QuickBooks Online 2022 rental income customer deposit and get ready because it’s go time with QuickBooks Online 2022. We are in our get Craig guitars practice file we set up with a 30 day free trial holding down control scrolling up just a bit to get to the one to 5% currently in the homepage, otherwise known as the get things done page.
The Business View as compared to the accounting view, if you wanted to change to the accounting view at something you can do by going to the cog up top, switch to the accounting view down below, we will be toggling back and forth between the two views either here or by jumping over to the sample company file currently in the accounting view, going back to the get great guitars opening up a few tabs go into the tab up top to do so right clicking on it’s going to duplicate that tab.
So we can put some reports into these tabs. That’s why we’re doing it tab to the left, right click again, let’s duplicate another tab, tab to the left. Let’s do it one more time. And duplicate another tab, I’m going to jump on over to the sample company file just to know keep to locate where the reports are at in the accounting view, which is right on the left hand side reports right there.
Going back then to the business views second tab, the reports are located here in the business Overview section, and they’re in the reports close on the hamburger. We’re going to open up the balance sheet first big balance sheet, going back up top to range, the change we’re going to go from Oh 101 to two to 1231. Two to run it tab to the right.
And now we’re going to go back to the business overview. Let’s open up another report here and close up the hamburger this time the profit and the loss report. And let’s do a little bit of a difference here. Let’s say we do a comparative profit and loss, I can see that the two months on the same report. So let’s do this from Oh 10122202 20 822. And let’s make the drop down here. Let’s make that go into months.
And then we’re going to go ahead and run that. So now we got the January the February which we’re currently working on and the year to date. On the right hand side. That leaves us the tab to the right where we can open up the trusty trial balance which we can get back into practice of opening up because it’s an excellent report closing the hamburger and typing in trial balance to open it up.
There it is open it up ranging the changing up top Oh 101222 1230 122 and run it last time we went up in our epic novel about get great guitars back to the first tab that we were we were thinking about having rental people come in and rent some band equipment,
and we set up our items to do so we did that by going into the Get Paid area. And we went then into the the products and services, which if you were in the accounting view would be under the sales area, and the products and services and we said we’re gonna imagine whole clothes on the hamburger that
we have to set baseline of a band set which had a couple guitars and amp and a drum set that people could then rent we’re imagining and then they can add to it if they wanted to, with the with the adding of an amplifier and another guitar or something like that. So now we’re going to imagine someone comes in and requests to us to reserve the rental equipment for say the following weekend.
And we’re going to have to end we’re going to collect a deposit on it. So we might then determine what the deposit is and set the date with an estimate to make sure that we’re keeping the equipment reserved for them and then collected a down payment on it. So that’s what we’ll do now.
Okay, so we’re gonna imagine someone calls in I’m gonna I’m gonna select the item up top, we’re imagining someone’s calling in they’re saying I want to I want to reserve some rental equipment and we’re going okay, let’s make an estimate we’re gonna need a down payment from you. Then we need we need a payment not just a payment but a down payment that payments down.
Okay, we’re gonna go then this is going to be customer number five you’ve just given up on on cool names customer number five, customer number five here, and we’re gonna save that. And we’re going to say then, that this happened on let’s say the 27th Let’s bring it bring it 202 20 722 February 27 That is and then we’re going to go on down and say that they what do they want?
What we got the baseline, you’re gonna have to buy the standard band set, and that’s going to be $202,000. And then they’re saying we need an extra guitar in our band set. So we’re like, okay, we can do that we can add another guitar, rental, add a guitar, add one guitar.
And so they, they want two more guitars. Okay, two more guitars at $50 each. That brings us up to 100. And then we’re going to add an amplifier to so we’re going to add an amplifier. These are the items we set up last time. And they weren’t for amplifiers, I don’t know where I came up with that for amplifier stuff, but they want to be super loud surround sound amplifiers. So we’re like, alright, we need a down payment, though, we need a payment with like Bitcoins, so it’s down.
