Introduction to QuickBooks Desktop (2022 Full Tutorial Upload)

hi folks i'm hector garcia cpa and advanced quickbooks pro advisor and in this video which is almost four hours long i'm releasing day one it's eight sections but it's day one of a multi-part quickbooks desktop training series that i have this actually mimics a full day of training that i used to teach in live environments in my office here in miami and now i have this recorded so you can watch them in my virtual courses this is actually part of the paid course that i'm releasing into youtube so if you want to learn more you can click on the link that's in the description and you can access the intermediate section of this course day two that actually helps you get even certified as a quickbooks desktop certified user and gives you access to the construction accounting mini course for people that have businesses in construction or contracting i also have my super advanced series on manufacturing and inventory which is for companies that are of course manufacturing wholesale e-commerce that need to learn how to track their inventory in quickbooks so those are available i'll put a link in the description to that because i am releasing the an entire piece of a paid program this video might not be in youtube for long so make sure that you bookmark this page and i'm pretty sure that because it's four hours long you go back and watch this over the next couple of days that's okay in the description i'm also going to put the links of the sections if you want to skip straight to the sections if you don't happen to be able to watch the entire video in one sitting youtube is probably gonna run ads on this video because of the length of it so just be patient i'm pretty sure the video will be worth its while the other important thing i want to say about this video is the fact that i mentioned quite a bit something called the quickbooks missing manual 2016. and the reason why that's an old number it sounds like an old number is because 2016 was the last year that intuit quickbooks released a free manual to the public it's actually an 800 page manual available in pdf available for free i will put a link in the description to that as well so if you're going to follow along maybe in two screens and also have the printed manual or the pdf version of the manual you can use that i know you're probably using a newer version than quickbooks 2016. the good news is that in the world of quickbooks desktop 2016 17 18 19 20 21 22 and probably 23 they all look exactly the same and every single piece of this course is a hundred percent relevant today as a matter of fact for the people that purchase the course on my website every time there's a new change i add more videos or more content uh basically talking to those changes so you can be up to date for that but i guarantee you that this video will be really really valuable unto itself so again even though the video was recorded a couple years ago and i referred to the quickbooks desktop missing manual 2016 if you have any version from 2013 even all the way to 2022 and probably 2023 if that'll make that change that's not released by the time i i'm posting this video i guarantee you the video will be 100 relevant and you deliver tons of value from it anyway let's get started so right now i have my quickbooks desktop open this will be on a windows machine i'm working on quickbooks enterprise edition however this training will work with quickbooks pro quickbooks premiere quickbooks accounts and quickbooks enterprise any version of quickbooks that gets installed into a windows machine it would work in here so when you first open quickbooks you're going to see no company open that basically says that quickbooks is open but no database or company file it's open you're going to see multiple company files here if you happen to be managing multiple companies through quickbooks it may also look completely blank if you're opening quickbooks for the first time so we're going to create a new company to create a new company we're going to click here where it says create new company and we'll just go ahead and click on that then it's going to give us a couple of choices out the big blue button says express start and if you press that i will show you that real quick if you press that it's going to ask you a few questions company name industry business type and basically let you move forward however if you're starting quickbooks for the very first time i recommend that you actually use the detail start the reason for that is because the detail start or the advanced setup is going to ask you a set of multiple questions and these questions are going to guide you step by step on how you should set up quickbooks uh to match your particular business your particular industry so let's go ahead and set up a company a name here so we're going to call this miami computer so we're going to go ahead and set up like a computer company and um we'll put a generic address here and the idea behind just putting something here you know this is just kind of a basic training is uh so we can actually see that address when we create invoices we should be able to see an address there so make it look as uh as real as possible now you can skip tax id or skip phone number email website you don't need that but you could go ahead and put it if you setting up a real company then the next question is what industry now this is not extremely important if you get this wrong it's not such a big deal however quickbooks is going to customize your chart of accounts and the type of transactions that you work with based on your industry now we're working with a company called miami computers this is the sample company we're setting up for this training and we're going to find an industry that matches this one the best so for example there's this industry here called information technology that makes sense it's a computer company so we're gonna go ahead and pick that now one important tip is if you can't find your industry here because it is a pretty short list just scroll all the way down and pick one of the generic ones there's a general product based there's a general service based you can pick either one you'll be fine with that for our particular example we're going to go ahead and pick information technology again if you can't find your industry pick one of the general ones the next question is how is your company organized this is kind of a tax question so how does your company file tax returns and you're going to go ahead and pick whether it's a sole proprietorship a partnership llc corporation etc if you don't know this you should ask your accountant if your accountant doesn't know this uh you should change accountants or ask a lawyer or whoever helped you set up the business so i'm gonna go ahead and pick uh s-corporation which is uh tends to be one of the most uh typical ones here for a small company so i'm gonna pick s-corporation and click next then it's asking me for fiscal year so if you're a regular calendar year company where you start january and december and you file your corporate tax returns on march 15 like like all the corporations or most corporations rather you're going to leave january there but if you happen to close your year let's say june 30th um if that's when you actually close your year then you're gonna pick my fiscal year starts july okay that's what you would pick but most companies are going to be january to december so we're going to pick the start month so we'll click january and then click next that'll ask you to create an administrative password it's good for you to have a password in there so i'm gonna go ahead and put a password in there and um you know if you are setting up the company for the first time hopefully you are the admin if not you know we have to figure out who the admin is and then create a separate user for yourself next question is asking you where in the computer would you like to save this now if you are working in a multi-user environment where we have a server multiple computers that sort of thing maybe you want to get your id person involved just because if you save it in the wrong place it may not work properly in a multi-user network server environment and also if you you're not in that environment but this is set up in maybe your own laptop don't put it in the desktop because typically in the desktop you'll be sort of inclined to put it in the trash can or something like that so put it in a folder where it just makes sense to put it i'm going to go ahead and put it in let's say my documents folder and i'll put it under into it i'll create a i'll put it right there and hit save again you should probably get your it person involved if you need to really decide what the right place to put this in when it's finished saving it's going to say all right we're going to go ahead and customize quickbooks to fit your needs and it's going to ask you a whole series of questions about what type of company you have and the type of transactions you'll be working with so i'm going to go ahead and click on next first question is what do you sell products services or both so if you do sell products inventory parts actual things that you're selling and exchanging for money you you want to pick uh products if you do mostly services done by your employees or services of renting equipment or renting your facilities labor that sort of thing we're going to pick services and if you do both just go ahead and pick both and we'll click next then it's asking do you charge sales tax again if you sell products you probably charge sales tax you may want to ask an accountant see if the type of products you're selling are taxable or the clients you're selling to um you need to charge sales tax you may want to ask your accountant i'm going to pick yes there and then hit next then it says do you create estimate so if you want to give somebody a quote a proposal basically like a pre-invoice very organized with a total then you want to pick yes there for estimate so we'll hit next then it says do you track customer orders now for our sort of our first couple of videos we're not going to be doing sales orders so i'm going to go ahead and click no however if you are working with quickbooks premier accountant or enterprise and you have inventory and you take orders for things you don't have in stock yet and you want to take that order and then sort of remind you and have a mechanism to go order the product through your vendor that's what a sales order will be and then in that case you would hit yes but for the first couple of videos i'm going to have here the first couple of lessons we're going to do we're not going to do sales orders so i'm going to pick no i'll hit next then it says do you use billing statements basically you want to give a client a statement monthly quarterly that shows all the payments all the invoices it's like an invoice of invoices okay it doesn't contain details of the products and services you're selling it contains all your invoices and all your payments so if you want that you would hit yes and then hit next do you use progress invoicing now i'm going to hit no because on this example company called miami computers we're not going to do a project-based billing or milestone-based billing however if you are in the construction industry if you sell projects that are sort of long term if your contract says you know the whole thing's a hundred thousand and if you meet condition a b and c you can build your first 25 percent and then if you hit meet condition c d and f then you can build another 30 percent that sort of building is called progress invoicing so if you need that you would hit yes there but for the exercises we're going to do we're going to hit no and then we'll hit next then it says do you manage the bills you owe in other words do you want to track accounts payable do you want uh to put vendor bills that you want to pay later set them in quickbooks now recognize the expense now pay them later track how much money you owe in the future that would be a bill so i'm gonna hit yes because um i like that feature very much we'll hit next then it says do you track inventory again if you purchase product you stock it you put it in the warehouse you maintain it you make sure that it doesn't break you make sure you don't lose it you count it uh you adjust inventory if the counts are missing um then you do track inventory if everything you buy you resell but you're never stuck in your warehouse it's all basically um order on demand if if if it's sort of small materials that you don't account for you do charge the client for them more or less but not item by item just sort of in a lump sum then possibly you don't track inventory