 QuickBooks Online, Estimate Form. Get ready to start moving on up with QuickBooks Online. We're gonna be using the free QuickBooks Online test drives searching in our search engine for QuickBooks Online test drives, selecting the option that has Intuit.com in the URL, Intuit being the owner of QuickBooks, selecting the United States version and verify that we're not a robot. Zooming in a bit, holding down control up on the scroll wheel currently at 125% on the zoom in. If you select the cog dropdown, you can see we could toggle back and forth between the business and accounting view. We will be working in the accounting view. We might toggle back and forth periodically to see where things are located under the two views. Right-click it on the tab up top to open our reports and two new tabs as we do every time, duplicating the tab. Right-clicking on the duplicated tab to double duplicate, duplicate it again. Back to the tab to the middle, we're gonna go to the reports on the left-hand side, open up then the balance sheet report, tab to the right, then go to the reports on the left-hand side, this time open up the profit and loss report. Closing the hamburger up top, scrolling up, that's not scrolling, that's zooming, that's zooming. There's a difference, scrolling up top and then we're gonna go into the changing of the ranging from 010122 January 1st, 2022 to 123122 tab, run it to refresh it and then tab to the left. Closing the hamburger, hamburger, and then I'm gonna go up top and do the range change from 010122 to 123122 tab, run it to refresh it. And then we're gonna go to the tab to the left, that's the setup process we do every time. If I hit the plus button here, 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. We've been looking into the cycles for the customer cycle. Remembering the customer cycle, we expect generally to end with money going into our checking account at the end of the cycle. That could happen various different ways. The easiest way would be like gig work, where we're just getting paid by a platform like Amazon, like YouTube or Google or whatever. We get the deposit possibly from the bank feeds and we've record the revenue with that deposit. Slightly more complex is one where we have a cash-based system, but we can't just wait till we deposit because we have a cash register possibly. So we make the sales receipt in like a restaurant situation or food truck, for example, and then make the deposit. Or an accrual system, where we have to invoice for work we did, possibly in a bookkeeping system, a law firm, landscaping, and then we have to receive the payments, lowering the accounts receivable, and then make the deposit. Then we talked about some other areas here where we might have to reverse a transaction. Now we're looking at the estimate form. Estimate forms will typically only be used if you're in like a specialty type of area and they're usually gonna be applied when you're in a full invoicing type of accrual system. In other words, the estimate will often happen before the invoice. Let's jump on over to the flow chart here just to get a view of this with the arrows. So we've got the invoice, then we got the receive payment, we've got the deposit. Now in some cases, you might have an extra step before the invoice, which would say this is my estimate and you can imagine that estimate taking different forms if you're in a construction job, for example, you might have bids or something like that where you're basically making up the estimate to then provide to the potential client to see if they're gonna be accepting the estimate. And if they do, then you move forward from that point in time. Now construction and long-term job cost stuff can get a little bit confusing because the revenue recognition can get a bit tricky because normally we recognize revenue when we complete the work, when we do the job, when we give the inventory or do the work, but if you have a very long job cost system, you might have different kind of cost assumptions which can get like a little bit confusing like completed contract or percentage of completion, for example. But you can also use the estimate. And so those are specialty areas. We've got whole courses on that. We'll touch on some of those concepts here. But again, that's a specialty area and if you are a bookkeeper or working in accounting, part of your goal is to try to think about what kind of clientele you wanna be picking up which will oftentimes be specialized in terms of the size of the client and or the industry that they're going to be in. And so if you're working in a construction, that could be a good specialty area, but you also wanna know what you're getting into when you're picking up different types of clients, right? The other way you might use an estimate, for example, is if someone just calls up and they're saying, I want to buy this, that or the other thing, then you might use the estimate to basically populate how much you think that's going to be costing, for example, so that when they come in, you could create the invoice. You could create an invoice to do that, but the estimate could be used kind of on an estimating form that way as well. It kind of looks like an invoice. But the estimate is not gonna record a transaction. So the estimate is just going to be an estimate which you could then track to see if the estimate has been accepted, if you're gonna move forward with the job and you could use the estimate then to create the invoice from the estimate if you so choose. So let's take a look at an estimate. We're gonna go back on over and just check that out. So if I hit the dropdown and we go to the estimate and open that one up, let's just do our normal thing. I'm just gonna say AAA estimate and I'm gonna make that our customer. I'm not gonna add an email address, I'll just tab through here and then billing and then estimate date. This is the current date. We'll keep that expiration date. So you could have an expiration date if you want it to expire, if no action has been taken on it. And then