Cash Payment for Inventory Linked to Purchase Order P.O 7080 QuickBooks Pro Plus Desktop 2022

QuickBooks Pro Plus desktop 2020 to cash payment for inventory linked to a purchase order or P OE Get ready because we bookkeeping pros are moving up the hilltop with QuickBooks Pro Plus desktop 2022. And we are in our get great guitars practice file going through the setup process with a view drop down the open windows list on the left hand side company drop down home page in the middle of maximizing that home page to the gray area. We’re going to be opening up the reports with reports drop down company and financial balance sheet standard.


Let’s go to the customization up top to the rains changed from 201012 to 1231 to two and then fonts and numbers change in that to the font of 14. Okay, yes, please. And okay, let’s then go to the reports drop down company and financial profit and loss standard range changed from Oh 101 to two to 1231 to two, customize that report up top thoughts and numbers change the font to 14. Okay, yes, please. Okay, looking at the trial balance now go into the reports drop down the accounting and taxes, Trial Balance TB range change from



Oh 101 to two to 1231 to two, customizing that report and changing the font to the 14 once again and okay. Yes, please. And okay, let’s go back to the home page. And last time we entered our purchase orders which we can see if you go into the purchase orders, and we go to the back arrow, that’s one way that you can get there. There’s our purchase orders requesting purchases from our various vendors for various types of guitars, we are now going to imagine that we have received them. But we’re not going to be entering a bill which is probably the normal next step, meaning you would typically if using a purchase order request the inventory upon receiving it, you can imagine it coming into your warehouse,



having the guitars counting the guitar seeing if they tie out to the purchase order and then enter the bill. I imagine that guitars with a bill inside of them that we would enter into the system increasing the accounts payable, increasing then the inventory related to the guitars. But we’re going to try to keep it more on a cash basis system at this point. So we’re going to say that we’re going to pay them right when basically we we get the guitars and then in the second month, we will enter basically the bill into the process. So same kind of concept.



Either way, when we make the payment or enter the bill, after receiving the guitars, we’re going to link that to the purchase order. So let’s take up the other way we could probably be tracking these purchase orders or most likely would be would be go to go into the vendor center and the vendor, vendor drop down and then the vendor center. And we could then look at the particular vendors we’ve been purchasing from for example, and then find the purchase orders remembering that we’re looking at basically the next year because this is in the future for me.



So that’s why I have to put the next year for 2022. So depends on what the date is when you’re watching this. But in any case, we have that or you might go to the Transactions tab here and look at the purchase orders this way to see all all the vendors who have purchase orders and impossibly sorted by the Open purchase orders. And using this then you can then decide you know which purchase orders are applicable. So now we’re going to imagine that we’re receiving the purchase orders. And we’re just going to basically pay them off here.



And as we do so we’re going to be increasing then the inventory, not just the amount on the financial statement, but also the items related to it the units and decreasing then the checking account. Let’s go back to the homepage, we were going to do this this time with a check. And then in the next month, we’ll do it with a bill on the received bill item here. So we’ll enter the check which is a form that’s going to be decreasing the checking account representing the same form representing In other words, any kind of decrease if it was an electronic transfer, you can have a similar fashion.



Note that I’m not going to enter directly into the to the check register this time, because the check is kind of linked to the purchase order. And therefore I want to use that that function by using the actual check form.



So I’m going to enter the check. And we’re going to say that the check let’s happen. Let’s say it’s on the 14th and we’re going to be paid Epiphone so if I type in Epiphone and say tab, it’s going to say look, there’s a purchase order, I’m paraphrasing here, they look that QuickBooks says there’s a purchase order that exists for this vendor Do you want to receive against one or more of these orders? And I’m going to say yes, I would like to, and there’s two purchase orders that are outstanding for Epiphone.



I’m going to see if we can pay both of them off at this point in time checking both of them off and then say okay, and so there is our information for the two purchase orders got all this information here. These last to notice that it’s been checked off as billable. That’s because we’re following through with this customer. This customer, as you recall, we entered into the purchase order, even though the purchase order doesn’t really need it for the sake of the vendor, but that that is tracking through to the customer, it’s being checked off as billable here.



And then that will also track through and allow us to turn around now we’re imagining we receive the inventory to basically invoice the customers with it. So that’s, that’s going to be that feature, what’s going to happen when we record this, it’s a check. So it’s going to be decreasing the checking account by the 37 ad for the full amount here, it’s going to be increasing the inventory item for the same amount in terms of the financial statements. But notice, we’re in the items tab and not the Expenses tab. That’s because we’re talking about the purchase of inventory items.



And it’s also going to be tracking the inventory on a perpetual inventory method. And it’s going to be increasing the units of the inventory backing up and supporting the inventory account. So let’s save it and close it. And check it out. Save it, close it, checking it out, by going to the trial balance, let’s go to the trial balance first. And that’s the easiest place to kind of look at all this stuff. We’re gonna say checking account double clicking on it, we have the checking account decreasing, there it is on the decrease to the checking account double clicking in there, look at the check, let’s check out the check.