for our example this company called miami computers we are going to use inventory so we're going to hit next then i'll click i mean we'll hit yes and then we'll click next then it says do you track time so that's only if um i'm gonna have time sheets and those timesheets are gonna be used to understand how much our employees time is worth uh in each project or maybe i want to generate a paycheck with it or maybe i just want to bill my client the hours that i spent on the project so if you get if any of those apply you're going to hit yes for our couple of examples on this first uh videos we're not gonna track time uh we're gonna have a whole video on payroll and we'll include all the time elements in there so for this example we're gonna hit no and then i'll hit next then it says do you have employees again we'll have an entire video series on payroll uh but for for this company called miami computers we're going to go ahead and just have a subcontractor so we're going to hit yes on 1089 subcontractors but we're not going to hit yes on w2 employees and then we'll hit next then it says okay we're going to set up your chart of accounts but before we get there i need to know what your start date is and we'll talk about that in a second and then after we settle the whole concept of start date then it's going to suggest a couple of income and expense accounts so i'm going to go ahead and hit next and the question essentially is do you want to start your accounting at the beginning of this fiscal year like for example let's say you're in the middle of july and you're setting up your quickbooks file and you're trying to decide whether or not you should go all the way to the beginning of the year that way when you close out the year you sort of have a clean year so you can file a tax return and that's very very common but you don't have to if you want to just start your accounting today august 1st 2016 and forget about january through july and not really worry too much about the history of the mid-year then you can just pick whatever date you want keep in mind whatever your start date is you're probably going to have to bring all the beginning balances right as of that the beginning bank balances beginning credit card balances loans and we'll talk about that when we talk about the chart of accounts so i'm going to go ahead and pick beginning of the fiscal year because that's the most common especially for companies that already been open before we started our quickbooks file all right we're going to go ahead and click next then it's going to suggest accounts based on the categories that based on the options and questions that it asked and these are the categories so we're going to see all the different options here i can turn them on by hitting the checkbox i'm going to go ahead and turn on subcontractor expense i'll turn on business and license and permits business license to premise i'm going to leave charity contributions out let's say i'm never going to deal with that let's say equipment rental we turn that one on and then we'll scroll down and then we see that insurance expense it's already suggesting a couple of other insurances and you see a little gap or a little sort of tab there under that that means these are sub-accounts so this is suggesting a major category called insurance expense but then it's additionally suggesting other sub categories or subaccounts so i'm going to pick general liability and health insurance as the two sub accounts and you're going to see kind of how those look in the chart of accounts briefly on the next lesson i'm going to keep scrolling down and let me turn on janitorial expense and miscellaneous expense i'll leave that one out i hate that account i find that when somebody has that miscellaneous expense account there that becomes basically the go to account for everything so i typically suggest my clients to leave that one out i'll turn on postage and delivery that one's good scroll down repairs and maintenance that's pretty good we'll turn that one on uh property taxes let's say they don't have any buildings so we'll leave that out of the options there and you see a bunch of options there ask my accountant really good leave that one on that way um if you're an accountant and you're setting this up for a client then the client knows to put everything they don't know there and if you're if you're an end user and hopefully you have an accountant the things you don't know put them there that way once a month and once a quarter however often you meet with your accountant you can review the transactions that went in that category okay so once we're done reviewing these we can hit next and then it says congratulations you can click on go to setup and the first screen you're going to see is this quickbooks setup screen now this screen only shows up when you first turn quickbooks on and and create a new file so because i'm never going to get this screen back i'm just going to hit close and we'll create customers products and bank accounts but we'll do them in their own screens where they're supposed to be going so i'll click on the little x there or click start working now the first thing you'll see is the home screen okay you're gonna see the home screen there with a whole bunch of icons we'll get to that in a second and these icons have arrows or going all over the place and and what what really is happening here is quickbooks is trying to with each icon represent a transaction and each transaction is sort of an accounting event and it's kind of walking you through the typical accounting events that you have and we'll discuss those later on now the other piece of big information you see other than the icons there is this big blue bar in the left now this bar can be collapsed by clicking on that little arrow and then you don't get that anymore however what's in here are shortcuts shortcuts view balances i mean there's a couple of interesting things here if you don't like this left navigation bar that you can collapse and open you can just click on the view menu and you can just turn it off by clicking on the navigation bar or you can click on top navigation bar and see that same bar in the top but it's uh it's going to be static so you can't close it and open it now a lot of people like to have these icons there just because they're pretty good shortcuts however everything you see on these icons can be also accessed through the menu so if you don't want any of them at all just click on hide icon bar and then you won't see a top bar or a left icon bar i like having at least one either a top bar or left icon bar but if you are gonna have the left icon bar just have it collapsed and in the shortcuts just in case i want to click my shortcuts and have access to the shortcuts there now the other obvious sort of thing here is this little tab here called insights when you click on insights it's going to show you sort of a graphical interface which is sort of a dashboard of my sales my expenses and they're good to have although this there's a whole reports menu and a whole dashboard menu there it's right there as a tab on the home page so just know that it's right there and once we have more transactions um those are going to be pretty obvious there the other thing is if you'd be using quickbooks um on older versions typically you're used to having the top icon bar like this and then having this thing called the open window list so i'm going to kind of show you what that is some people actually prefer that so basically if you have multiple windows open let's say i have a bill open and i also have let me just go ahead and click on a purchase order let's say i also have a purchase order open and also have an estimate open and then also have an invoice open so what ends up happening is you have all these windows and they're kind of a mess because they're sort of behind each other on top of each other see that that will make it very difficult to navigate so this open window list here on the left when it makes it really easy because you can just quickly go to the window you want so you can click enter bill and then under this view you can just click on the maximize button and just have it maximized and then you don't have to worry about making it smaller or bigger just because you're going to have the open window list here so that's a really important uh navigation piece right before we get started with quickbooks it's important to know that that's there now if you like the left um icon bar i'm going to click here left icon bar and you click on this little tiny icon here where is it this one open windows it's going to be a little bit similar then that left navigation part if i expand it you're going to see it here it's a lot bigger and for some people it's better because it's easier to read but i think it takes a lot more real estate but what's nice is that um even while it's collapsed and you see that big label that has open windows i can click that and briefly open it and switch see that i can quickly switch across um different windows so i like that very much now it's really important to know that the escape key in quickbooks will close a window so i don't have to go all the way to this little x here close although that's a way to close so i'm going to click on the x that closes the window be careful not to hit the big x or the x all the way in the top that will close quickbooks all together anyway so i'm going to keep pressing escape and i just keep closing the windows and showing the window that's right behind it however if you just want to close every single window all in one shot just click on window close all and that will get rid of it and just get you into a completely gray and blank screen which i like a lot i like that very much i'm gonna go ahead and expand that navigation bar again so these are sort of the the most basic uh navigation tips of quickbooks it's important to kind of get accustomed to that before actually starting to create transactions a couple other things keyboard shortcuts so if you click on any of these menus here so i click on the edit menu for example you're going to see a button there called use register so by seeing use register there you see control r next to it or for example find control f next to it so it's giving you sort of a hint of that you can use a keyboard shortcut if i go to the list menu for example you see the chart of accounts has a control a shortcut but the item list does not so there isn't a control i or something that can get you to the item list however that i mentioned ctrl i ctrl i actually gets you into an invoice now don't despair if there's a if there's a transaction there that you would love to have a keyboard shortcut to that you don't actually see the control letter next you actually can access almost every not every but almost every function in quickbooks using the alt key so for example if i wanted to get to the item list which has no keyboard shortcut with the control menu i can actually follow if you see under l the l is highlighted or it's underlined and then you see the eyes is underlined basically that says that if i hit the alt key and then i hit l first that's going to open the list menu and then if i hit i it's going to open the item list okay so that's kind of an interesting shortcut to know alt l i will open the item list just like for example if i wanted to open my vendor center which doesn't have a control letter shortcut customer center does control j gets me to the customer center but the vendor center does not have one but if i hit o and then v so alt o v opens up the vendor center so another really kind of interesting shortcut to know hit escape close all windows all right that's the first lesson setting up a new quickbooks file and basic navigation this lesson is going to be all about setting up the chart of accounts if you are using the quickbooks 2016 uh the missing manual as a reference the best chapter to use as a reference for this lesson will be chapter three uh setting up your chart of accounts anyway let's go on to quickbooks here so first thing um what is the chart of accounts chart of accounts is the heart of your accounting system this is where you're going to have all your categories or your financial categories that every single transaction is going to be organized into so to access my chart of accounts i want to go to the list menu and then click on chart of accounts or i can just hit control a on the keyboard that's the keyword shortcut ctrl a just another common place where we access the chart of accounts it's in the home page so if you happen to have the home page open um here under the company section you're going to see an icon for chart of accounts so there's a couple of ways to access it now