 QuickBooks Desktop 2023. Financial reports generated from bank feeds. Let's do it with intuitive QuickBooks Desktop 2023. Here we are in QuickBooks Desktop Bank Feed Practice file. We started up in a prior presentation going through the setup process we do every time in the view drop-down. We 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. Got the hide icon bar, the open windows list, open windows they're open, reports, drop down company financial, the profit and loss, change in the range from 010122 to 123122, customize the reports, then go to the fonts and numbers. I'm going to stop talking like that. Now I'm going to change it to 14, 14. That's what we do. Okay. Yes. And okay, reports, drop down again, company and financial. This time the balance sheet report, customizing it first so we can change the range up top from 010122 to 123122. And then the fonts, the numbers, they're going to be increased as well to that same 14. Of course, we don't want it looking funny. Got a match. These are matching. It's a matching set, the financial statements. Then we're going to go to the banking drop down. We've got the bank feeds. We're looking at the bank feeds center, which would only be there if you got the bank feeds turned on, which we did in a prior presentation. So we've entered the data from the bank feeds into our system. Our primary focus now is on the end results, the major financial statement reports, balance sheet and income statement and the related reports. So just a quick recap, we downloaded the information from the bank into the system. It went into the bank feed limbo, which I call this area here. And then we gave the added information that necessary, which includes customers, vendors and accounts, and then rules that we set up in order to pull it over to the bank feed to the actual financials. And so then it creates the actual financials and related reports. So now let's just take a quick recap of how the bank feeds fit into the system, because you'll recall there are kind of different ways that you could fit the bank feeds into the system, depending on the type of company that you have. And oftentimes it's useful to think of this by cycle, the vendor cycle, the customer cycle. Let's just think about the customer cycle here with the flow process. Note that if you're waiting for the actual deposit to clear the bank and then record the deposit, that's the easiest thing to do. That's constructing the financial statements simply from the bank feeds, but you can only do that in certain industries, like if you have gig work and you're getting paid by a platform like YouTube or Amazon or something that might be possible to do. But by doing that, we're going to use a deposit form to record revenue, which is not the natural form used to record revenue, which is typically even on a cash-based system, the sales receipt on an accrual system and invoice. So we're going to lose some data. So as we look at the financial statements, considering this is how we constructed the financial statements primarily, then we want to discuss what kind of reports are going to be generated and possibly some of those subsidiary reports are going to have less detail with them. And then we took a step back and we did some examples of the creation of the sales receipt, which in that case you would usually make a sales receipt, then record the deposit and then use the bank feeds to match the deposit that we made to what cleared the bank and that helps out with the bank reconciliation process. So in that system, because we use the sales receipt, we have a little bit more detail and we can break out the sales on subsidiary reports by customer and by account or item. And then we've got the invoice here. That's going to be on an accrual basis where we make the invoice, usually received payment, and then record the deposit. So we've tested that out on a few transactions, although the primary transactions we put in place were the ones where we're going to create our financial statements from the deposits from the bank feeds. But we tested out a couple invoices as well, which would be a similar process to the sales receipt and that usually we would record the invoice, the receipt payment, the deposit, and then match the deposit to what clears the bank. So just keeping that in mind, let's go to our major two financial statement report. So I think we entered like three months of data here. So the balance sheet represents where we stand as of a point in time. And that shows us kind of the value of the company, what we have and who the company owes the money to. So in other words, we have assets, we've got the liabilities and equity assets represent what the company has, the liabilities and equity represent the other side of the coin who has claim to those assets. And the third party would be the liabilities equity would be the owner and the equity like we've talked about in prior presentations might have some different capital or different accounts within it, depending on whether you're a sole proprietorship, partnership or corporation. But when you think of equity as a total, you think about it as basically the book value assets minus liabilities of the company with that would then need to be further broken out to the partners or just to one owner or to, you know, we broke out between investments, draws and equity, for example, down below. So let's just go through these accounts and just think about them one by one. The checking account note the checking account, of course, is tied directly to the bank feeds. If we are constructing our books directly from the bank feeds, then the checking account will typically match whatever is on the bank in our bank account, real time, because we're constructing our financial statements from the bank data, as opposed to if we were doing a full service accounting system, there would be differences, even if we recorded or looked at the bank as of the same date, in this case, 12 31 22, because of outstanding checks and deposits, we talked about that more when we went to the bank reconciliations. And then we've got the accounts receivable note that is an account that tracks the the outstanding or the amounts owed to us for goods and service provided that we have not yet been paid for that is an accrual item. It goes up with an invoice. So if you have to deal with accounts receivable, then your bank feeds are going to have to have a little bit more complex system with regards to the bank feeds because you can't just use the bank feeds in order to record revenue, because you're going