QuickBooks Online 2020 to cash payment for inventory linked to a purchase order, or P OE, get ready because it’s go time with QuickBooks Online 2022. Do we are in our get great guitars practice file that we set up from the free 30 day trial holding down controls scrolling up just a bit to get to that one to 5%. We’re currently in the homepage otherwise known as the get things done page.
00:29
And the business view as opposed to the accounting view, if you wanted to go to the accounting view, it’s something that you can do by going to the cog up top switch into the accounting view, we will be toggling back and forth. And or taking a look at the accounting view in the sample company file just to get a feel for where different things are located in the different views.
00:49
Going back on over to our QuickBooks file, we did last time entered purchase orders, we did so by hitting the plus button up top, we went down to the purchase order the purchase order representing a request for inventory. In our case for guitars from the vendors.
01:06
When we enter the purchase order, we’re not actually having any impact on the financial statement that be in the balance sheet or the income statement. But whether having a request. In other words, we haven’t made a payment,
01:18
we don’t have claimed to the actual inventory at that point in time, we expect them the inventory to be received and be received with in essence a bill in it. In other words, we’re going to imagine in our epic story about get great guitars,
01:31
we’re going to get some boxes of guitars with possibly bills inside of them that are going to request payment, we can enter the bill in our system at the point in time we get them or possibly we can make the payment directly at this point in time,
01:45
which is what we’ll do this time we’re going to enter a check or expense form paying the bill directly when we receive it being in essence more on a cash basis. In that sense. Next time or next month, we will then use the bill form to link to the purchase order just to get an example of the two items or the two methods we can use.
02:03
So first, let’s open a few tabs up top, we’re going to go to the tab up top right click on it duplicate that tab, go to the tab to the left, right click on it again, duplicate it again, go to the tab to the left, do it one more time right click and duplicate again, we’re going to be open in reports.
02:19
As that is thinking let’s see where the reports are located in the accounting view Jumping over to the sample file. In the accounting view reports are on the left hand side in the reports area. Jumping back on over to the business view I’m in the second tab. The reports here are located in the business overview area.
02:44
And then we’re going to go into the Reports section, we’ll start off opening our favorite report, the balance sheet report, it needs no introduction of report that tells us exactly where we stand at a point in time, we’re going to say that the range is going to be Oh 101 to two to 1231 to two and run it. And then we’ll go to the tab to the right of it. Go back to the business overview.
03:15
This time opening up the P L the profit and loss the income statement it can be called closing up the hamburger and then doing the range change from a 101 to two to 1231 to two and running it. Lastly, there’s nothing in it by the way. That’s that’s what we want at this point in time.
03:34
Lastly, we’re going to go to the tab to the right, go back to the business overview and this time we’re going to be opening up the trustee Trial Balance otherwise known as the T V trial balance, which doesn’t stand for tuberculosis, it’s trial balance.
03:48
That’s what the T V stands for closing the hamburger doing a range change from Oh 101 to two to 1231 to two and running it.
04:02
There’s the trusty trial balance. Okay, let’s go back to the first tab. If we’re tracking the purchase orders, I’m going to go back to the one to 5%. We then could go here I can go to the Get Paid area. And say let’s imagine in our story here that we now have these boxes of guitars that we have received. We can then go into the vendor area. If if we want to track the purchase order for the guitars we can say oh, that box is from Epiphone.
04:30
We can go into Epiphone and we can see the activity here for the purchase orders and then create a related bill for it or in our case, we’re going to try to connect it with a check or expense forum or you could track for the all the open purchase orders which in this case are not in the same vendor center area as they are in the accounting view.
04:54
In other words, if I went to the accounting view, if and I went into the expenses area, then you’ve got The same vendor section that we’re looking at.
05:02
And you also have this Expenses tab, which allows us to sort by transaction type for basically the vendor cycle. In the business view, they have stored that under the bookkeeping little calculator tab here, instead of in the vendor center area under the transactions, which makes sense, you know, I could, it could grow on me, I kind of like it in that, but you know, it’s, it’s different.
05:26
So let’s give it a shot, give it a chance, give it a chance for crying out loud. So we’re over here in the expenses area. And then I can close the handle burger, and you can sort it by the purchase orders, and then the open purchase orders, for example, and then apply that.