i'm going to go ahead and maximize the chart of accounts that way i'm sort of it will be the only thing that i'm seeing here and a couple of things to observe so the chart of accounts has two major type of account categories one are the balance sheet accounts these are the ones that appear in the financial statement called the balance sheet and the other one are the profit and loss accounts or the income statement accounts which are the accounts that show up in the financial report called the profit and loss now the way you know um what which ones are which is all the balance sheets are organized first and the minute that the last account that's ha that has a running balance so you see that zero there with the running balance so the last account that has a running balance will actually be the last balance sheet account and then you're gonna see the first one right under it that does not have a running balance even if it's zero that would be the first of the profit and loss account so right right here when you see the equity account type end and the income account type beginning that's where you should see sort of a virtual separation to know you know the top points are balance sheet and the bottom ones are profit and loss anyway let's go ahead and um start creating some accounts from here so one of the most commonly used accounts in the chart of accounts um more specifically the balance sheet accounts it's going to be your bank account so to create a new bank account we're going to right click and click on new or you can also click on the account button here at the bottom and click new or you can hit ctrl n so you got basically three ways to create a new account i'm and i like right clicking i think it's the easiest one to remember so you can right click and click a new and it really doesn't matter where you're right clicking so i can right click on the number here or right click down here it's all going to be the same effect we'll click new so on the new account screen you're going to see income and expense as the first two categories there and these are having to do with the profit and loss these are the categories the types of accounts that i mentioned earlier income and expense are profit and loss categories you can also see other profit and loss categories here under cost of goods sold other income other expense here tucked in under other account types now these here are balance sheet accounts so we have fixed assets bank loan credit card and then in here under other account types you can see accounts receivable or their asset or their current asset other asset accounts payable other current liability and long-term liability these are all part of the balance sheet as well along with that equity so later on down the road we'll discuss um the accounting effects and and what all these things mean but let's go ahead and get started with creating a new bank account so i'm going to go ahead and click on bank and then hit continue and then the first thing we'll ask you is for the account name and a lot of people put the company name there that's actually not the best use of that account name in here we want to use something that lets you identify the bank account easily especially if you're working with multiple bank accounts so let's say for example i have one bank account in chase and one bank account in wells fargo if that was the case i can call one chase call wells fargo in quickbooks and that would make tons of sense but let's say for example i have three accounts in wells fargo and you know two are checking one is savings maybe i want to be more explicit the way i i call this account so i'm going to call this one wells fargo maybe i put the word checking and then the last four digits of the account okay that could be a good use for that um and then when i do the second checking account same thing wells fargo checking last four digits some people have one account just for writing checks one just for running payroll and they want to call it the operating account or the payroll account you're welcome to do that as well anyway so because we're setting up our quickbooks file in 2016 starting january 1st 2016 it is likely that we have an opening balance in that bank account starting the beginning of the year which is pretty much a balance that came from last year and because i'm setting up quickbooks for the first time and there was in fact activity or there was accounting before we started this fiscal year i have to put every single uh balance sheet account that i create i have to put opening balance so i'm gonna go ahead and click open in balance i'm gonna grab the actual bank statement so i'm going to grab the actual bank statement that i have from wells fargo dated 12 31 2015 which is the day before the start date of this company file and i'm actually going to read the ending balance from that statement and i'm gonna type it in here so let's say for example ending balance is ten thousand five hundred and sixty dollars with sixty cents so i basically just wrote that in there and i was coming from the physical bank statement on the closing date of the previous year before we started quickbooks and i'll type here 12 31 uh 2015 okay so make sure i put there 12 31 2015 perfect and then i'll go ahead and hit ok now you're going to see a little preview of the opening balance and the date there so i can at this point hit save and close and you may get a warning saying hey you're creating a transaction that's more than 90 days in the past are you okay with that i'm gonna go ahead and hit yes because i know what i'm doing or i'm doing this intentionally so i hit yes and then you're gonna get this pop-up saying hey set up bank feeds you know connect your bank with your um with quickbooks so everything downloads and everything's faster and better blah blah blah honestly i love bank feeds i love that feature but unless you really know how to manage quickbooks in a manual way you shouldn't be connecting the bank so i recommend that at the very beginning when you're first getting started you're going to hit no there okay perfect so you're going to see the bank account show up there you're going to see that opening balance that we created and you're immediately going to see another account that gets created called opening balance equity basically quickbooks is going to create an equity account to counterbalance that new asset that we're putting in there because you can't just have assets come out of nowhere they have to come from somewhere and unless you're setting up quickbooks file with an accountant or with somebody that understands this well enough to grab the balance sheet from last year or the tax return and plug all those numbers you really don't know where these balancing amounts go now generally those amounts are actually part of your retained earnings but i don't want to get too much into the accounting effect of that so you could probably leave it in opening balance equity no problem and then allow your accountant to fix it at the end of the year or whatever so let's do the other checking account so i right click new and then i'm gonna go bank account and hit continue and then we'll call this one wells fargo payroll account and we'll put the last four digits of the account there and also don't don't forget you also may have to do an opening balance there so i'm gonna grab a statement from last year and let's say the opening balance was four thousand six hundred and ninety point seven again i'm getting that from the bank statement i should in theory be getting that from the bank statement um from the previous year so i'll hit okay and then i'll hit save and close and then you'll notice how now i got my two assets and you have the balances start going up and you see that same opening balance equity account keeps increasing because you're entering this beginning balances let's do the savings account as well so we said we had three accounts so we'll put here wells fargo savings and let's say the opening balance for that one was 20 000 flat i guess we just started with 20 000 and never really moved money around there so 20 000 flat 12 31 2015 hit okay and then uh save and close perfect so now we keep seeing that balance go up up up and up and then our opening balance equity keeps going up now let's enter a um an account that's uh liability in nature or something that we owe so the perfect one to get started is uh our credit card so let me go to account new and then i'll create a credit card now and the same thing i'm going to get my my credit card statement from 12 31 2015 or the closest date because credit cards don't really close uh cleanly like the way banks do so you're going to get the closest thing to 1231 2015 and then we're gonna put here amex and the last five digits typically with american express we do five not four but you can do four it's fine and with the opening balance enter opening balance and then let's say the opening balance for this one was 47 690.30 and then the statement ending date that's going to be the physical statement that i have that's closest to the last day of the year before we started quickbooks and let's say that one happens to be 12 25 2015 perfect and then i go ahead and hit ok and then i'll hit save and close and then this will say uh yes and then no to connect online banking now notice that yeah we did have some assets here we had some balances in our bank accounts that was creating a positive equity however now we entered a credit card which is money that we owe it's a liability and that's making our equity negative that's actually on purpose that's intentional that's the way quickbooks kind of manages um you know your assets and your liabilities and calculates your the value of your business so let's enter a couple of more assets let's go ahead and enter a truck uh so let me go to a new account and then i'll do a fixed asset and then we'll call this one gmc astrovan right whatever the name of the van is and i'll put the year of the van 2013. okay uh that's how we're going to identify it so um where it says enter opening balance what you want to put here is the original cost of the asset the original purchase price of the asset we'll forget about depreciation for a minute uh let's choose the original cost of the asset so let's say this asset this ban was uh 36 thousand 900 and ass off at this point you could put the original purchase date or just put 12 31 2015. it really doesn't matter which one you put um however for some people they prefer to just put be consistent and just put 12 31 2015 and then we'll go ahead and hit okay and then uh save and close okay now i could enter the depreciation if i knew it if i had the balance sheet in front of me so if i wanted to enter that depreciation i can create a new account and i click on fixed asset and then hit continue again by the way at this point if you have no clue what depreciation is and it's starting to get confusing because you really don't understand the concept of depreciation don't put it wait to work with your accountant on this but if you do know and understand the concepts go ahead and create it so we're going to create this one we're going to do this one called accumulated depreciation and let's say we actually had that number from our previous balance sheet and let's say that accumulated depreciation and i'm going to start with a negative number because depreciation decreases the value of the asset so let's say is 26 000 so we'll do 26 000 and then 12 31 2050 and then we'll hit okay and then save and close and let's just put change it a little bit there there we go now you're going to notice that we have our asset of 36 900 and our accumulated depreciation of negative 26 000 the actual current book value of that asset is gonna be uh the value of the asset minus the depreciation so we're gonna notice that in our balance sheet a little bit later on as we enter that now let's say that we also have a loan on that ban so um we didn't buy it cash or maybe we put a down payment whatever so let's create the loan so we'll go to new and then we'll create this as a loan and then we'll hit continue and then we'll call this one gm financial right we're going to get the actual statement from gm financial we're going to read the payoff balance or the principal balance as a 12 31 2015 and we're going to enter that in there so we're going to go ahead and click on enter opening balance and let's say we still owed uh 96 000 uh let's say 96 hundred and 9650 on the truck as of 12 31 2015 so we'll enter that liability that's something that was still over the bank so i hit okay and then hit save and close and hit yes so you notice you know all these uh numbers start appearing here and we have this running balances appearing if i