to have to track the receivables the outstanding balances. Now note that those receivables then have subsidiary reports to them. If I go into the accounts drop down accounts receivable, we got the ar aging ar detail customer balance customer balance summary and so on. So these are reports that would only be useful generally if you're tracking the accounts receivable inventory is another one that usually throws people off from going from a cash based system to an accrual based system. It has both a vendor or payment side of things as well as a customer or revenue side of things because we're by inventory put it on the books as an asset. And then we sell it take it off the books as an asset record the cost of goods sold. We've talked about multiple ways that you'd have to deal with that inventory process because you might have a periodic system or a perpetual system and you might be tracking inventory within QuickBooks or outside of QuickBooks. So then we have the unrecognized gains. This is going to be if we have investments and say stocks and bonds that's another area where we often want to record our investments and increase them or decrease them with the market value. And that becomes something that needs like an adjusting entry type of process that we've talked about in prior presentations we can't just do that just from the bank feeds typically equipment is another one where we typically have to deviate from a cash based system even if you're using a cash based system because the tax code will typically force you to deviate to the equipment account the account the credit card account is going to be another one that we can in essence use bank feeds of the credit card account you can think of kind of like a bank account but instead of the bank account decreasing what you have it's increasing what you don't have you're going into debt of course other than that it works in a similar kind of fashion and so we have the bank feeds that we connected to that loans are going to be another one that kind of complicate things a little bit because when we take out the loan it's going to go on the books as a liability so it's you've got kind of an accrual component there and you also have to break out the interest and interest on the payments and then the sales tax payable taxes always mess things up so now we've got this kind of accrual thing where we have to put the payable on the book we've talked about a few ways you might deal with that if you wanted to kind of try to simplify things depending on your system and then the equity represents the assets minus liabilities or the book value which because we're sole proprietorship here is broken out into one equity account and then the draws and investments the opening balance equity we saw is kind of like a QuickBooks account that is a holding account so it would be best to kind of take the money out of the opening balance equity account and net income represents what's on the income statement which once again shouldn't really be on the balance sheet but QuickBooks is trying to show us how it's connected to the income statement if it was a corporation you have like retained earnings and and that these common stocks and the retain it's almost easier than a partnership because the retained earnings then can be allocated to equal standard units of shares so the shares are what determines who owns what as opposed to a partnership where you'd have to track multiple capital accounts and their draws and their investments possibly if you're breaking that out because and they'd have to tie that out in accordance with the partnership agreement which gets kind of ugly can get kind of complex so then if I go to the profit and loss which is also called the income statement the other side of of our major financial statement reports we've got income and you'll note normally the income account is just something like service income or inventory income or you might have a couple different subsets but here we listed out the income basically naming who we got the money from often times that is something that you might do if you're building your income statement from the actual bank feeds so if I'm actually using the deposit form because I don't have that added detail that I have with the invoices and the sales receipts then I might just want to have more detail on my actual income statement naming the big vendor a big customers that gave us the money so what I mean by that is normally you can you can have just call it income whatever your income is whatever you're getting it from and in a generic format and then you can break out the added detail by getting the sales by customer and sales by item the sales by who you sold to and the sales by what you sold but you can't construct these two subsidiary reports if you're just using a deposit form to record revenue you would have to use the invoices and sales receipts the forms QuickBooks is designed to create revenue with so that's why you might end up breaking this out in in a lot more detail if you're in that fashion if you're building your financial statements from the banks statements themselves or the bank feeds themselves cost to get sold is related to inventory so it kind of throws kind of messes up the system makes us do an accrual type of thing oftentimes making it more difficult to build the financial statements directly from the the bank feeds and then we've got our expenses and then we've got the interest interest kind of messes things up oftentimes because we have to record the loan payments in accordance with amortization this is actually interest income doesn't throw things off as much and then the unrealized gains and losses that are related to the investments now let's look at some of the other reports I'm just going to go through it I'm going to go to the report center and we'll just give a quick recap of all these other reports can be kind of overwhelming but they're all tied to you want to think of them as all related to the major financial statement reports they might be giving you more information about the major financial statements report so we got the company financial standard this is the same breakout as if I go into here and I see these drop downs but they give you a little little recap of the reports so the P and L we opened up the profit and loss detail has a little bit more detail you could dive into that if you want profit and loss year to date comparison report now these are reports that you can actually kind of generate from the standard profit and loss so if I went into the profit and loss