QuickBooks Online 2022 products and services lists or item lists Get ready because it’s go time with QuickBooks Online 2022. Online in our browser searching for QuickBooks Online test drive going into the test drive, choosing the United States version of it and verifying that we’re not a robot sample company Craig’s design and landscaping services holding ctrl scroll it up just a bit to get to that one to 5%.
00:29
We’re also going to have the free 30 day trial version open, just so we can take a look at that business view as opposed to the accounting view if you don’t have access to this at this time, that’s okay, we’re going to look at it more in the second half of the course, back to Craig’s design and landscaping. In prior presentations, we’ve been taking a look at the lists, which are up in the cog, remembering that when we look at the day to day transactions after the groundwork has been laid out,
00:54
we will typically be going into the New button or into one of the items on the left hand side, if we’re looking at the foundational items that we’re going to use to set up on which the transactions will be based, then we can go up to the card has many of those kinds of items. However, this one, although it’s a foundational thing, and it’s in the cog up top is also another one where you can most likely and you will most likely go to it within the tab on the left hand side in the sales area.
01:22
Or you could call it the Customer Center. So let’s look at the two ways you can get into it though, it makes sense that it would be up in the cog up top because it is a foundational item. And we’re looking at the products service items, which could be called items. And they could be in the lists here.
01:38
And then in the lists, you have then the products and services. Now again, that idea of the lists is something that’s comes from basically the desktop version, where these things were housed under the drop down of lists. And that’s where you would go and these would be two of the most prominent type of lists. Also note that the name of this products and services in the desktop version were called items, which might ring a bell or sound familiar, if you say like inventory items, it might not sound quite as familiar if you say service items.
02:10
But that’s what you might hear that term. They’re called items, inventory items, service items, or they can call them the products and services. The reason I point that out is because you might hear people calling them that bit from the old system. And because that old system has been around kind of a lot longer.
02:26
So you know QuickBooks Online could change their terminology at the drop of a hat, right. And it could be something different. So you might see it on either thing. But those are basically the same kind of things. These are the foundational types of things that need to be put in place.
02:40
So that when you enter transactions, hitting the plus button, mainly thinking about the sales transactions, the invoices, and the sales receipt, the invoice happening on an accrual basis, the sales receipt on a cash basis that you can draw in those items really easily. And this is your goal, you want to be able to say,
02:59
Hey, I would like someone basically at a cash register to basically pull up a sales receipt, and then ring up whatever it needs to be done. whether those be inventory items or service items, pulling those items in. And then having the system know which accounts to be hit with those items as well as calculate the bill and calculate the sales tax, all with the use of the inventory items. So it makes the data input a lot easier.
03:25
And even if you’re not in a system where you’re at a cash register kind of situation. Anytime you’re billing someone, if you’re building something for your own hourly services or for your service items, then having the item set up properly will make that whole process go easier go faster.
03:41
So let’s go to the tab to the right, I’m going to close this back out, I’m going to right click on the tab up top and duplicate it so that I can basically look at the lists on the left hand side and then have that right hand side to be going into some of the items, I’m then going to go to the lists or the products and services in a way that I think will be more likely the way that you will do it.
04:02
Go into the sales item on the left hand side, you might think about this as the Customer Center or the sales cycle. And then you might go into the products and services all the way to the right. And then you could close the hamburger. So this is the products and services. So if I go down below, you see the products and services that have been set up on down below here.
04:25
These are the items that are populating when I go into an invoice and hit the drop down to look at the information that’s going to be added or populated into an invoice you’ll note they also have these categories that are being full that the items are falling into here, you could set up those categories.
04:42
One way you can get there is go into the car up top, go into the lists here and then you can go into the products and categories. So now you’ve got your your categories that are set up in here and that can give you another level of organization within the the product and service lists. So let’s go into Some of these and just see how they’re going to be set up. If I go into it and edit one of these items, then we can see that this is going to be a service item that we have set up.
05:09
And that’s the first thing that you will pick when you pick a list. So if I close this out, for example, let’s first add a new one, just so we could see some of the options, I won’t actually add it, but just look at the options and tab through it.
05:20
We’ve got inventory items, non inventory items, service items, and then the bundles. inventory items are going to be items where you are having inventory, that means you’re selling something that’s going to be inventory related.
05:33
And typically, you’ll be using the inventory. If you’re tracking the inventory within the system on a perpetual inventory method. If you’re looking at a non inventory part, then it’s like you’re still have a physical thing where you’re talking about something that’s inventory, but you don’t want to track the inventory in the system.
05:51
So you’re not using the same kind of the perpetual inventory tracking system, and therefore you’re not gonna have those subsidiary reports that are trying to track the inventory by unit. And then the service items are going to be those service items that you provide anything that’s not inventory related.
06:08
So if you’re like a law firm, or CPA firm, or later on, we’re gonna say we’re good talk, we sell guitars, but we have guitar lessons or something like that. Those would be the service items they’re usually a little bit easier to deal with. And then the bundles at collections of products and or services that you sell together, for example, a gift basket or fruit basket cheese, and wine, and so on, that you can bundle those items together.