So it’s a super down payment. No, we need to, we need the payment upfront. In other words, so we got the 2002 16. Let’s imagine we calculate the down payment on it, I’m just going to make up the down payment. But we might basically say it was it was like 10% of whatever we think the rental is going to be or whatever, something like that.
So then we’re going to calculate the down payment, I’m going to save and close this. And then this estimate will help us to reserve the timeframe and know what they want when they come in and pick pick the item up.
So we’re going to then say if I went into my for example, get paid and paid area, close up the ham Boogie, and go down, we’ve got we’ve got then I want to go to the customer section though that I’m going to go to the customers area, and then close up the ham boogie. And then we could go down to customer number five.
Number five, there’s the estimate that we have pending for our new customer. So we’re going to say that they we need $200 down in order to reserve it. So I’m going to go Okay, let’s go up top.
And there’s this is where we got a couple different ways that we can record this because we were running into the same issue of the unearned revenue. And this is another area of unearned revenue, it’s similar to the kind of system that you might have for like rental of a building or something like that, if you had rental apartments or something like that, then you might collect a down payment, or you might collect a last month’s rent, for example.
And when that happens, you didn’t actually do the work, but you’ve got money. So you’re gonna have to put it into the bank account. But the other side is going to go then to not income, but some kind of liability account because you actually owe something back at that point in time.
So we could do that a couple different ways, we had two methods that we looked at, in order to do that, I think the easiest method from my bookkeeping standpoint, is actually to create a negative receivable as opposed to a positive liability,
because the negative receivable allows us to then track the the information in the customer area a little bit more clearly. And we can then tie out the invoice to it a little bit more clearly. In other words, these two things integrate naturally within the accounting system.
Whereas if I create another account, then it’s a little outside the system that’s trying to track the information by customer. So in any case, we’re going to have the received payment.
If you want more detail on those two methods, however, you could take a look at our prior presentation on it. And so we’re going to say we’ve got the receive payment.
And this is going to be from customer number five. customer number five, it says hey, we don’t I’m paraphrasing, it says hey, we don’t have an invoice to apply that to. And we’re gonna say that’s okay, because we want you to make a credit out of it. In other words, an advanced payment that you can then apply to the invoice that we will make in the future,
I’m just going to call it a cash payment, it’s going to go into the deposits payments to deposit which is just another name for undeposited funds. If you know undeposited funds from you know working with QuickBooks in the past, that’s what they used to call it just to clear an account that will be holding the cash until we make the deposit. It’s going to make it for $200.
What’s this going to do, it’s going to increase or let’s say decrease the receive payments decreases accounts receivable, but there’s no invoice to apply it to. So for this particular customer, customer,
this should be customer number five, customer number five, make sure it’s customer number five for this particular customer, then you’re going to have a negative receivable the other side then it’s going to go into the clearing account of payments to deposit which used to be called undeposited funds. So let’s save it and close it.
Save it close it. You didn’t select an invoice I know and we’re gonna say okay, let’s go into the balance sheet and see what has happened. And we’re going to let’s let’s run it. So to make sure that we have a fresh we’re working with fresh stuff.
And then we have the Where did it go payment to deposit there’s The 200 Right there, that’s where it went, it went right there, it’s right in front of your face. And then we’ve got the accounts receivable AR going into the A to the AR.
Scrolling down a bit, we’re gonna see that we have then customer number five, the 200, that looks good. It doesn’t of course, flip the accounts receivable balance total into a negative. But when I look at that one individual customer, I’m going to have a negative balance.
So for example, let’s make another report on the right hand side, right click on the tab to the right and duplicate it. This will be the sub ledger, the sub report the customer balance summary for the accounts receivable by going to the reports on the left hand side, closing up the hand bogie and then we’re going to scroll down, we’re going to look for the bit who owes you money stuff who owes you money,
we’re looking for the customer balance detail, customer balance detail. And then let’s let’s change the date customizing it because I’m working in the future 1231 two to 1231 to two I got everything done in the present. And I work in the future now to get stuff done.