and wanted to see this broken out by month for example I can hit the drop down and go a month by month breakout I only have like a few months of data in it but it looks like that or you could break it out by quarter if you wanted to do that this gives you the quarter and the total or you can do a comparative report where you can go to the customize up top I'm going to put this back on the total and I'm going to make this from let's say 10 0 1 2 2 2 10 31 2 2 and then I'm going to say I want to the previous period the previous month and then show me the changes so I can and I can also do the prior year as well so then I got these comparative reports now I like to just build these comparative reports this way rather than use QuickBooks reports because if you can build them you have a lot more options I can compare last month to this month I can pair last quarter to this quarter I can see the two quarters added together and you can do the same thing on the balance sheet so you want to experiment with those settings you can also compare the current year to the prior year this month to last year at the same month and so on right so you go on for quite some time doing comparative reports so profit and loss previous year comparison another comparative report you can build profit loss by job that would be specific if you have a job cost type of system so that would like construction or something for example profit or loss by class so we talked about the classes this is another one you could build this as you the way you know you could turn on you know you could use your your tools up top to show it by class so we have it here shown by class but in any case you've got the two classes that we set up you might not be using class tracking but we talked a little bit about it so if you got class tracking turned on then of course you can run reports related to the class tracking we've got whole courses going into class tracking in another section you can dive into if you want profit and loss are unclassified we've got the income and expenses so income by customer summary so now this is the report that's that's given you information related to the income statement now so if I go into this item we've got the income by customer now note you would think that the total right here would tie out to the profit and loss report on the total income so I'd say the total income let's change this back to from 010122 to 123122 and so there we have it and the total income is here but we're not going to get all the added details not going to tie out because we used we we used the deposit forms to create our financial statements instead of using the income type forms invoices and sales receipts so those are the pros and cons you lose some of the detail of this report this report is no longer really all that useful because because we're using the deposit form instead of the the invoices and sales receipts income by customer detail same thing breaking out the customer information notice we still do have the customer information in the customer center so I could still go in here and I could see the deposits in here but it's not we don't get the added detail of breaking it out in the reports oftentimes so expenses by vendor summary so now we've got the expenses broken out by vendor we don't have the same problem on the expense side of things so the expenses by vendor if I go from 010122 to 123122 should still be useful however we put a couple things in here it's just PayPal probably shouldn't be a vendor here that's kind of thrown and the stripe which are kind of throwing things off that report not I don't use it quite as often as the income by customer or income by item which I think are often more useful items but note that you once again still have that vendor center information where you've got your vendors broken out thusly and you can see the items that were paid in here as well so I'm going to close this back out and then we got expenses by vendor we've got the expenses by vendor detail income you got a graph which isn't that useful but could be useful I would make those in excel you can export these reports and generate them in excel which is kind of nice and then you've got the balance sheet which we talked about that's what we've looked at the balance sheet detail the balance sheet summary this is like a shorter balance sheet which which is going to group things together by class as opposed to giving you all the counts within it this is a good report to start out with when you're giving other people the report I don't think it's as good for internal use but it's more simplified looking so it doesn't overwhelm people as much you got the balance sheet previous year comparison we've got the comparative reports you can build the comparative reports just like we talked about with the income statement you got the cash flow reports this is the other kind of big financial statement reports but the reason that I don't really count it as one of the major two financial statement reports that we're constructing as we do data input balance sheet and income statement or profit and loss is because you you kind of construct the cash flow after you've made the other two reports so even though it's a financial statement report it's not really being built in the same or at the same time right you would build it kind of afterwards typically if you were to construct it but now it's going to be breaking up this information on a cash flow basis there's three components to it the operating investing and financing we've got a whole course on cash flow if you want to understand that report better if you could build a statement of cash flows you're really doing quite well in understanding it then we've got the customers and receivables this is the supporting the accounts receivable account here so all these reports are generally tied into the balance sheet of accounts of accounts receivable which is an accrual account so if you have accounts receivable you're not really constructing your financial statements based on or directly from the bank feeds because you're going to have to deviate onto an accrual kind of component and then the AR aging is going to track how old the accounts receivables are so you can try to get paid on them the AR aging detail same thing with more detail open invoices the invoice is the form that we use to make a sale if we make the sale on account meaning we didn't get paid yet we sold something and we expect to get paid like in 30 days or something that's the form that increases the accounts receivable that we then