There it is the check checks out, we’re going to close that back out, go back then close this one back out the other side going into inventory double clicking on the inventory. There we have it in the inventory items that have been added on the 14th. Notice that it put them in there as each inventory item like each different line item, even though we’re using the same actual check form in order to enter it. So it’s still breaking it out in a little bit more detail. But all these items, if I was to double click on them, would give us the full 37. At closing this back out.



Closing this back out, you can also find that, of course on the balance sheet in the checking account and the inventory, nothing happening to the income statement yet, or the profit and loss. Because we haven’t sold the inventory at this point in time we just purchased it. This is an accrual kind of concept, which you kind of have to use most of the time when tracking inventory. Let’s then open up another report with the reports drop down, going into the inventory report of the inventory valuation summary, change in that date to 1231 to two.



And now we can see that we got all this inventory that we’re ready to sell now. And it adds up to you we’re looking at the cost item, the 39 976, which should be tying out then to the balance sheet on that 39 976. So things look things are looking like they’re supposed to here. If we then go back to the vendor vendor section, we then still have these three open items. Here’s the transactions, here’s the open purchase orders, we got the Gibson with two purchase orders and Diamondhead.



So let’s go ahead and and do the same process with those two gonna go into the homepage, say we’re gonna imagine we got these we got these in our warehouse to Gibson guitars, and we’re going to just pay for it. So we’re going to say then, let’s write the check. Let’s go to the banking and do it this way, right check. And we’re going to say that this is going to be the 14. Let’s make it the 15th. This is going to be the Gibson, USA it said and then I’m going to paraphrase again. QuickBooks says, Hey, there’s an open purchase order for that vendor Do you want us to receive against one or more of these orders?



And we’re going to say yes, we do. Thanks for letting us know that QuickBooks, and then I’ll just check them both off again. Okay. So same process. The second item you’ll recall was billable, meaning it’s checking it off saying we put that item as though we purchased it the purchase order particularly to turn around and sell it to this particular customer, which is music stuff store. So now we have the inventory, we’re going to turn around and sell it now what’s this going to do? It’s going to be increasing then the the inventory, because we’re in the items tab, not the Expenses tab,



that’s going to be driven by the actual items down here which will increase the inventory account the other side, decreasing the checking account, also increasing the units of inventory on the inventory reports. Let’s save it and close it and look it look at it by going to the trial balance. Probably the easiest place to check this stuff out double clicking the inventory. And there we have that one. So there we have it again for the music stuff store closing it out. Then the other side is going into the checking account again, closed lower in the checking account. Looks like it’s doing what we would expect if we go The vendor valuation summary.



Then we have the the the new items that we just purchased, I think was the Gibson items that were at the 46 868. Let’s check that on the balance sheet 46 868, which would also be in the trial balance that we checked right here. 46 868 Nothing’s on the p&l, the profit and loss because we haven’t sold the inventory yet. If we go to the vendor center, now we’ve got one purchase order still outstanding for Diamond Head. Let’s go and do that one. Say we let’s imagine we got the ukuleles too. We got the ukuleles as well. If you want one, we got some.



So we’re gonna say let’s go to the banking and go to write check. And so this one went to let’s keep it the same day. And this is Diamond Head. and QuickBooks is like, Hey, we’ve got purchase orders outstanding. We’re gonna say yeah, thank you. And okay, check it off. So now it’s another item here. So this was not purchased for a particular customer. So it’s going to be decreased in the checking account the other side going to inventory both in terms of the inventory account as well as the item of inventory. Let’s save it and close it. And check it out as well. Trial Balance trustee T V.



Checking account is going down again. So we got that decrease there for the ukuleles. And then the other sides and the inventory. It went up. Here’s the inventory. So now we’ve got the inventory. If we go to the the inventory valuation, now we got all this stuff, like we’re ready to sell stuff, we’re ready to sell guitars here 46 940 On the total, go into the balance sheet, we’ve got the 46 940 ready to go.



How about the profit and loss nothing’s there yet, because we haven’t actually sold anything. This would be the next step. Obviously, when you’re kind of starting up the business, we we got the money we put in our capital, we took out a loan, we bought the store equipment, we bought the furniture, we basically now bought the inventory. Now hope we’re crossing our fingers and hoping that people want to buy guitars, then we go to the vendor center, there’s nothing in the vendor center at this point in time under the purchase orders because we have now imagined that we have received the purchase orders and paid the purchase orders directly back to the homepage.



Next month, we’ll do the similar kind of process and we’ll link it to the to the bill and then have that one extra step in the middle which would be the increase of accounts payable and and having the purchase order at that point and then paying the bill and then pay the bill at the end. Which would which would decrease the accounts payable and record the decrease to cash at that point in time.



We’ll take a look at that process more next month. But that’s the general idea with a purchase order we enter the purchase order no transaction there when we do so it’s a request for inventory which is a little bit different than we’re used to on the personal side of things. We receive it and either pay for it at that point in time or enter a bill at that point in time. That’s when we’re going to record the transaction that’s when we have the inventory and and or have also paid for the inventory.

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