you can add your items just like you would for like an invoice. So I can add, I'm just gonna pick some items that they have here. So let's say they call up and they need a job or they wanna purchase something and we just say, okay, I think this is what it's gonna cost you. We're gonna need a couple pumps on this and we're gonna need, I'll tell you what we need. We need some rock foundation. We need like five of those. And notice these are populating just like it would on an invoice. So it looks much like the invoice. Need some service items. And notice how easily this is populating over here due to the items having been set up quite nicely. And if you have a construction contract, you know, that it could be a quite complex type of estimate. If you're in like a construction company, then it's a specialty area just to make a proper estimate, right? Because you have to make the estimate competitive so that you can bid with other people and also that you can have a good profit margin on it as well. So it's a kind of a special type of area or you can imagine an estimate being used if someone just calls you and say, I'd like to buy this, that and the other thing and you make up the estimate so that you can see how much it would cost including the sales tax. So it looks much like an invoice now. So now I can tell the client, hey, look, this is what the estimate is going to cost and so on. I can add the lines. I can clear the lines. I can add another subtotal if I want. So if I had a complex estimate, I could put the subtotal up top and say, that's that part of the estimate or whatever. And then I can have another item down here. So that's kind of a fancy bit. Message to display on the estimate. So we could put a message on it. Message display on the statement and then we can have any attachments that we need with it as well. We've got the cancel, clear, print preview. Let's see what it will look like. This is an important to form that you might take some time into customize or whatever because it is going to be a form oftentimes that you will be providing to clients and possibly doing so depending on the industry. There's my little high message there in order to try to bid for a job. So it's kind of like one of your initial, one of your initial contact forms with a potential client. So you wanna make it look clean, nice, and so on. Make it reoccurring so you can make a reoccurring estimate. You can customize. You got the more options to copy it. So if you do have complicated type of estimates, then, and it's a complicated invoice, then maybe you can go to the invoice and copy it over instead of recreating the whole thing. You can also put the estimates on two different tabs you'll recall because we can have two tabs open at the same time and see them on two different screens if you need to duplicate something. And the audit history, we can save. We've got the save and send or save new and save and close. Let's save it and close it. Now this isn't gonna have any impact on the financial statements. It's just an estimate. But then we would want to be tracking our estimates to see if they're gonna follow through with them, which we might do in the sales area, which would be kind of like the customer center. We're gonna close the hamburger up top. So you've got the all sales forms, which is a little bit different location in the business view. I believe it's under the bookkeeping in the business view. But I can sort in here now for the type of transactions of the estimates if I so choose. And this, if you use estimates, would be another common form that we would be tracking. So now we've got our estimate form. We can send it. We can convert it to an invoice, mark as accepted. So, and that would be the general process on the invoice would be that we might convert the estimate into an invoice eventually, but we might go through this process of saying, has it been accepted yet? And then convert it basically to an invoice. So before we do that, let's check out the rest of the ways we might see that. So there's the estimates. And we can also sort the estimates by the other dropdown here. So we've got the pending items, accepted, open, closed, converted, declined, expired. So you might have the different names, again, according to the process that your estimate is going through. So, I mean, in a typical thing, you'd have a pending estimate might be one that you're waiting to see if it's gonna be accepted or not accepted would generally mean that they've accepted your estimate. So now you have the job, but you haven't really done anything yet. So you haven't converted it to an invoice really at that point because you haven't really done any work. Open generally would mean that now you're talking about if in a job cost system, it's like an open job that you're working on at this time, but still you haven't finished the job. So usually if it's a small contract, you wouldn't bill until the end of the job. Or if it was a long contract, you might have a different billing kind of cycle with the percentage of completion or something like that closed means the job is over. And then converted and so if you've converted the job and whether the job is declined or basically it's basically expired. So that might not be the same. You might not have the same terminology for all different kinds of businesses. And you might not use any of these terminologies if you're just using an estimate, basically to give an invoice estimate for someone that's gonna come in and make a purchase or something like that. In that case, you might just have an estimate that you would then convert to say an invoice or something like that. So we'll go back. So it depends on the kind of work that you are doing. We can also go to the tab up top for the estimates. And once again, we've got our estimates. We've got the pending, declined, accepted, closed and converted. And so once the job is closed, you would, that's when you basically would make the estimate into basically an invoice, create an invoice from it and bill the client, typically, depending