top if you're under the business view the chart of accounts are located in the bookkeeping and then the chart of accounts and then I click that to see the chart of accounts okay so we basically removed all of our chart of accounts and the fix to and notice the general rule I have with the chart of accounts is that if you're starting from scratch and you don't know much about the accounting system you might want to add your accounts uh or or keep the accounts that QuickBooks gives you which is this huge list of accounts as you're doing data input use the account that they have assuming that that's going to be close to some kind of standard and if they have a name that you don't like change the name of the account instead of adding another one with a similar name and if there's no account at all then you can add the account and then go in here after a couple months of data input and delete or make inactive all the accounts that you are not using which there should be a lot of them most likely because they put a whole lot of accounts in here that's the general concept now I removed all the accounts up front because I want to build the whole thing as we go to show you how we can add the accounts as we do the data input but even if you were using that first method with the fixed assets they give you this whole list of fixed assets which I don't think I think it's too detailed for most small businesses they're trying to do a lot of things to help you but I think they're they're making it too convoluted what I would suggest doing is talking to your tax preparer and asking them for their depreciation schedules and what categories they're going to put in place with regards to the depreciation schedules because it's likely that you're going to have to record depreciation in accordance with the tax software external to QuickBooks which is going to be prepared by the tax preparer most likely and they could do book and tax depreciation oftentimes depending on the software they're using so what you want to do is get the categorization from them how does their software categorize the fixed assets most small businesses would do it that way I think that would be the best way and then set up your accounts to mirror that so that it will be easy to reflect the sub ledger in the tax software in terms of your listing of your assets and the depreciation that's related to it making the adjusting entries are easy to do as well so we're going to come come back here and create an account kind of as we do the data input all right let's actually do it we're going to go to the banking and I'm going to close up the hand boogie and I'm going to find the transaction I want to work with I'm sorting by bank detail and I'm going to pretend that this one is for the purchase of equipment