have to track who owes us the money collection reports we got the average days to pay so how long does it take for them to actually give us the money average days to pay here we got the customer balance so you got the customer balance summary meaning how much do they owe you that backs up the accounts receivable we can also see that in the customer center so if so notice we have the detail here which are normally deposits for us but if we were invoicing clients and getting paid later then we'd have the invoices and we've got the outstanding balances here as you can see with this particular customer and then the customer balance detail so it's going to show us who owes us money the opening the invoices and the detail related to it unbilled cost by job which would be relevant if you have a job cost system transaction list by customer and then you got your lists which is the customer phone list which is more of a contact list rather than supporting the financial statements customer contact list item price list we probably don't have much in the customer list if we built our financial statements directly from the bank feeds because we probably just added the name of the customer like amazon or whatever and then and that's it so we might not have a lot of contact information related to them if you have a business where it's quite important that you have good relations with your customers all the time then you want to have their contact information and list that stuff out so you can put them on the mailing list or whatever then we've got the sales by customer so these of course are supporting the sales line so we've got the sales by customer summary and so notice we saw a sales by item up here so I think this might be the same report we looked at from 010122 to 123122 and so this is the report that I was kind of thinking about when I looked at that prior one which normally is supporting the line item of the profit and loss here but we don't have much detail related to it because we didn't use the invoices and sales receipts for the most part but just use the deposit form so we're losing the detail for this form it's not supporting this line item down here on the income statement that's the cost you pay for the ease of using the bank feeds to construct your financial statements just to contrast that with the item up here for the for the that's in the company and financial that I looked at the income by customer summary notice that's a similar name income versus sales I think they might be trying to take into account here the ends and increases and decreases by customer but I think the general report general report we would look at to support the sales line item would be in the sales item down here and this one which doesn't give us as much detail because we didn't we used the deposit form okay sales by customer detail gives us the detail of that similar report sales by ship to address if we had that information in there pending sales then we got nice little graph sales by item the items are the things that we sold so if I open this up from 010122 to 123122 then we we we're not going to tie out to the actual sales by the things we sold here because although we had a couple examples of items we sold using sales receipts and invoices and the items to populate them we made a lot of our sales using just a deposit form so this number normally would tie out to the sales line item here it does not because we used the deposit form and so we lose a little bit of that detail that's why we kind of broke out more information on our income accounts on the income statement instead of just having like one or two income account line items that would further be broken out by these subsidiary reports okay so then we've got the sales by rep if applicable then we've got the jobs this stuff would mainly be used if you had a job cost system and time tracking and mileage and whatnot we got the vendor and payables this is similar to the accounts receivable in that these reports are supporting the balance sheet report this time the accounts payable items so if you don't have any accounts payable if we're using bank feeds in order to construct our financial statements then we won't have any accounts payable that we're tracking the larger the business gets the more likely you'll track the accounts receivable and then you'll you'll have to be dealing with who you owe the money to then you have an AP aging report seeing how past do the stuff that you owe is AP aging detail vendor balance details which will tell you who you owe the money to vendor balance detail unpaid bills bills are the things that increase the accounts payable which if they have not yet been paid gives you the outstanding balances you can also see that information in the vendor center so here we basically have checks because now we're paying out but if we were entering the expenses and paying them at a later time we would list these balances here because we would have payables and we'd have to track who we owe the money to and try to manage our cash flow and pay them as late as possible as long as we don't get penalized is the general game played so then we've got the purchase by vendor so purchase by vendor summary purchase by vendor detail purchase by item which is going to deal with inventory items and these these are kind of dealing with inventory oftentimes which is another item which would more complicate reports that were made just from the bank fees so then we've got the purchase orders which are related to the inventory or buying inventory typically and then we've got the inventory reports themselves the inventory valuation summary clearly giving detail about the inventory line item so we have a couple things here but it would only be useful if you're using a perpetual inventory system tracking inventory within QuickBooks if you're using a periodic system tracking inventory outside of QuickBooks then this report's not going to be tracking the information for you if you don't have inventory then of course you wouldn't be using these reports as well then we've got the employee and payroll these reports would only be applicable if you have payroll turned on and if it was real-time in practice you would want to be paying for payroll typically although there is a manual payroll you can use to practice with which is a great tool for practice but you'd have to turn that on and then these reports would give you a whole bunch of whole whole world of reports that are going to help support the information that's on the balance sheet and the income statement but