actually go to reports company financial balance sheet standard i will spend a lot more time on reports in another lesson but this will start giving you a preview pretty much of what's going on all right we see our our total cash on hand is 35 000 or money in the bank and then we have the net uh value of that vehicle is 10 900 which is the original purchase price minus the depreciation we see our our liabilities we have our american express for 47 000 our gm financial and then we see the running balance of our business which happens to be uh negative at this point so that kind of gives you an idea of what are the first steps that you have to do in the chart of accounts to create all your beginning balances let's go ahead and skip the balance sheet account so let's go to the profit and loss account so i'm going to scroll down here and take a look at our income category so let's say for example we got consulting income sales or hardware sales software sales of support and maintenance and shipping and delivery income and at this point you may go and say huh there is a one another major income category that's missing uh our business also provides training so let me make sure that i have an income category for training because i want to track that too so we're gonna right click and click new and then we'll create a new income account here i'll hit continue and then we'll call this one training services perfect and then see notice that there's no open imbalance option here because this is an income account this is a profit and loss account as i mentioned earlier those accounts do not carry opening balances only the balance sheet accounts carry opening balances so there's no opening balance to put so i'll put save and close and then i'm going to have my fifth income category there so i got my six income category so now i got my income categories let's say i go through my cost to goods sold categories and and those are all good let's say for example this one called subcontracted services let's say the only thing we subcontract is other trainers just give you an example so we're going to right click on that and hit edit and then we'll change that to subcontracted trainers maybe it makes a lot of sense to just have very specific wording in our accounts like that so let's say for example that we do pay some outside trainers to do some of the training that we offer to our clients so we're gonna have that account there okay so let's scroll down a little bit more and we'll take a look at insurance and notice that we have general liability health insurance right um so there's my insurance category let's say for example we also take out a life insurance for all the executives so let me go ahead and click on account new and then we'll make this an expense category and we'll hit continue and then we'll put here live insurance for key persons okay that's actually a typical name that we give when the company pays life insurance for the ceo for example so we'll make that a sell account we have to make sure that we actually click on the little checkbox and make that a sub-account of insurance expense that way this becomes a sub-account of insurance expense just like the other sub-accounts are there so when i hit save and close there will be my three sub accounts there now another category that typically gets sub-accounts it's automobile expense for some reason people love to break out automobile expense so let's do a couple of examples here i'm going to go ahead and click new and then i'll click on expense and then we'll hit continue and then i'll do a sub account called fuel so basically every time i go to the gas station i'm going to use that one and i'll make that a sub account of automobile expense perfect and then because i'm going to be creating a whole bunch of accounts here i won't do save and close i'll just do save a new just make it faster for me save my new and i'll do the next one let's say i'm doing parking and tools yeah and i should definitely make that at least the first letter capital make that sub account of automobile expense and you start noticing how you got fuel under there too now don't make it a sub account of fuel obviously just make it a sub-account of automobile expense and then we'll hit new let's say we also lease our vehicle so we'll put here the lease payment of company vehicle you don't have to make this um accounts really long that's only if you really if you want to uh put your company car okay let's say this is different than the the van the van was financed but it's also a company car that we're leasing so we'll go ahead and put that one and then we'll do save a new let's also let's uh let's do repairs and maintenance for the car so let's just call it auto maintenance perfect maintenance okay and we'll make that sub-account of automobile expense as well and then we'll do uh save a new one let's do the last one let's do um auto insurance okay okay that way we can track all of our auto expenses under um this category called automobile expense instead of putting the auto insurance under insurance expense which you could do you can do either or but let's say i want to do that so i'm gonna go ahead and hit save and close and there it is so i got automobile expense has multiple sub-accounts and insurance expense has multiple sub-accounts another one that gets for some reason a lot of sub-accounts is travel people like to break out um lodging travel meals that sort of thing so let's do that as an exercise as well so we'll do uh lodging which basically means hotels okay so with the lodging subaccount of travel okay and then we'll also do uh airfare right so that's when um pay for plane tickets maybe pay for uh extra baggage or whatever that's all gonna be here as a sub account of travel and let's also do uh transportation um so transportation could be taxi uber train subway even rental car that can go there so if you actually wanted to sort of remind yourself what this is for just put it on the description you can put there taxi subway train same thing right let's do rental car uber whatever okay buzz it could be many ones so um if you wanted to put in the description just sort of like a little cheat sheet for you to use you can do that no problem um and then let's see save a new and let's do uh miscellaneous travel i always like to create um sort of a miscellaneous category under on their parent categories that way we are not tempted to use that actual parent category so miscellaneous travel oh yeah i forgot really important one travel meals so let's do here uh travel meals or meals while traveling whatever you want um that's really important because there is an account called meals and entertainment but that's more for local meals where you go entertain a client take them out to eat that sort of thing but if you're traveling while eating is it um sorry eating while traveling it's really important that you track that separately just because it has a different tax effect all right so i'm gonna do save and close so that's pretty much creating new accounts in a nutshell the other really important thing is when you first set up quickbooks it gave you a whole bunch of options and sometimes you want to go back and look at those options so that's sort of sort of there kind of hidden so if i right click and click on new and then i'll click on expense and then i'll hit continue you're going to see a little button here that says select from examples if i click on that here's gonna be all the categories that we didn't put a check mark on previously like we left miscellaneous out or we left printing out so you can actually just double click on those and hit save and close and it'll create those categories that we didn't select the last time all right so that's creating accounts uh renaming accounts and creating subaccounts let's talk about hiding accounts so let's say for example that for whatever reason this one here called postage and delivery i'm not going to use anymore and i want to hide it so all i have to do is right click and click on make account and active that will hide it it won't erase the history um it will hide it and i don't have to deal with it anymore now let's say i want to delete an account let's say janitorial expense it's pretty much redundant to maybe repair some maintenance because i put all the office maintenance stuff there so i can just right click on that and hit delete account and i'll hit ok and it let me do it because the transactions i mean the account had no transaction so that was okay but if i try to delete for example my credit card account which has a balance in there so i'm going to go to amex right click and delete uh quickbooks won't let you it says listen that account has at least one category i mean one transaction because it has one transaction uh i cannot delete it period so you have two choices you can either hit cancel right because it's just not going to work or you can make it inactive hide it now that hides the account and i'll make some people freak out because it has a balance so that won't go away for reports even even though that's hidden it will still show up on the report but if i ever wanted to um show that account again that i hid or temporary made inactive i can hit this little checkbox here that says including active check on that and then you're going to see the account show up and you're going to see a little x next to it which basically says or tells you that it's inactive so all i have to do is right click on it and make active or click on the x itself and i'll make it active so it's showing again let me go ahead and make that active enact i mean hide that uh inactive again now let's also assume that i have accounts that are redundant so for example let's just pick one here under computer and internet expenses let's say that i have a transaction there that really or have a whole bunch of transactions that really pretty much is the same thing as office supplies okay so let me show you an example that would just make sense let me open up the checking account here and i'm going to enter two transactions that i paid let's say two different vendors that was essentially the same thing but i ended up using two redundant accounts for that so let's say for example i went to office depot i'll make it that all caps make it easier and we'll discuss data entry on the register later on i'm just kind of showing you um what are the potential reasons why you will need to merge accounts so let's say i went to office depot spent fifty uh five dollars in office supplies and let's say i bought paper give me an example and then i'll hit uh record so there it is i got five dollars in office depot office supplies and then let's say a couple of days before i went to office max right same thing and i basically bought let's say a cable for the computer that was uh 19 and for whatever reason i had this account called computer and internet expenses which makes me think that it's different somehow than office supplies and on the memo i'll put here cable so what ends up happening is when i look at my financial statement i'm going to go ahead and click on reports company financial profit and loss standard and show you when i look at my financial statement and definitely i'm going to have a lot more numbers there but i end up happening uh having essentially what's what should be the same category but because i was careless and setting up the chart of accounts or i wasn't maybe thinking about the future i ended up creating two redundant accounts two accounts that are essentially the same but they should be merged so merging would be getting rid of these two as two separate entities so the way you would do that is in your chart of accounts we're going to look for the one that we don't want anymore so let's say we don't want computer and internet expenses so i'll right click on that and click on edit and then i'll change the name of that account to match the one that i want to merge into so i just type here office supplies and doesn't matter um uppercase lowercase matter of fact what matters is that this is spelled exactly and verbatim so as long as that's spelled exactly and verbatim and i hit save and close quickbooks will say hey wait a second you're naming this account account a name that already exists do you want to merge them so if i hit yes it will merge them together as if no separate accounts ever existed or if i had no basically i abort abort the mission but let's say i want that so i'm gonna hit save and close and then hit yes and that effectively will merge the two accounts you hear like a little picture sound and if you go back into that profit and loss you will notice that it no longer will show us two separate accounts it shows just as one account and you will lose the