05:43
And now you can see all the purchase orders that are open, which would be a common way to be tracking that information, you can also run a report for the open purchase orders. Okay, so I’m just going to go and open up the hamburger again.
05:56
And let’s just open a cheque type of form assuming that we’re just going to instead of we got a bill. Now remember, there’s a difference between a bill that we get in just normal language, we got a bill from the vendor and a piece of paper that’s in the box and US entering the bill into the system.
06:14
Because I got a bill doesn’t mean I need to enter the bill into the system, because in our system Bill means that we’re increasing accounts payable, and I’m not going to increase accounts payable. Instead, I want to write a check directly. So therefore, I got a bill. That’s a physical bill.
06:29
But I’m not entering a bill into the system, I’m just going to write a physical check, because the check is the is going to be the decrease to the checking account. So you can see the difference in language that you don’t use day to day versus these forms which have a very specific meaning bill,
06:43
meaning we’re going to increase accounts payable and not pay it at this point check, meaning we’re going to decrease the checking account and we are going to pay it and we’re going to pay it with a physical check, which will have a check number related to it.
06:54
So we’re going to go into the check form here and check that out. It’s going to be going from the cash account. And the payee. We’re going to say is Epiphone so I’m going to type in Epiphone Epiphone and notice what it does here, it says,
07:09
Hey, I’m paraphrasing, QuickBooks is like, Hey, we’ve got these two purchase orders that are outstanding Is that what you’re paying Epiphone for? And we’re like, yeah, it is, let’s just add those in directly, I’m just going to add those in.
07:24
And I’ll add both of them into the same check both of them, boom. And there we have it, and then we can close that up. So now, now we’ve got our check. And we’ve got the check number is 104. I’ll keep that the date. Let’s bring it on up to 14 January 14 In our story.
07:43
So two days later, we got we got the guitars from Epiphone that we ordered. And notice it’s not a category item here, because we’re not going to apply it to a category when applying it to the inventory account directly. But rather, we’re going to have our our inventory items down below.
08:01
So here’s all of our inventory items, I’m going to notice that gives you a little link thing here indicating that it’s linked to a purchase order, which I believe you can click on, I won’t click on it here, but it might tie you to the purchase order.
08:13
Also, it’s tying in the particular customers for the customers that we had, that we had connected to to the purchase order to the purchase orders here. Now before recording this, I’m actually going to close it without recording it because I want to take a look at a billable feature just to see how it would apply here and some limitations possibly with it.
08:33
So I’m going to say do you want to leave without saving, I’m going to see yes. And then I want to go up to my cog icon up top and just show this billable setting, which is in the accounts and settings. And then it’s going to be in the expenses area on the left hand side. So we’ll be in the expenses area.
08:53
And then we’re going to go on down to the billing and expenses information. So this item here it says make expense items billable adds a line item that could allow you to basically make something billable on the expensive, so I’m going to turn that on. And then we have the option of marking up with a default.
09:13
So this would be possibly useful if for example, you were entering billable items, and as expenses like gas or utilities that you wanted to pull over to an invoice so that you can apply the customer on the bill and pull it over to the invoice and then you can mark it up with a percent markup if you wanted to.
09:32
So you could say I’m going to pull over my gas bill or something like that. And then I’m going to mark it up by some markup percent when I pull it over to the invoice I’m not going to choose that one here.
09:42
You can have it track billable expense and items as income and this is another kind of issue that you would like it to pull in to the from a billable expense to an income line item generally in other words, you would like it not to be a reimbursement generally which is one of the problems of Not using basically items.
10:02
When you when you use this billable type of feature, it would be nice that it wouldn’t, for example, have a decrease to utilities, if you made something billable, but instead had an increase to an income account,
10:13
you can have it in a single account or in multiple accounts here, I’m going to keep that as is. And then you’ve got the sales tasks, I’m going to keep that word is. Now this could be nice for the purchase of the inventory.
10:24
But it has a bit of a problem in that I believe, it’s still going to pull in the cost of the inventory instead of the sales price when we use this kind of billable feature. And that’s kind of a limitation here with regards to the connection. So I just want to just show you how that could work. And so let’s take a look. So I’m going to save that, let’s go save it.
10:42
And then I’m going to say Save and done. And then I’m going to go back in, I’m going to recreate my expense form or my check form, hitting the plus button, going back into the check form. And let’s make our check for Epiphone. So I’m going to say the phone on the check.