06:30
So those are going to be the general categories. Let’s take a look at some of those categories that have been set up now and kind of deconstruct them. So let’s go into the design, let’s just edit this inventory item here. So we of course have the name it’s going to be design we have the SKU with which is the stop keeping unit, which you may or may not be using, obviously not used.
06:50
In this case, we have the category, if you don’t have any categories, then you won’t have anything here. But if you set up the categories to make some more easily sortable items here, then you can just have the category that would be set up as well. And then we have the description, I sell this product or service to my customers, or if I uncheck that I purchased this product or service from vendors.
07:13
So I’m going to check off the first one, the description is going to be the customer design. That’s what’s going to be on the description when you make the sales items. Meaning when you put this into place for the invoice and the sales receipt, it will then show up at the category of the item that’s being sold, which is going to be the design, which is a service item.
07:34
And then in the description, it’ll show the custom design in the invoice, the sales price, you could keep this as zero if you want to kind of set your own price. But the more that you can actually put the price into your items, the better. And notice here we’re looking at a service item.
07:50
And oftentimes, if you’re working in a service item, you might say, Hey, I’m just going to I’m going to charge people on an hourly basis. For example, if you’re a bookkeeper or law firm, but notice that if you can move away from that, sometimes that makes it a lot easier. So for example, if you’re a bookkeeper, and you’re able to say, hey, look, I’m going to print print out my transaction report, for example.
08:10
And if you have like 100 to 200 transactions that are involved, this is how much I charge for that range. That makes it a lot easier to kind of determine your invoicing and make it something that’s not as ambiguous in terms of how you know how many hours did it take, and was I you know, on my game, when I was doing these hours and whatnot,
08:30
did I have the clock running? Well, which one of my staff was involved in the working on this item and charging out there hours, it can be a little bit more concrete, if possible, to try to charge for some kind of thing that you are doing, if possible. Sometimes it’s not. Sometimes if you’re like doing law firm services or something you don’t know what’s going to happen or what to expect, all you can do is charge the hourly.
08:54
And that’s the way it is. But the easier you have your your billing cycle kind of set up and the more concrete it is, the less time you’re agonizing over the billing cycle, which can be nice. And then the income account it’s going to go to here is the design income. Now again, with the income accounts for this particular company, they have a whole lot of different income accounts because of the type of industry they are in.
09:16
But you might only have a few a few income accounts, you might just have basically, income accounts related to inventory, which would be basically sales type of account and you might have an income account basically related to service items, or different full category of service items. Note that the income accounts that you set up you usually don’t want to get too detailed on the income accounts.
09:37
Where people run into problems is they often make up an income account by customer and that’s too much detailed normally, because you don’t want to separate income account by customer on the income statement generally, because you can get that detail on sub reports that will break it out by customer.
09:56
You want the income statement to be just by your income type the major type categories, they also often break it out by too many too many type categories, meaning everything that we sell every different little inventory item that we’re selling, we put that into a different income account, you don’t typically want to do that, because you’re going to end up again with a really long income statement.
10:18
And hopefully, you can run subsidiary reports that will give you some of that more detail in that sense as well. So be careful on how many income accounts you did, you want to have large grouping of income accounts, and then purchase information not purchase this product or service from a vendor, it’s a service item.
10:34
So we’re typically going to not have that for a service item. And then we’ve got the fountains. Here’s a concrete and the lighting. This is these are inventory items. So you can see the type here is an inventory item, and we’re got the sales price, the cost, and we’re tracking the units on hand, that’s when the inventory items become a little bit more complex. So if I hit the drop down on this one, or not the drop down, let’s edit this one, and see what we have, we have an inventory item, it’s going to be a pump.
11:03
Now, obviously inventory items, if you’re in a job cost system like this one are used, maybe you can think of them a little bit different as you’re tracking them in the job. If you were just purchasing and selling something, purchasing it, marking it up and selling, it might be a little bit more straightforward. But in any case, we now see we have the stock stock keeping unit here, we’ve got the category that’s being listed out, now we have this added field, which is the quantity on hand.
11:30
Now when you first start the company file up, then then we’ll have to deal with this quantity on hand. And then after that point in time, the quantity on hand should be populated in and of itself. And we might have to adjust it periodically for shrinkage or something like that, as it’s being calculated on a perpetual inventory system.
11:50
This means this inventory item means that we have physical units of inventory, that we’re going to try to track on a flow assumption using a perpetual inventory system, which the online version typically defaults to the first in first out method that you’ll be using if you’re using like the standard QuickBooks inventory tracking system.
12:13
So that’s going to be the flow assumption that will generally be using reorder point, when do we want to be reordering that should give you kind of a message when you get low, if you put the reorder point in, and then we’ve got the inventory asset account. So it’s going to go to the inventory asset, this usually happens by default.
