QuickBooks Pro Plus desktop 2022 presentation item lists Get ready because we bookkeeping pros are plus it up the hill top with QuickBooks Pro Plus desktop 2022. Here we are in our free QuickBooks sample file sample Rockcastle construction going through the setup process view drop down open windows list on the left hand side company drop down homepage in the middle maximize in the home page to the gray area reports drop down company and financial taking a look at the balance sheet standard. I’m going to make magically make the font 14 font now at 14 One more time reports drop down company and financial profit and loss magically making the font 14 magic has once again happened we’re going to go back to the home.
On the left hand side we’re looking at the items now which can be found in multiple different areas. One is on the homepage. It’s not part of one of the flows, because it’s not something that you can do nor during the normal process the normal cycles vendor customer employees cycle but rather, it’s on the right hand side under the list under the it’s a list item under the company section items and services. We will find it I will go into it shortly by going to the lists drop down it being another item that you can think of as a primary type of lists using QuickBooks terminology.
Now before we go into it, however, let’s think about what they are used for. They’re going to be the underlying foundational tools that will be used to make some of the data input forms. These data input forms on the homepage which create the financial statements as we enter them. The data input forms creating the financial transactions such as the invoice the sales receipt, and sometimes the bills will be driven and made more easy to do the data input if the items are set up properly. Let’s take a look for example at the invoice first to get an idea of that, I’m going to go back to the prior invoice.
We took a look at invoices in the past as we analyze the transaction on the invoice, we noted that the transaction can be quite complex even though the data input can be quite easy. You can imagine this situation if for example, when you go to the grocery store, you check something out at the grocery store. If the grocery store even just simply the scanner can determine the proper item. And if the item has been set up in order to populate the transaction, the scanner in essence, we can basically automate then the transaction from that point in time to help us record the transaction even though it can be a fairly complex transaction.
However, that can only take place if the items have been set up properly. So as we populate the invoice, we need to be able to recognize what item is being sold, if we’re selling them or for purchasing items when we purchase the inventory. And then we need to make sure the item is set up such that when we populate the item, it will then calculate the proper amount and recorded to the financial statements in the proper way. So the two types of items will typically be thinking about our service items.
Meaning if you for example, your bookkeeper or your lawyer or something like that, you might then charge for your services that you will have, we want to have a service item, the most basic service item might be I’m just going to charge an hourly rate. But remember that charging an hourly rate can be a little bit more complex. And even if you’re charging an hourly rate, you might have different items that you’re going to be setting up for possibly multiple different types of workers, meaning you might have different staff at different staff levels, which you charge different rates for.
And you’re going to have to have basically different items to charge out the different rates that will make the billing process or the invoicing process a lot easier when you go through the invoicing. Even if you’re in a service item, also realize you might want to then see if there’s any way that you can bundle your services together to come up with a standard price so that you can reduce the amount of your billing time and reduce the amount of tracking of the time.
And you might do that, for example, with bookkeeping by saying hey, look, I’m going to charge you by the number of transactions I have, or the number of accounts that are impacted, and actually count those transactions. And then you can basically say if you’re within this range of transactions, I’m going to charge you this fixed amount, having the item then pick up that bundle, setting a set price for that actual activity that is being done.
And then that’ll be a little bit more standardized a little bit more easy to do rather than trying to see if your time was properly input if people spent the proper amount of time on it if you’re charging the right billable rate. If you have inventory, then clearly the item needs to be identifying the inventory on something like the invoice it needs to record the sales price so that we could charge the proper sales clock price billing the client or in this case invoicing billing the client, same idea, and it also needs to track the inventory. If we’re tracking inventory in QuickBooks.
As we saw when we looked at the invoice decreasing the transaction related to the invoice decreasing the invoice Story on a unit by unit level as well so that the subsidiary ledger shows the number and units of inventory and recorded the cost of goods sold those two amounts not actually on the invoice, but driven by the invoice from the item. In a similar way, as you can imagine, the cost of a transaction at the grocery store is basically being recorded, when you scan in essence, the grocery item that is there or the scanner does that for you.
So that’s going to be the general purpose of the items, they’re going to be really important to set up. If you’re going into a company that has already set up the items, then hopefully, the items are set up properly. And you could just go forward from there and be consistent going forward only needing to add new items as they come up and or change items when there’s a need to change them. If you’re starting a new company, then setting up the items properly is a really important component depending on the type of industry that you’re taking a look at. Most industries that are billing, of course,
are going to need that if you’re working at a cash register or something, you’re going to need to think about that somewhat in depth. We’ll think about that when we create the new company file in the second half of the course actually creating items as we go and then populating our invoices closing out the invoice up top. Also note that those items will be used in a similar fashion and the create sales receipt, that being the one that you could think of like at a cash register,
you’re still going to use the items to charge you might use it also with a bill here or when you receive inventory from the purchase order when you purchase the inventory. And in that case, you’re purchasing the inventory instead of selling it that you will then mark up and sell at a later point. Let’s go into the items lists for sample Rockcastle construction, I’m going to do that by going to the lists drop down remembering that items are a major kind of list category, because they’re in the lists drop down for QuickBooks item list.