11:01
And so it’s coming out of the cash account, once again, I’m going to purchase I’m going to pick up my to purchase orders to populate it. So that pulls it in for the purchase orders. And so that looks good. And so then it’s as of the 14th, we’ve got our number, check number looks good.
11:21
And so I think this should have been 104, I’m going to change that for the practice probably 104 on the check number. And then the categories down here. Now Epiphone is pulling in the total is at the 3780.
11:36
So that looks correct. And then these two items, I’m going to mark off as billable attempting to to tie this bill on over to the invoice that I’m going to create.
11:47
In other words, when I make an invoice when I turn around an invoice this item, then I’m going to make it to Eric music and try to pull this information into the invoice now that I believe there’s going to be a bit of a problem though, because it’s going to try to pull them in at the costs here.
12:04
And you would think it would be nice can I believe this works a little bit better on the desktop version for some reason. Because if you have the actual inventory items, then you would think it would pull in the in the income item, or the income amount,
12:17
not the cost amount, which is what we’re paying for the retail amount is what it should pull in. But by using the billable item, I believe it’s going to basically pull in the cost amount. So let’s just check that out. So I’m going to save it I’m going to say save it and close it. And we’ll enter the invoices later.
12:36
But just to take a look at it. Now if I was to turn around and say I’m going to sell this with an invoice now to say Eric music and I was to type in ERIC music, Eric, music and typing that in, then we’ve got our information on on the right I’m not going to I’m not going to save this.
12:53
But if I just add this in, I can see that we have then the rate at the 400. Notice that if I type in actual an ELP guitar, the rate that we’re selling it for should be 500, not the 400. And of course I should have made it taxable on the on the actual bill itself to make it a taxable item.
13:15
But that’s not really the problem here. The problem is the fact that it should be pulling in basically using the item for the sales price so that billable you got to be careful with that billable item. The two things that you want to be careful with the billable item is one if you use a billable item, is it charged in the proper income account when you pull it in to the invoice and number two,
13:36
if you’re using inventory is charging the right amount on the form in terms of the sales price versus the cost. So we’ll take a look at that a little bit more when we get to the invoice. I’m not going to record this at this point of time. Just kind of be aware of that. I’m going to say do you want to leave without saving?
13:52
I’m going to say yes, the check. Actually, if we go to the balance sheet and see the impact of the check form, we can go into the cash and we of course will then see the check, which will be a decrease to Epiphone.
14:07
There it is if I drill down on it, then we’re going to have our check form here. So that looks good. So then I’m going to close this back out, and then scroll back on up and go back then to my report. The other side did not go to the income statement it went to inventory.
14:27
So if I open my inventory report here, then we have our activity for the in then tour E and it puts it in here by the individual items on the actual on the invoice instead of the lump sum of the invoice and then I go back on over we can also look at the sub ledger for inventory because this should tie out to the sub ledger tracking buy inventory items since we’re tracking on a perpetual inventory system.
14:53
Let’s take a look at the second tab to do that because there’s nothing in the profit and loss yet. Opening up the hamburger.
14:59
Let’s go down To the reports, which is in the business overview reports. And let’s type out an inventory report, inventory valuation summary, let’s say, and then I’m going to close up the hamburger, scroll up just a bit. And now this should reflect what is currently in the system.
15:20
We’re currently at the 30 996 76. And we got these quantities of our inventory units. 39 7976 is the 39 976 here in the balance sheet. Now, if I went back on over to the first tab, we can also see that if I went into my transaction, detail information,
15:42
for example, and so we did that by going into the bookkeeping area, and we looked at the expense side of things close in the hamburger, if I was to filter this, by all purchase orders, all purchase orders, applying that out, then we’ve got these purchase orders. And then of course, now we can sort it by the ones that have been that have been fulfilled.
16:04
And so I only want the open purchase orders and scrolling down and applying that that reduces it down here. So now we’re going to say we got another one. Let’s say we’re going to make a check for the Gibson USA once I’m going to close,
16:18
I’m going to open the hamburger, I’m going to hit the plus button and we’re going to make another check. We’re going to do this with a check form to pay off the bill that we got from the box of guitars from Gibson.
16:28
So I’m going to type in Gibson, USA, a and TAB TAB. And once again, paraphrasing, QuickBooks is like hey, there’s there’s two purchase orders do you want to do you want to use those to populate the check?