history of the two transactions being separate but you know the way reports work in quickbooks i can double click and obviously still see the two separate transactions although at some point they used to go in different accounts now they've been merged into uh the one account called office supplies so that in a nutshell is a chart of accounts creating accounts deleting renaming merging making an active and entering opening balances on this lesson we're going to be talking about items creating items manipulating items working with items if you are using the quickbooks missing manual book as a reference guide whether you have a physical book or a pdf kind of like what i have here on the screen what i recommend is you jump to chapter five so chapter five will be all about working with items all right so now that i'm in quickbooks before i jump to my item list it is important to recognize that there is a tight connection between the item list and the chart of accounts so i'm going to click on the list menu and click on chart of accounts real quick just to kind of clarify what are the type of accounts that i have here so notice i have a whole bunch of income accounts whole bunch of cost to goods sold accounts and those are going to be really important when setting up items especially particularly inventory items so to open up the item list we're going to click on the list menu item list you can also get to the item list if you happen to be on the on the homepage like this by clicking on the items and services icon that is inside of this company area here so if i click on items and services that will take me to my item list which is pretty much blank right now another really important thing on the shortcut to get to the item list it's going to be alt l i so if i just hit alt l i that will take me straight into the item list all right so while i have the items up here um right now you're gonna see a big blank screen so we're going to create a couple of items to create new items we can right click just click with the right mouse button and we can click on new that's one way we can approach it the other way is we can click on the little item button down here in the bottom click on item and then go to new so that's a basically a second way of creating a new item or we can just embrace the shortcut so i can hit ctrl n okay all three of those are gonna render the same exact result which is open up the new item window now this item window may may look like this if it's maximized or if the screen is not maximized it may look like this like sort of a detachable window either one it will give you the same amount of options whether it's a big screen like this or a small window like that anyway here my item list i have a couple of choices once i click on the type i'm given the service option inventory part inventory assembly non-inventory part other charge subtotal group discount and payment so let's go through all these in summary here now inventory part and inventory assembly that is only going to be available only going to be available if the inventory option is turned on so let me just hit cancel here for a second and show you where you would check that so you click on the edit menu click on preferences and then here where it says items and inventory we're going to go ahead and click on that and then we'll click on company preferences and then you have a little checkbox here that says purchase orders and inventory and you can turn that on by clicking the checkbox on if yours is not active you're going to see everything grayed out under it and you will not see a checkbox so if you are not seeing inventory or purchase orders as an option it's because a little checkbox is not on anyway let's go back into the new item screen here so we have a couple choices here we have a service inventory part inventory assembly non-inventor assembly etc etc let's start with service service is going to be the principal service you provide or you charge for consulting fees labor installation all those things inventory part is going to be for an item that you purchase stock in the warehouse track as inventory and eventually sell inventory assembly would be if i have raw materials as inventory parts and then i want to bundle them together into a single final product called inventory assembly and track my raw materials by themselves and my assembled products by themselves then i would use inventory assembly sort of in combination with inventory part non-inventory part would be an item that you want to track with a specific name specific description but you do not necessarily need to track the individual quantities on hand so if i want to buy and or sell specific products or materials that are going to have their own name and their own description but i don't necessarily need to track how many i have in stock or how many do i have pending to stock that sort of thing then i would pick a non-inventory part now other charge that's that's going to be sort of a quasi service so other charge and service kind of have a similar purpose but um other charge is really meant for you to put the type of services that do not uh really encompass the main source of income that you have so if you have sort of miscellaneous charges accidental charges like a delivery fee a setup fee a late fee those sort of things you will put under other charge and then in reports later on you can discriminate whether or not you want to see services or the charges or both now subtotal is kind of an interesting one subtotal gives you the ability to create multiple items that their purpose is to calculate the total amount of every single item on directly on top of it so that's the purpose of subtotal and subtotals are typically mostly used for applying a discount okay so we'll discuss that later on now the group is similar to an assembly where it is a whole bunch of inventory parts put together the difference is the group is sort of put together on the spot it's not really um it doesn't really go through a manufacturing process or an assembly process so a group would be more of a bundle like you know i want to sell four tires all in one shot so i would create a group with four tires in it that that's kind of what a group would be so i that's for me selling things in group that don't necessarily inventory or stock as an assembled product now this count is exactly what it means it would be an item that would that would be a negative so it will subtract from the total of the invoice or you can even calculate a percentage from the line immediately on top of it or a subtotal and payment would be a customer payment that would be built into the into the the invoice right we could discuss that later on let's focus on the most important ones which are going to be service uh inventory part and other charge we'll talk about those three so let me start with service so i'm going to create a couple of service items here that are representative of the services that we charge so our company let's say it's a computer company that does both installation and repair and sale selling of hardware and software one of the main services we offer is hourly it support so i'm going to go ahead and create an item here called hourly it support okay under description i'll go ahead and be maybe a little bit more descriptive like level one support of i.t no servers or security and maybe because i want to have a level 2 type of service with a different rate for example so that's just a generic description that is subject to change on every single invoice or estimate so don't um don't feel worried that whatever you put there is set in stone that's just sort of a default description all right so let's say the rate for this is uh 75 dollars we'll start there with 75 and then most people would love to avoid this part which is choosing the account if you actually just hit okay quickbooks won't let you it says warning you gotta specify an account otherwise the item is not functional that's why i said earlier that you have to kind of understand and appreciate your chart of accounts first before you can even think about working with items and they'll become much more obvious later on why we have the two as we start using them on transactions anyway this is going to be hourly it supports so hopefully i have an account here that matches that so i got consulting income sales support and maintenance sales of hardware so i just got to basically pick that item which income account it goes to if i want to group them and create different income accounts so i'm going to select sales service and maintenance or sales support and maintenance and by the way it's important to point out that i have many clients in which in the chart of accounts they just have one income account called sales or one income account called income or one income account called revenue it's all the same thing so this dynamic of having multiple income accounts is really just mostly useful for just creating much in-depth uh reports anyway so that item is set up and then i'll hit okay that will take me back into my item list which i'm going to make a little bit bigger just make it easier to read and then i can sit there and resize these columns if i want to see things differently if i wanted to change the order of any of these i would have to right click and go to customize columns and then i would basically change the order let's say i want to put price as maybe the immediate attribute next to the name and then hit ok and then you're going to see price right there so you can actually manipulate the way this screen looks so if i wanted to create another item let's say i'm going to do a level 2 hourly support i can just right click new or control n and then start typing away from scratch or if it is a if the item is extremely similar to the previous one i created i can just right click on the current item so right click right click with your mouse and then click on duplicate item same thing would be if i click on the item that i want to duplicate and then click on item and then click duplicate item right there's no control key for the shortcut for that so you're actually going to have to right click or find the function right there under that little item menu so i'm going to go ahead and duplicate the item which is basically going to bring every single attribute the same which will help a lot the only thing that you will notice is that the letters dup you know like dupe duplicate gets added right in front of the item name so i can just delete that and then i have to make sure that this item name is different than the other one at least by one character otherwise quickbooks won't let me have two items with a similar name so we'll call this one l2 that we will know is a different item and then on this one on the description i can put level two support of it and then i can put here including servers or security work okay so clearly separating two different items that we have at different prices so we'll make this one let's say 125. oops put that back here so put this one 125 and then we'll hit ok perfect now i got my two service items so let's jump into uh creating a non-inventory part for a minute so i'm going to right click and go to new and then i'll make now a non-inventory part and let's say for example that i buy and sell cables um let's say network cables but i don't really um track them as inventory i do buy and sell them just to kind of put them in a purchase order so my vendor knows exactly what i want so we'll call this one a cat 6 10 foot cable something like that right and then here in the description i'll just put here network cable and then let's say that we typically sell these for 10 bucks a pop put ten dollars a pop there and then on the account i'll put it on their sales of hardware i guess i could put it under support and maintenance because again it's not really hardware sales but i'll put it there just as if i want to track it now if i also buy those cables not just sell them but i also buy those cables i can click on this little checkbox which basically says there are purchase for a specific customer or job and then under cost let's say i typically pay three dollars a pop for these so i'll put three there and they're under expense account i'll put it under let's see if i have sales of hardware as my income account then technically my expense account should be let's look at my cost of goods sold purchases or hardware there we go so i guess my chart of accounts has sales and chart and custom goods all accounts that kind of match i'll go ahead and copy this description over so it's not their um description less all right so i'll hit okay and there's my non-inventory part and we'll kind of show you the dynamic of that as we start doing purchases