 zero accounting software 2023 financial reports generated from bank feeds get ready to become an accountant hero with zero 2023 here we are in our custom zero homepage going into the company file we set up in a prior presentation that's the bank feed file let's duplicate some tabs to put some reports in by right clicking on the tab up top and duplicating it and then we'll right click on the tab up top again and duplicate it again back to the tab to the middle accounting drop down we want to pick up that balance sheet report and then we'll tab to the right accounting drop down this time the income statement otherwise known as the profit and loss changing the date range on the P&L I'm gonna bring it back to 2022 because that's the time frame that our data input has been input in going to the end of December 2022 let's update there now in prior presentations we have primarily been using the bank feeds to populate our reports so if I go to the first tab we've been going into the accounting drop down into the bank accounts and we've uploaded information from the checking accounts so we imagine we pulled in information from the checking account from the bank as well as a credit card and the PayPal accounts for all of these I'm going to go into the checking account we have basically been constructing our books for the most part directly from the bank feeds and just a quick recap noting that I'm going to go to the flowchart over here this is a QuickBooks desktop flowchart but we're just looking at the flow of the forms that you can only do that if you're in certain industries so we talked about on the revenue cycle for example if you're gonna wait till the money hits the bank before recording revenue then you're in an industry where you can do that possibly gig work or something like that is an industry where you can kind of construct your books from the bank feeds oftentimes however sometimes you have to step away from that if you're in a cash register situation for example you might have to first do the data input on your side use the bank feeds to match and if you have an accrual component or inventory which often forces you into some cruel components then you're gonna have to see how the bank feeds are going to fit into your accounting system so for the most part over here we basically imagined that we were in an industry where we can put the financial statements together from the bank feeds and so what we did is we said when we added the bank feed information there was nothing in the account transactions we added the bank side of things and then in the reconcile tab we basically have the banking information on the left and we created our financial transactions on the right from that so now that we've done that let's go into our reports looking at the major financial reports balance sheet and the income statement and then a little bit on the sub reports the other reports that usually give more information about one or multiple line items of these major financial statement reports that have been created now remember that the use of these financial statement reports if you're in the United States in your small business you're going to need the financial statement reports at the least for tax preparation generally and if you're a schedule C business a small sole proprietorship you basically need the income statement because that's what the schedule C form is going to be so note you might be saying well why do I need to do the accounting software because I'm getting this balance sheet I don't even need the balance sheet to do my taxes or something but remember you can't really get the income statement to be completely accurate unless I mean you could but you have a lot more internal control and assurance if you do the full double entry accounting system which means you want the balance sheet as well and if you're doing internal reporting for your business then the full financial statements are going to be important for your own decision-making processes and then you also might have external reporting that you might have to do as well possibly in order to get a loan or for reporting to owners of the company or something like that so those are the uses of the financial statements the major two financial statements being the balance sheet and the income statement now note that the balance sheet is the double entry accounting system where we have the assets the liabilities and the equity the total assets equaling the total liabilities and equity let's just go through some of these line by line and see how they were constructed with the bank feeds so we have the checking account if I go into the checking account the checking account is going to have more types of transactions in it than any other kind of account because the checking account being special being unique due to the fact that it is the lifeblood of the company in other words the cash if I look at the flow chart over here is in each of these cycles each of these cycles is going to have cash in the cycle somewhere not every transaction will have cash in it but cash will be in more transactions than any other type of account and cash will generally be involved at some point in each of these cycles so cash is going to be obviously very important and the fact that cash is involved in each of the cycles in some way shape or form is the reason that we can basically construct our financial statements from the bank feeds in some instances so we've got most of the cash accounts going to give us more kind of transactions than any other count if we build it if we built we build it if we built our financial statements from the bank feeds directly you would expect the cash accounts to have received money forms and spend money forms those of the two types of transactions that come through the bank feeds and then you could also have transfers as you transfer between like PayPal in your account or your checking account or your credit card accounts and here and so those are going to be that's the checking account the other side of the checking account is generally going to go to expenses and income for the most part right and that's constructed in the income statement as we go alright so if I go back to our cash account let's take a look at the rest of some of the other accounts here we've got the accounts receivable now note that the accounts receivable is an accrual account the only reason we have accounts receivable here is because we deviated in some ways from a cash basis to an accrual basis if you're constructing your books completely from the bank feeds you will have no accounts receivable so that means that if you have to invoice people and track whether they paid you or not you are doing an accrual thing and you're going to be generating an accounts receivable account which will help you to track that payment and you're going to have to figure out how the bank feeds are going to fit into your process which we talked about a little bit in prior presentations and then we've got the investment account so this is we're imagining investments in stocks and bonds we talked about how this one can be a little bit tricky when you're tracking your your information with just the bank feeds because remember that the stocks and bonds could go up and down as you as you get cash flow meaning income from revenue and interest and when you purchase and sell the stocks and bonds but most of the time people also want to track their stocks and bonds on a market value basis given the fact that they're publicly traded and you know what the market value is and therefore you have to to do that you'll have to do periodic adjustments to it also just remember that investments like stocks and bonds should not generally be if you're in a sole proprietorship business for example on your business side of things unless it's a short term investment that you're going to use for whatever your business is or your business is the business of investing in stocks and bonds because what it should have then instead is is we separate the personal and the business this business for example is not in the business of stock and bond investment but in gig work or whatever so I wouldn't want my stocks and bonds here instead when I get my money I want to transfer it through a draw to myself and then invest personally in stocks and bonds giving me that separation between what my business objective is here specifically my personal objective you could do that by the way with one zero account trying to break out your income statement between business and professional if you wanted to do that sometimes it's not recommended because it could be easier to mingle things up that way but if you have a small schedule see business that might work now inventory is generated here noting that inventory is another one of those things that will often muddy up being able to construct our financial statements simply from the bank feeds because when we have inventory we typically have to do and a cruel type of thing so we talked about different ways that we might deal with inventory you might deal with it by a by a periodic inventory system tracking the units of inventory outside of the zero system or you might track it perpetually in the system and think about how your bank feeds will fit into that process primary got investment this is another investment account that we had drooped this is another investment account so then we have the fixed assets the fixed