on what kind of job cost system you have. Okay, and then you can also go into the customers. It's another area where you can track this information and we can look at AAA right here. If I go into AAA, then we have the estimate once again, and it's pending. So the next thing we can do is we could convert it to an invoice or we can try to change, we can go through that cycle of statuses if we so choose. So I can go into this estimate, for example, one way we can do it. You could see the status right here as pending. So I can change the status to accepted. So now I can, that would basically, I could put a buy and a date if I so choose, which will be internal kind of information. No transaction has still been recorded, but now we're gonna just change it to accepted. You can also do that if I go over to the sales tab and we go into this one. The next item, it's gonna say here is convert to an invoice or didn't have a status thing. Here, an update of the status, let's go into the estimate here and accepted, convert to an invoice. Or if I go into it, let's go into it again and edit it. I could say the status could be closed or rejected. So I could say closed status and then save that. So now I've moved the status to have been closed and then I'm gonna actually create an invoice from it and then I'm gonna change the status to converted. So it's been closed and converted. I would call the status at that point. So let's say we say, and then if I wanted to sort it over here in my estimates area, then I can sort it by whether it's accepted here so I can look at all of them. I could see just the accepted item. Let's go ahead and create an invoice from it now. So let's convert it to an invoice. So I'm gonna convert to an invoice and that's gonna take the detail on it and make the invoice from it. Now notice this also will depend on the kind of business that you have because you might be, if you're in a construction business, you might have the invoice that mirrors your estimate because you might say, hey, look, I've given you my estimate and I'm gonna make an invoice that basically matches the estimate or you might say, hey, that's just an estimate and the invoice you might create from the actual information that you're putting together or you might use the estimate as the baseline and then see the adjustments to it. So it'll kind of again differ possibly depending on how you're putting this together. But if you had someone that just, you said, hey, this is what you called up and said you wanted and now you're converting it to an invoice, then it would be a straightforward process of just taking the estimate and making an invoice from it. And now we just have a standard invoice and the invoice would of course be doing what normal invoices do. It's gonna be increasing the accounts receivable because it's an invoice by the full amount, the 273, 240, it's gonna be increasing the sales but only by the 2620 sales tax increase that's a payable by 112, 40, a liability and then inventory is gonna go down by any of these items that are inventory items and the other side is gonna go to cost of goods sold for an amount not on the invoice but driven by these items. Also the accounts receivable sub ledger will be impacted for the customer of AAA and the sub ledger for the inventory will be tracked by unit as well as dollar amount in a sub ledger. So we've seen that in the past but I'll just save it and close it here. Save and close. So now we've got the actual recording of the invoice. So if I went to the financial statements, now something has happened to the financial statements, the key point here being that nothing happened to the financial statements when we made the estimate. So now you can see the accounts receivable going up with the actual invoice and we're into our normal sales process at that point in time. Now, if I go back to the first tab and now it's no longer in the accepted area if I look at all of them, you've got the AAA has now been converted. So convert it, you might see closed and converted kind of in a similar fashion because again, you would think that when the job is closed that's when you would bill but again, you could have different cycles of your billing process depending on your method which might be like percentage of completion method type of thing. So if I go back on over to the customer then of course and I go into AAA and they have questions about this, now I've got the invoice and I got the estimate is marked as closed. If I was to go into the estimate then I could see it's marked as closed here and I've got the link to the invoice so that I can go to the invoice this way. These nice little links within the system are a great tool for internal use for communication with the customers and whatnot if there's any problems with them. So that's the general idea of the estimate. Just remember the estimate doesn't have any impact on the financial statements but it could be one of those forms that you can use to track before the invoice. In that way, the estimate and the purchase order that we talked about in a prior presentation are similar. These are like one of the, basically the only two forms here generally I believe the only two forms here that are look like they have a financial transaction but don't all of the other forms basically are gonna have an impact on the financial statements. You're gonna have two accounts that are affected the balance sheet and the income statement are gonna be impacted. There will be a financial transaction. These two are very important depending on the accounting cycle that we have in order to track them but there's no actual financial transaction going on with the case of the estimate. We're hoping that we get a job in the future. We're making contact. It's like the initial contact but we haven't made a commitment. There's been no sales. We haven't given any inventory. We haven't done any services at that point in time. We're just tracking that initial contact which is still important but not impacting the financial statements.