So anyways, we’re in number five, customer number five down here, we could see the payment for 200 with a negative amount. So now we’ve got this negative receivable, which for financial statement purposes is not exactly correct, because it should be a positive liability not a negative receivable.
However, when we then add the invoice, it will be tracked and linked quite nicely using the negative receivable. And if we want to report externally, then we can do an adjusting entry which will be adjusting this negative receivable to a positive liability.
That’s not the adjusting entry you might be used to if you worked in accounting problems that are tracking unearned revenue where unearned revenue goes up during the period, you figure out how much has been earned. And then you decrease the unearned revenue record revenue for the amount that has been earned. That’s a typical book problem,
we have a different problem kind of here with regards to linking the payment to the invoice which internally works quite well having this kind of negative receivable component.
So in any case, let’s go back to the first tab and see how it looks in our our customer number five area what why is this doing this go away. thing that didn’t look right, hope I didn’t mess anything up. Here we go. So then we’ve got the estimate down here. And now we’ve got the payment.
And so when they when they when customer number five comes into play here, this whole family customer, the customer family, when customer number five comes in, then we can make the invoice with the estimate, we can apply out the payment to it, and hopefully provide them their equipment which they can rock and roll with. Let’s go ahead and record the deposit now.
So if I go back up top, we’ve got this money, if I looking at the balance sheet, we’ve got this money that was put into the 200 into the payments to deposit the clearing account. Let’s go ahead and just make that deposit into the checking account.
Now go into the tab to the left to do it, we’re going to say the the the hamburger, we’re going to go into the plus button and choose the bank deposit. So we’re imagining that this is the only item that we have thus far that we need to deposit at one time, it’s going to hit the bank statement at $200.
In other words, so we’re just going to be putting that $200 into the bank in our system so that we can reconcile it easily this will be increasing the checking account decrease in the clearing account of what used to be called undeposited funds now funds to be deposited,
or something like that, whatever it’s called, I forgot. Let’s go ahead and save it and close it. And then go back on over and we can see what it’s called. Because it’ll be right here. Let’s run it again. Run it so we’re fresh.
Let’s go into the cash which should now be deposited, deposited cash down here. $200. Looks good. Going back up top. Other sites should be on the the short, no, the what do they call it payment to deposit payments to deposit is back to zero.
And if I go into that one, we can see that $200 Going up with the with the payment form and then back down with the deposit. So that looks good.
Going back to our report. Notice that this whole time there has been no impact on the income statement. So we haven’t been able to look at our super cool, you know, month by month income statement over here. But next time next time that will come into play.
So even though we got money, we didn’t earn the revenue. That’s the point. That’s the point of the unearned revenue type of situation. Let’s go to the trusty trial. Balance and see where we stand thus far. Thus far, this is where we stand. So hold on a second,
we got to change the date range up top, oh 101 to two to 1231. Two to run that. And I also have one adjustment that I think there’s the system, it tried to adjust the sales tax last time I went into it. So I’m going to go into this accounts receivable right here.
And I’m going to scroll down, I’m going to scroll down to this string music, which was in a prior presentation. And I think QuickBooks adjusted the sales tax last time I went in there. So I’m going to go back into that and put it back at our generic 5%. So everything will match out when we do our bank reconciliations and everything.
So I think it adjusted it right here. So I’m going to change the math on this one. And we’re going to go down and say I want you to override and put that generic 5% Because it’s a practice problem, and stop changing that QuickBooks to practice problem. That’s why it’s a practice problem.
Save it. Okay, so we’re at the 530. I’m going to save it and close it. So there we have it. That’s where we stand at this point. With that one, I’m gonna go back to the trial balance. And this is what we have thus far with the trustee t be at this point holding control scrolling up, if your tie into these numbers, great. If not,
it might be a date issue. Take a look at the date ranges. And we’ll be looking at the transaction detail at the end of the section which is great for diagnosing any differences.