let me add one more item here let me do a new and then i'll do an other charge and then we're going to call this one delivery okay on the description i'll just type their delivery the amount i'll leave it blank because delivery is pretty much going to be different every single time so under account i'm going to put here an income account called shipping and deliver income so this is basically us charging delivery to the client to take stuff to the client and again if i'm going to use the same item to book my delivery cost to bring the products inside you know bring it in once i order them i also have to click on this little check box that doesn't make a lot of sense there we just do it anyway and then under expense account we have to fi we have to find an account that matches so um because this is the expense side this is when i pay for delivery then this one makes the most sense cost to goods sold freight and shipping cost there we go so now like that item is actually a double-sided item so i can use it for purchases or sales if i choose not to hit that checkbox then i only wanted to use this item for selling for invoices but if i also want to use it for purchasing i have to make sure that i turn that piece on right there so i'm gonna go ahead and hit okay so there we go we got two double-sided items the um the non-inventory part and the delivery all right let's start setting up now some inventory parts so let's say for example that we sell laptops and servers so let's go ahead and create those so i'm going to right click new and then this type this time around i'm going to hit uh inventory part you will notice immediately that there's no like little weird checkbox asking me to expand or collapse the items to be double or single sided automatically because they're inventory part you are forced to have an expense site and a sales side all right so let's say for example under item name we're going to call this one dell laptop s100 let's say that's the item name that we're going to give it so our customers see that on the invoice on the manufacturer's part number that would be from my dell catalog exactly what the part number is called so let's say this is called lps 100 hyphen rt x right i'm just obviously i'm making this up but you would pull this exactly from your vendor vendors catalog list okay then under purchase description i guess you could if you want to you could copy and paste that part number there again if you wanted to have it there and then maybe we can get into some of the technical specifications of what the laptop's going to have so i can put here you know 15 inch w auto x ga or whatever that means by some technical specs and then we'll have i5 dual core etc etc right this is like the technical specifications of the laptop that i'm buying and i'm letting know my vendor exactly what i'm looking for under cost this is what i'm going to pay for the item so let's say i pay 480 dollars and then under cost to control account is good to make sure that if you have multiple custom goods sold accounts to pick the right one a generic account called cost of goods sold just like a generic income account called sales it's fine technically but you know let's tie this all together so i'm going to do purchases of hardware for resale all right perfect preferred vendor would be who i buy this from so if i had a vendor list which i don't have now i should have a vendor there called dell dell corp or something like that so now i can pick my preferred vendor that way i know exactly who i buy these from now let's move on to the right side on their sales description you know maybe i don't need to give my client all this you know maybe by giving my client all this in an estimate will cost them to google it and circumvent us from the sale all together so if that's going to be the case i will put here the description that i want my client to see so maybe i would just put here fast laptop something simple like that and then under sales price let's say we sell these for 5.99 and then under income account i'll click this little check uh drop down box and then we'll make this sales of hardware there we go so now my income account is uh it's it's an income category my cost of goods sold account is a cost to goods sold category that's what c o g s means cost of goods sold i got my preferred vendor i have my cost what i'm gonna pay my vendor i have my sales price down here i can put if i want to have a minimum of these let's say for example that the minimum amount of laptops i want to have stock is five and if i do run into less than five how many maximum i want to have when i purchase some more let's say i want to have a maximum of 10. and this this stuff becomes really useful later on when we discuss inventory management this on hand and total value i really recommend to avoid it because you're gonna create all sorts of havoc in your accounting um so avoid these these two unless you really know what you're doing so for the time being just avoid it the last note i'll give you is this little section here called markup and margin this little preview of the percentages it's only available in quickbooks enterprise otherwise if you're working with quickbooks pro quickbooks premiere quickbooks accounting edition you're just not going to see those little previews there right no no big deal however if you know for a fact that you want to mark mark up your product let's say 25 and you don't have this tool here you could actually just reverse engineer these so i'm gonna go ahead and delete the sales price and under sales price let's say i am told that i must mark up all of my product 25 so what i do is i take that 480 and i multiply it times 1.25 one because i want to get the 480 and the 0.25 because that's the mark so if i just come in here and type 4 8 0 and then times which is shift eight and i get a little calculator there and put 1.25 again 25 markup and hit tab quickbooks will actually calculate exactly what my sales price should be and because i'm working with quickbooks enterprise it tells me what the markup is now if you happen to be working with quickbooks enterprise you can actually just click on this little button here called edit markup and you can actually set it up here so if i wanted to mark this up 37 i'll just type it in there and hit tab and quickbooks will actually calculate the sales price for me so it's actually kind of a really neat tool but again only available that little piece only available in enterprise everything else is available in pro premiere and account and edition so i'll hit okay leave it i'll leave the sales price at that and then i'll hit ok let me go ahead and duplicate this item and i'll go ahead and create another item here called the server so just duplicate this real quick that way when we're creating estimates or invoices we're going to have all this um large catalog here so let's say that's server s 200 and then we'll go and get our you know part numbers and all that stuff from from our catalog list and here we'll put fast server and then let's say the cost for this product is 21.50 okay and then let's say the sales price for this is 2500 okay on the reorder point and max i'll leave them at zero because i really don't need to have servers in stock those are mostly custom orders so just leave that as an example there let me go ahead and delete this and i'll put maybe something else here all together perfect just have a little bit different description and then i'll hit okay and then there's my my two inventory parts there's my non-inventory part my other charge my two services i'm gonna do one more inventory part i'm just gonna do this one from scratch and i'm gonna do some software because we sell both hardware and software so i'm gonna have inventory part and i'll put here microsoft office let's say that we sell microsoft office and then let's say we pay 250 dollars for it and we sell it for let's say 325 simple okay um custom result account will choose purchases software see that's a new cost to solve account we haven't used yet income account we'll pick here sales software prefer vendor i guess that's who we buy the software from so we'll create here microsoft real quick and when you're doing this in the real world make sure you're you know you're capturing addresses and all that stuff right um that way you're you know you're not sort of taking the same shortcuts i'm doing here and i'll put here office 2016 for five users let's say that's that's what we buy and i'll go and copy and paste that in the description and then let's say they don't have part numbers because microsoft doesn't happen to have part numbers and then we'll hit ok and that would be in a nutshell how we set up all of our items now i want to show you something real quick i'm going to go into lists and chart of accounts and then i'm going to go ahead and put these two windows next to each other that way we can kind of appreciate the difference between the two so the accounts here on the left side these are the financial categories that we classify every single transaction into and these go into reports and here on the right side we have our part numbers or our products and services or our items and these on the right side these are items and items are best described as the products and services that we buy and or sell that are used in transactions on this section we'll talk about creating customers and vendors let's start by creating a customer the best place to create a customer or my database of customers is in the customer center the customer center can be accessed many ways one we can click on the customers menu and we can click on customer center so that's one way of doing it if i happen to have the home page open i can also click on the customer's title on top of the customers transactions and i can get there or i can use the keyboard shortcut ctrl j ctrl j not ctrl c because ctrl c is copy so the next best thing was j jsjobs in quickbooks there's a concept of customers and jobs which we're going to get to in a second so let me go ahead and go into my customer center so now in the customer center this would be the place where you would see the entire database of customers that would be here on the left side and each detailed information about each customer would be on the top right and on the bottom right would be all the transactions related to that customer so we'll discuss uh the transactions in a different session so to create a customer there's a couple of things we can do one is we can right click on the keyboard so right click and then we can click on new customer so that's one way of doing it and that will pop up the new customer screen let me go ahead and close that the other way of doing it is to click on the new customer and job drop down menu in the top and click on new customer here's a job which we'll talk about briefly but here's a new customer so that's another way of doing it we can click there or we can hit the keyboard shortcut which is control n n for new new customers so i'm going to hit control n and then that will pop up uh the new customer screen now let me go ahead and unmaximize this uh that way we see the screen uh the window kind of by itself so let's break down all the components of this window so up here at the top you see customer name the customer name at the top is the name of the customer as we want to call it internally in quickbooks down here where it says company name or first name or last name would be the official name in which we want to show on documents we give to the customer like an estimate or an invoice so it is possible that for example i may have a customer let's do for example a customer that's a hospital and the actual name of the hospital is south florida health center llc and that could happen you can have an official name like that but internally i don't want to call it that i want to call it miami hospital see how how that works so if i want to call it in my database miami hospital but i want the invoices to print out south florida health center llc which happens to be the legal name then that's the contrast between using customer name at the top and company name in the bottom other area of confusion is full name so you're gonna put full name there if your customer is an individual if it's a company then we're still gonna use uh the company name so don't put a contact person uh there only put there if that's the actual uh customer it's an actual individual now down here at the bottom you got eight boxes in which you can kind of change the titles and we can put a phone number an email address facebook page twitter twitter page website address we got all sorts of things we can put there the one thing i always recommend that you put is the main email because