16:42
And we’re like, yeah, thanks, QuickBooks, that’s really helpful. So we populate that in there, we’re going to say, OK, let’s tap through this thing, then. And so let’s say this is on the 15th, we’ll bring it up to the 15th check number is checking out.
16:57
So we’re going to go down and say there is the population here. And we got this first one, once again, that it gives us the reminder of the customer, we could make it billable, I’m going to go ahead and do it, I’m going to make it taxable too.
17:10
But it’s also again, going to pull in the amount of the the price at cost most likely when we make the invoice so we’re going to turn around and sell it but it’s probably going to pull that in at the cost. So we got to be mindful of that, I just want to point that out and show that and we’ll see it more when we make the invoices.
17:29
Let’s save it, close it and check it out. So we can see here that if we’re in our our bookkeeping area that now that we were left with only the one purchase order that’s still open, so it filtered that down again, if we go then to the tab to the right, our balance sheet and drill down on the cash account, we’re gonna see another check that went out for in this case, Gibson USA, there’s the check,
17:54
I can drill down back to the source document, if we wanted to going back up top, going back to our balance sheet, we see the other side should be in the inventory, there it is going into the inventory, he we’ve got a purchase the purchase happened in this case with a check for multiple items, notice these two checks are adding up to the same amount, they put it in their line by line here for these two lines on the on the purchase.
18:24
So I’m going to go back on up top, I’m going to go back and close this out and scroll back up top. Notice just one more thing to notice, I’m going to go in there again, that you’ve got the link,
18:36
it shows you the link up top with the two the two linked transactions, which if you click on are the purchase orders, which of course you can then go into the purchase orders to show you that linked transaction, which is nice, closing that back out, and Scrolling back up top and going back to our report summary.
18:55
And so let’s let’s then go to the inventory report, which I think was in the middle. Refresh that one running it. That’s at the 46 868 now, which should tie out to the balance sheet in the inventory 46 868 And it does. So let’s do it again.
19:17
Going back to the first tab. Let’s do it one more time. Uno vase Moss, we’re going to say this is going to be another purchase order. Actually, no, what am I doing? That’s not a purchase order. Hold on a sec.
19:31
This better be the last one because you’re losing it, man. This is gonna be a check. This is gonna be a check. That’s what we’re doing. I know what I’m doing. What are you talking about? I know what’s going on here.
19:42
This is going to be for Diamond Head, Diamond Head for the ukuleles. And once in paraphrasing, QuickBooks is like I have a purchase order. Do you want to add the stuff from the purchase order and we’re like yeah, we do.
19:55
Notice the link that populates up top so you can kind of check out the purchase order if you want to And then we can tab through this, we’ll keep it at the 15. Here we got the check number is on the six.
20:07
So we can scroll down, we got the ukuleles that pulled in, we’re not tying them out to any particular person, we just like to ask them ukuleles into shop in case someone wants to pick one up, come on in, pick up a ukulele. So we’ll save that one, save it and close it.
20:26
And then obviously, nothing is now in our transactions in the bookkeeping area. If I was to go into the get paid and the paid area and search by vendor, I could for example, go into the Diamond Head ukulele area. And we can see the detail here which we had a purchase order,
20:41
and we had a check that was linked to the purchase order. If we go then to our reports, holding down control scrolling up again, once again, checking account is going to have another check in it. And we’re going to say Diamond Head.
20:55
There it is there’s the 72 Scrolling back up the other side, on the inventory account inventory, checking on that drilling down to the source dock, which is a check. In this case. Let’s check out that check, shall we? There it is. There’s the check there, checked it out. And then we’re going to go back on up.
21:18
And we know that the inventory account two will be tying out to the sub ledge or the sub report you can call the inventory summary the 46 940 46 942 Let’s refresh the inventory valuation. And so they’re 46 940 they’re the UK’s that we have the do you see UK’s at four of them left thus far at this point.
21:41
Okay, let’s go back to the trial balance. So we can see everything in one area and just kind of review where we stand at this point in time. This is where we’re standing firmly on this trial balance ground. This is our left foot the debits in the right foot the credits.
21:57
And so you can check out where we’re at at this point. If you tie out that’s great. If not check the date ranges to see if the date ranges are the thing that’s throwing you off. And we’ll do a transaction detail report at the end of the section which will be another area that you can use to kind of check where you stand and what might be some differences if there are any