12:30
So that means when we purchase the inventory, it’s going to be increasing the asset account, when we sell something using an invoice or sales receipt, then it’s going to be decreasing the asset account, the description is going to be a fountain pump. So when we populate this then into an invoice, it’s going to that’s going to show on the description, the sales price, we’re going to say it’s $15.
12:53
Notice now it’s going to a revenue account called sales of product income. Notice what we did not call it they did not call it a fountain pump sales fountain pump. know they said sales of inventory items generally, right? Because you don’t want to be too specific on every thing that you’re selling generally.
13:11
And then sales tax, as sales tax will typically be applied. The sales tax is another area where these items are going to be important. Because if if sales tax is applicable, then the item is usually driving whether or not the sales tax will be there. And in the United States. The sales tax is not generally a federal tax, but a state and local tax.
13:33
Therefore, to set up the sales tax, we got to turn on the sales tax, we got to tell them the state and local taxes that might be applicable. And then we need to set up our items and say whether the items are going to be a taxable item or not as our primary kind of tool to calculate the sales tax. And then we also have to think about the customer side of things to see if the customer has any exceptions to not be taxable.
13:57
We’ll talk more about that later. But it’s important for the items here to have that in mind. And then the purchase information often also the fountain pump. This is the description that will be shown on the purchasing documents a bill purchase order or check and or check.
14:14
And then the cost. Notice the cost is different from the sales price. We’re going to purchase something, we’re typically going to mark it up and then we’re going to sell it when we have the cost
14:23
The cost is going to drive what what we purchase it for when we buy it a purchase order and the bill or the cheque. And it’s also going to record a deed a cost of goods sold and decrease to inventory. At the point of time we make a sales receipt and an invoice but it won’t actually be on the sales receipt or an invoice.
14:45
These are this is what the system knows that will make the transaction as we record the items on a perpetual inventory system. And it’s kind of like if you if you think about when you’re at a grocery store and they scan the item, you see the sales price that happens but it’s also knows what the cost is.
15:02
And it’s also doing the perpetual inventory system lowering the income, the inventory and recording the cost of goods sold based on the information already in this system by like the items, the product item. And then we have the cost of goods sold, which is the expense account when you entered an invoice or sales receipt.
15:20
And then you could have a preferred vendor down below, that would be the preferred people that we purchase these items from. So if I close this back out, that’s going to be the general the general layout of these items. If I go to my second tab on the right, and we hit our plus button, we’ve been we’ve used all these forms now. So now you can get a little bit more behind the scenes on the invoice.
15:42
For example, when we make the invoice and we choose the drop down and we choose the design item here, there’s the design item, fairly straightforward transaction accounts receivable would be going up by the 75. New sales tax is impacted because the item was not designed to have the sales tax, the other side go into some kind of service revenue. If I went to the pump here, where was the pump? The pump,
16:08
then, now what happened? What happened there? I didn’t spell pump, right? I can spell. Okay, so there it is. So now we’ve got the 15 is showing here. And we see that we have this the the item, it’s not taxable, I thought that was a taxable item. This is not a taxable item, apparently.
16:26
But notice it’s got the tax right there hold on a sec, it’s not calculating the tax, I’m going to close it out, maybe it’s because I’m zoomed in, I’m going to leave and then go back into it. And then see if we can add it I need I need a customer up top customer up top, closing out the carrot. And now let’s type in the pump, pump. And there it is. Okay, so now now it’s got the sales tax calculated.
16:56
So now what’s this going to do this is the more complicated one, because you got the inventory involved, it’s going to increase the accounts receivable by the 1620. The other side is going to be it’s the other side is going to go to revenue for the 15 then you got the sales tax, which it knows that it needs to calculate because the item told it to.
17:13
And because the customer didn’t, there was no override on the customer not being charged sales tax. So charged the sales tax, which is going to increase the accounts payable and inventory is going to go down not by the 15. But by that 10 I believe it was, which it knows because of the item that we set up the inventory item or product and service cost of goods sold is going to be charged for the 10 to driven by that item.
17:37
You can see the sales description is what is being shown here in the description which populated automatically. If I go to the purchasing forms, closing this out. And we go to the purchasing forms, which was the bill and the purchase order. For example, if I go into a purchase order, ordering that inventory from a customer, or a vendor,
17:58
I should say. And then we’d go down here and say we’re going to be ordering for example, that pump the pump right there, it’s going to populate. I spelled it wrong again, it’s the pump. You know what I’m talking about QuickBooks. So there it is.
18:14
So now the description populates automatically. That’s the purchase description. And now it’s populating the $10, which is our purchase price, which again is known by the system. And it would be the same if I was entering this into a bill.
18:28
So that you can see basically if we get those items set up properly, then the data input related to the invoice related to the estimates related to the sales receipts related to the bills for the inventory, and the purchase orders will all be much easier.
18:47
And we can basically do those those types of items or assign those types of items out even to people or even if we’re not thinking about the data input that needed to be set up the lists the items in order to do that. And you can see those fairly complex transactions as we saw with the invoice and the sales rate and so on, are able to be done with pretty minimal data input