also give you the data that's necessary to support the creation of the quarterly reports the 941s the year end reports the 940 the the w2s the w3s and so on banking reports we've got the deposit detail check detail this is information you can kind of get from the balance from the balance sheet by just you know it's basically the the register detail if i double click on it you can then sort this detail by deposit if you want but these reports give you a little bit more information on that report than just a transaction report in any case to check the missing checks then you got the reconciliation and the the previous reconciliation we saw this when we did the bank recs this report is different than the other reports because it's not being constructed how do we enter data but instead is a comparative report an internal control type report then you got the accounting and taxes the trial balance hopefully i've convinced people that the trial balance is a good report to to use in practice 010122 to 123122 it's not something that i'm gonna customize it not something that you would typically give to like a client but if you're just entering transactions and trying to see what happens to which account and drill down and on the transactions with the zoom if you can just remember that this is the balance sheet on top of the income statement or assets liabilities equity and then income and expenses and you can see what those differentiations are you can you can work with a lot less open windows on the left hand side and more easily scroll back and forth between the data input and then seeing where that data input went so i highly recommend that report the general ledger report is kind of like the report if you look went to the if you went to the the trial balance and double clicked on any of these items then you get that transaction by account this is basically a general ledger report in essence for the checking account right so because it gives you the detail within it so the the general ledger we typically from an accounting standpoint just see that as all the detailed all the all the detailed information from 010122 to 123122 but now it gives it you know all of it in in one area and this is a good report that you can then filter by if you wanted to filter it down but a lot of people are just going to go if you're working inside the system to the trial balance and then double click on whatever account they're looking at transaction detailed by account so now you've got the transaction detail listed out by the account this is a good report these the journal report it you would think you would just have journal entries like meaning the types of forms we use are here and if it doesn't have a form that's going to be used then you enter a journal entry company and the journal entry make journal entry is is the default if there is no form to use but this report actually is going to take all the all the stuff you enter so if I run this report it's going to show me from 010122 to 123122 all the transactions we put in place with a debit and credit which is a great tool if you're doing if you're trying to figure out and the accounting of what is happening it's great to put the data input in look at the financial statements see the impact see the two accounts that are affected if you're trying to learn debits and credits then this report gives you the debits and credits and you can kind of see what's happening with each of the forms in terms of debits and credits you also might use this form if you're trying to bill somebody and you're trying to make the bill billing based on how many accounts you hit you know so you say if you if I if I did work within this range of accounts I'm going to charge you this much versus if it goes above this range I'm going to charge you this much this is a good report for that you can filter it too by types of transaction so you can kind of hone down on certain stuff good good report and then you've got the audit trail I won't get into that we got the avoided detailed transactions uh summary so avoided items avoided detailed transaction detailed transaction list by date this is similar to this report another really good report to go into because it gives you the detail from 010122-123122 you can sort it in a similar fashion because it gives you the type of item here you can sort by type if you want and if you're supervising someone these two reports this one on the journal report are good to see what they actually did and again if you're billing someone then you might bill them on how many transactions you had that's another way you might bill them right you might say if you're within this range of transactions this is how much I bill you if you're within this range now the transactions some of these could be quite complex that's why the journal report you might try to build them on how many how many accounts were impacted because the journal report will then show those longer journal entries but if you're if most of your transactions are just two accounts impacted then you might use kind of this report to see the activity that you've done the data inputs you've made and so then the lists you got the account list the fixed asset list the income tax list and so on and then you've got your budget reports budgets are going to be something that's that is an added thing that bookkeepers or accountants would do because you not only need to know the accounting of it you're going to have to also kind of take into consideration other things so management needs to be involved because they're going to have to project what they're going to do differently in the future from the past and and then the accountants on our side we're going to have to say okay then what's that going to look like from a financial statement basis taken prior your data looking at that so we have a whole nother course on budgeting or section if you want to look at that and then lists basically we've seen most of these lists in other sections but these are more informational reports like you know given you the contact information and so on that kind of stuff so there's the general concept remember the major reports balance sheet income statement all other reports although overwhelming aren't actually that difficult to think about typically because usually they're just expanding on or giving more information about one or multiple line items on the major two financial statement reports the basic main things that we're building those being the balance sheet and the income statement otherwise known as the profit and loss