So here’s going to be our item list. I’m going to close this item on the left hand side. And note now obviously, there’s a specialized industry for Castle Rock with a construction job costing kind of system. So they might have a little bit different format or structure or need, it would be easiest to think about items for service item. And then level up with complexity, possibly inventory items where we purchased markup and then sell. And then possibly manufacturing items or construction items, job cost types of systems can be a little bit different in a specialty in and of themselves.
But in essence, you see we have service items up top, those are going to be items that don’t have to go to the added level of tracking the inventory. So we’re just charging for those. We have the inventory, part items, these items are going to be tracking the inventory, meaning I want to create a sub ledger with these items, and track the inventory with it. And then you have the non inventory parts down below, which are kind of inventory issues. But they were not actually tracking the inventory for those items in QuickBooks possibly because it wouldn’t be worth our time and effort to track it within the QuickBooks system, possibly because it’s something like glue or something like that, where it’s kind of like inventory.
But we’re not tracking it because it would take too much time and effort to do so in that case. So that would be the idea for if we wanted to set up the items, then we’d go to the items drop down down below, we can add in a new item in order to set up a new item. Let’s just take a look at some of them that have been set up for example, this let’s take a look at this framing labor, go into the item and I’m going to say Edit, let’s let’s edit that item in the drop down, that’s really a rise up. And then there we have it. So notice has been set up as a service item, it has just put the name as the framing name is going to be set up here. And then we have the rate.
That’s what’s going to be showing up on the invoice when we charge for it. We don’t need any cost in this case, because we’re not buying it it’s a service item. This is going to show whether it be taxable or non taxable with regards to sales tax. In other words, when we create an invoice or sales receipt, do we have to charge the customer sales tax on it. service items typically do not have sales tax in the United States. So we have to choose the clickable portion they’re not here, then we have the account that’s going to be impacted.
And because we’re in we’re in like a construction kind of system, it might be we have a lot of different income accounts, in other words, but we’re choosing an income account that’s going to be hit when we record this because we’re going to record it with an income type form the invoice or sales receipt. So I’m going to close this out. Then we got the more complex inventory part. Let’s look at the inventory part down below. I’m going to go to the item drop down, rise up and go to edit that one, edit it. This one looks a lot more complex. Let’s just tap through it here we got the name we got we got the sub item manufacturer, part number if applicable.
And then down here, we’ve got the description. These are the descriptions. They’re going to be on the purchasing forms the purchase order that we create when we purchase the inventory, or the bill and then we’ve got the cost This is how much we purchase it for. So this is what we bought what we’re going to buy per unit for. And that account then is going to go to the the cost of goods sold account. And then we’ve got the preferred vendor, meaning when we sell it, the cost of the inventory going down, it’s going to be expensed for the cost, not the sales price to the cost of goods sold. And then we got the preferred vendor that could be applicable,
who we usually buy this from. And then we’ve got the description on the sales transaction, usually the same. But it could be different because you might have something different on your invoices, and your sales receipts as you do on the purchase order and bills when you buy the inventory as opposed to when you mark it up and sell it. Notice there’s no sales price here. That that would be because you’re going to plan on possibly populating the sales price as you sell it. So you might then add the sales price. Basically, as you go, if it was a fixed sales price, then you would add the sales price here, within populate the sales price.
When you record the invoice or sales receipt, you got to determine if it’s going to be taxable or not. Now we’re talking about an inventory item. So if you’re talking sales tax, meaning tax we’re charging to the customer, then inventory items are more likely to be subject to sales tax, and which is a state and local tax generally, and then we’ve got within the United States, and then we’ve got then the income account that’s going to be affected once again and income account that’s going to be affected as we record the transaction. Closing that out.
Then we also have the inventory port, which is a non inventory. So take a look at that real quick, we’re going to go to the edit the item. And here we have the inventory, but it’s a non inventory part. Now at this point, similar kind of layout, we’ve got the item name, manufacturer part if applicable. And then it says here, this item is used in assemblies or is purchased for a specific customer job. So that’s going to make it be treated a little bit differently for the for the job cost system. And we might not be tracking then the inventory within the subsidiary ledger, we got the purchase, which we’re going to have EFA 2000.
The account same kind of idea with the account that’s going to be cost of goods sold a preferred vendor, if applicable, they don’t have a sales price here, which means that if you were going to add a sales price, when you populate it, you’d add the sales price at that point in time, tax is applicable. And once again, we’ve got the materials income, closing that out. And you’ll note here as we go through this, if you look at the just the rows up top, you got the name, you got the description, you got the type that it’s going to be given that we went over the account, and then the quantity and notice that these service items,
the ones that are serviced obviously do not have a quantity, because we’re not we’re not counting the quantity. These items down here that our inventory ports, we do have a quantity, because we’re tracking those within the system. If I was to generate an inventory summary report, these are the kinds of items that we would see the items down here although when we did the looking into the items,
they look similar to the inventory port we don’t have that tracking situation with with the tracking in the quantity of the inventory units within the QuickBooks system. So those are going to be the major items that will that we’re going to be considering. We’ll talk more about items when we set those up in the second half of the course.