that's what the default email to send the invoices to so we'll put here ap at miamihospital.com whatever that email happens to be now down here at the bottom where it says invoice bill to if i click on the little pencil that's the edit button um a little window will pop up the edit address information window and then here at the top where it says address you should always include the company name there i'm going to press enter and then under the company name put the address otherwise if you don't put the company name there um the invoices will show up just with the address so i'm going to put here an address [Music] and if i want to use multiple lines like for room number or floor number or whatever that's totally valid now for city i recommend that you actually put the city on the city box don't put it up here on the address box so we'll put here miami florida three three one two three country and region totally optional note totally optional i'm gonna go ahead and hit okay and that's going to be my permanent invoice built to address so that's where we send our invoices to now here on the right there's a ship to address that's if we ship product to that customer and it happens to be a different address or maybe multiple addresses in which we potentially ship product to the customer too or that could also serve as service location so if i don't sell any inventory or any product but i do have one customer in which i do services in different locations that is great for that as well so the first thing i'd like to do is i'm going to click copy and that's basically going to duplicate my build to address into a ship to address so i have to give it a name so i'm going to call it main location you can call it headquarters main location whatever and then you hit okay and basically the exact same invoice built to address is now one of your ship to addresses when i click on my drop down menu under ship too there's only one option there so now i can add an additional or a secondary ship to address simply by clicking on add new or clicking on the little plus sign icon that's there so i'm gonna go ahead and click on that and then i'm gonna create a second location so let's call it north location and then it will have some other address there again as i mentioned before you also want to have the legal name in there again because um the illegal name of the company or the name of the company whether it's the legal name or or the fictitious name needs to be part of the auditor so let's say this is a different address all together [Music] and i'll put that information there and then we'll put here a different city a different zip code whatever it happens to be and then we hit ok and now basically you've got two ship two locations if i click the drop down i can pick whichever i want and then after i pick the one that i want i click on this little checkbox here that says default shipping address and then basically what happens is when i create an invoice for a customer it will automatically show that as the default shipping location assuming shipped to locations is turned on on the invoices and there will be a different session in which we'll talk specifically talk about customizing the invoices and picking and choose what data you'd like to see there let's go to the next tab here where it says payment settings so let's break this one down account number would be only if you happen to have an internal database of customers and numbers associated with it most commonly this happens when you transfer from like an old accounting system into quickbooks and you want to keep that account number as a reference but afterwards most quickbooks users that don't ever use an account number never really see a need for it payment terms would be the default terms that show up when i create an invoice for that specific client so if i select here net 30 for example if i select that when i invoice my client automatically that would be the terms that will be shown on the invoice and yes you can change it on the fly a preferred delivery method if i pick none every time i create an invoice quickbooks will not prompt me to print it or to email it however if i do want quickbooks to kind of queue up my invoices for that customer into a print batch printing then i'm going to select mail because i would have to print it put in an envelope and mail it of course or if i wanted to queue it up into a batch email or maybe ask me hey would you like to email this invoice to the client then i would pick email so that's a really important component of that now preferred payment method that would be if my customer pays me with a credit card or check or a mastercard whatever um by default and then i want that to show up as default when i receive a payment to the customer not that important but again anything that will speed up the process would be great credit limit would be if you want quickbooks to warn you that this customer has outstanding invoices over let's say ten thousand dollars in total and then i'm going to create an additional invoice that would cross that credit limit quickbooks will not warn you warning you shouldn't do this now you can't really restrict it unless you create a user permission on quickbooks enterprise if you're using quickbooks enterprise you could create a user permission to kind of uh not not allow the user to override past due amounts but but in general this is just for the purposes of really warning you or letting you know that you could potentially be invoicing more while the customer owes you over a specific credit limit now price level we're not going to get too deep into it as price level is kind of an advanced feature but price level in a nutshell allows you to create different price tables or discount tables for specific products in which you can assign the default price table or discount table to that particular customer so every time we invoice them a specific price table gets applied to the individual items being used now down here under credit card information that will be for us to save our credit card information if we happen to have received a credit card authorization form where the client says yeah sure whenever you invoice me just charge me automatically now here on the right where it says online payments that would be to enable the option for quickbooks to send uh the person receiving the invoice a link in which they can click and pay online where they can put their credit card number bank account number and uh into it through a service called quickbooks payments will process that for you get you paid all basically electronically now that doesn't just work automatically you have to apply for the service you get approve add the business bank account go through the whole process but otherwise if you get that that's great great way for clients to pay you electronically now sales tax settings that's got a couple of interesting pieces so assuming that you charge sales tax then sales tax code would be the specific uh um code on whether or not your customer is taxable or non-taxable like for example if you have a tax-exempt customer you would put a tax code exempt or something like that and the tax item would be like the individual city or county however sales tax works in the region that you're in um that way by default it's going to charge them 10 8 6 whatever your county happens to have and then resell number that would be for you to store maybe the resale tax certificate number tax id from your customer that way you have a place where you record that information now additional info this really interesting additional info customer type would be for you to group customers by any logical fashion you want to group them by state by city by county by route number by who refer them to you by whether or not they're commercial or resale or wholesale international web-based in person whatever you can create any logical um grouping here on their customer type and it comes really handy when it comes to building reports later on in the future because you can report on open invoices from this group or sales from this customer type so that becomes really handy later on mostly for reporting now rep really interesting if you track sales by a salesperson um and you want that salesperson to be the default rep on that customer that would be where you put it um if you want to then create commission reports or something like that then you want to make sure that all the invoices have the rep in it and by putting it in default you reduce the chances of potentially the rep forgetting to put their name there and that really is only useful if there's a default rep for a customer uh which happens to be only really useful if um if that's the case right now here under define fields this is where we can create custom fields so if i want to track for example my customer's date of birth their spouse's name maybe some internal numbers or codes that are relevant to the commercial transaction i can create custom fields that i can fill in in transactions individually or store them here in the customer information for them to be the default one that gets used in transactions or it gets saved in the customer database and the last tab here is job info really useful if you have jobs on top of customers and we'll get to jobs in a second for you to track additional information about the job job type job status start date end date because it's a report in which you can pool the status of all your jobs or filter them based on a specific type basically great for just having a quick overview of all your customers and all the active jobs that are out there so let me go ahead and hit ok and then my customer will be created so you see them right there on the left side of the screen miami hospital so there's my customer and that's basically how you create customers now let's create a job so a job would be like a sub account of a customer like a sub category of a customer okay so let's jump right into jobs so to create a job there's a couple of ways you can do it one is you can right click on the customer list on the left side and then you can click on add job that would be one way easiest way of doing it there's no control anything you can hit control anything so there's no shortcut per se to do it so you're going to have to right click or you can click up here under new customer and job tab click here where it says um add job now you do see there is technically a way of doing a keyboard shortcut which would be clicking on or hitting alt n and then a so technically if i hit alt and a on the keyboard you can create a job that way too so you can go through the alt n a keyboard shortcut and you can right click new or click on the drop down menu in the top now when you go create a customer this screen looks identical to the new customer screen there really is no difference in here um there's there is one little tiny piece that it's a little bit different here on the right side you get a customer drop down uh which eventually basically says this is a job not a customer so a subcategory of a customer so here under jump name we're going to call it we're going to give it a name for the specific project so let's say we're we're gonna number them as well so i'm gonna put zero zero one and then we'll call it maternity expansion okay and basically uh that's what we're calling it that's maybe what the hospital is calling it we are doing some work on the maternity wing of the hospital and that's basically the name we're gonna give it so i'll create another job as well i'll click drop down and then go to add new and then we'll do the second and then we'll call it north location remodel right whatever job happens to be now notice that when i added the job i didn't pay much attention whether that job belonged to miami hospital or it may not it belonged to maternity expansion there's obviously a mistake there i made that one a sub account or a job off the job so if i wanted to fix that i could just right click on it click on edit so again uh right click edit that will take me into the screen that just popped up here and then here on the right side where it says customer miami hospital i just hit the drop down and say no this is not a job of a job this is a job of the customer now there's nothing wrong with you uh doing it as a matter of fact you can create multiple layers of jobs if you wanted to go in that level of depth so the first question i get is why even bother with jobs actually that just seems confusing additional work and the important thing about jobs is it is possible you have one customer that you do a lot of work for and at the end of the day it is just that one customer but maybe just maybe they pay you for each job separately and when they request a statement or information financial information about what is owed and what has been done with each individual separate job it just makes sense to keep it separate also for reporting purposes you not only report on a customer you can also report on individual jobs within the customer at the end of the day you can collapse the information and just see the customer as a whole including all the subcategories or this jobs collapse but it does add some additional interesting information now really important little trick about jobs when you see customers and jobs or the subcategories you can actually move your cursor right on top of the diamond so you see if i move it right on top of the diamond that basically allows me to move it or take it out of the job so what i can do is i can click and drag to the left and i was really difficult to see but i click and drag to the left and let go and then the job all of a sudden becomes a customer now it doesn't mean i wanted to do that on purpose just make sure you understand that actually when you right click on it and click on edit you will notice up here it says edit customer so he no longer thinks is a job so at the same token i can do the same thing i can click on the diamond drag it to the right and make it a job by simply just moving it one layer so if i drag it one one notch it becomes a job of miami hospital if i bring it down here and then drag it one more notch to the right then it becomes a job of the job zero zero one so it's a quick uh important trick about moving customers and jobs around the other shortcut i'll show you is let's say for example i happen to be creating an invoice and i forgot to create the job and now i have to go back to my customer center to create the job not necessarily i can actually start by typing the customer's name and this actually works on any screen in which you working with customer names so i can just select the customer by itself then i can click right at the end of the last letter add a column right i can add a column and then type another job name so i can add a column and put 003 and we can call it south wing whatever let me just zoom in so you can see right that column right there very obvious we added that color i typed that color in there and anytime you already have a customer created you type a colon and then you type something next to it you're telling quickbooks that you're creating a subcategory you're creating a job so here i can just click quick add and it will create the job on the fly without me having to go in the customer center and doing it and see how it was added to my database on the fly really really important piece of information to know about adding jobs okay so let's talk about adding vendors now vendors are a little bit easier um specifically because uh you're you're likely to have a lot more vendors and customers as you know we have all sorts of people we buy stuff from office supplies gas you have like 20 different gas stations 100 different restaurants and we tend to create a vendor for each one so the vendor list it's a little bit easier just because we work with it a lot more and it's also a little bit easier but because for the most part we don't store address phone number unless unless we actually do purchase orders or we have a deep relationship with a vendor a lot of these vendors like apple store best buy dell hp shell whatever we end up just buying stuff at the stores and we don't store phone number address all that stuff you can and you should if you're doing purchase orders or if you're buying inventory but a lot of times these vendors we create them on the fly now the other thing that makes it quite easy is with vendors you can't have subcategories of vendors no no sub vendors no jobs for vendors so it's easy so i'm gonna create a new vendor by clicking the drop down and clicking new vendor or right click new vendor or control n any of those work and this is pretty much the best i mean i mean the same sort of process we just type the vendor's name up there we choose whether or not we want to add all these details we got payment terms if we have bills for them credit limit the same way with customers the only different thing here is that you can have um in your internal database you can have a customer name and then when you print the check it comes out different and this this is common because we deal with some vendors that say hey just write the check to so and so or whatever so that becomes handy to put a diff something different there now under tax settings this is where you can put your vendor's tax id or the ein if it happens to be a vendor in which you want to issue 1099s at the end of the year and quickbooks has a module for producing the 1099s it is an actual um fee that you have to pay to to submit them online and e-file them because the irs more and more they're doing away with paper filing so as long as you put their social security number or ein tax id and then you mark it eligible for 1099 then the workflow for creating the tenant lines pretty much comes in automatically now under account settings this is really interesting this is where i can select a default category and basically no matter what i do over time what category i use for exxon in the future automobile expense will always default uh forcing the user to kind of think about using something else because that's the one that will pop up automatically so that's up to you you don't have to do uh the default accounts but that does or could really speed up data entry process in the long term and then we got additional info where we can store a vendor type similar to customer type we can group our vendors in any logical way shape or form that we that we see fit whether it's going to be service provider or inventory suppliers or regulators or you know local service people national service people web services whatever you can create generic categories in which you group your vendors and that becomes useful for reports and then custom fields the same way again if i want to store a specific piece of information of that vendor in which none of these five tabs give me access to that's another way of doing it now one little tiny thing i want you to pay close attention to is this thing here that says open balance a lot of people get confused at that and they end up putting a number there just remember if you're gonna create a vendor don't put an open balance because normally you're going to create a transaction right so that's only handy if you're going to import an accounting database in which you're bringing vendors with opening balances and you're not going to create those open bills individually you can use that but normally i kind of ask you to stay away from it just because it becomes a little bit confusing and if you are going to bring in a database of old customers old vendors i'll probably work with a kind of a quickbooks expert with that just because it could become a little confusing but otherwise you absolutely absolutely can do it and that's a place where you can put it so i'm gonna go ahead and hit ok and i'll hit no on the tax id question and that's it so that's how you create customers or vendors now another common question that i have is hey how do i rename something that i a vendor that i created in which i named it incorrectly well simple you just right click on it click on edit and then change the name right whatever uh anything you want to add to the name now another question is how do i get rid of vendors my vendor list is huge well i can just right click on them and click on delete vendor and quickbooks will say are you sure and you're going to say yep i'm pretty sure about it however there are some vendors in which i've done transactions with before and if i have at least one transaction with but with that one vendor if i try to delete let me show you quickbooks will say well you know i understand what you're trying to do however because of accounting i can't just delete the vendor because it's been used in a transaction i'm not going to delete transaction so that in that case is you can just click on make an active and that will just hide it from the database and if you ever wanted to see it again you would click up here where it says active vendors or if i happen to be in customers same thing active customers click on all vendors and then once you see your inactive ones like this fpl that has the x on it then i can just click on that x and i make it active again so um it's kind of a an interesting thing about creating customers creating vendors deleting them making them inactive as you see fit and that in a nutshell is how you create vendors and customer on this section we're going to be talking about customer transactions estimates invoices customer payments so right here on the home page on the quickbooks homepage which by the way if you happen not to have the home page open all you have to do is go into the company menu and click home page now i really like using the home page as a way to illustrate all the workflows related to customers so you're gonna see right here on the customer header that's the title of this box here this entire box is the one that contains customer related transactions now the other place where you can see all of your customer related transactions it's going to be in the customer menu and in the customer menu you're also going to see all the options or all the transactions that are related to a customer now let's talk about a workflow specifically most sales start with uh the first point which is estimates most people before they buy anything they want to know how much is going to cost so the estimate is a way for the quickbooks user to create a formal written history of that price quote for either a product or service that was given to that individual customer now not every customer requires a written estimate of the price that they quoted either way if you want to keep track of the prices that you have given out there i strongly recommend that we get started at least with an estimate okay so after the estimate is created we're going to wait until the customer responds and agrees to buy or maybe disagrees to buy whatever the situation may be and then we go to the next step in the workflow which is creating an invoice okay so once we deliver the product or complete the service now we're gonna go ahead and invoice the client now the purpose of invoicing the client is to let them know that we did work or we gave some product and now they owe me money but when we create estimates in quickbooks immediately we recognize the sale the completeness of the sale but we know we don't recognize the money coming in or the payment yet that happens to be a second uh transaction or third transaction in this case it will be a secondary workflow which is receiving the payment so invoicing the client which is the act of delivering the product or completing the service it's a completely separate transaction from a receive payment now when the payment is received quickbooks will ask you where would you like to put that payment in some cases that money goes straight into the bank for example if you get paid with a wire transfer that goes straight into the bank but most commonly we get paid in cash or with a check and most small business owners don't really go to the bank every single day or immediately after getting paid most people will group those payments and maybe go to the bank every thursday or every tuesday and thursday and that sort of thing and this is why there's a step in between receiving payments and bank deposit is basically two transactions as you can see right here they're two separate icons it's because there is a chance or there is a common case in which we'll get payments from multiple customers throughout a couple of days and then we want to bundle them all together into a single deposit using the record deposit transaction so that's why it is a two-step process receiving a payment and then recording the deposit now let's go and start doing some examples so let's start with an estimate so i'm going to go ahead and click on estimates and let's first start talking about the general structure of the estimate window so first off depends how you have quickbooks configured you may see this bar in the top or this bar in the left now that can be easily changed by clicking on the view menu and changing it for example from top icon bar to left icon bar and that will completely change the look of the screen so it's really important for you to decide whether you want a top icon bar or a left icon bar the left icon bar can also be collapsed by clicking on that little collapse button and the purpose of doing that is to give us as much space and real estate in that estimate window as possible now the other part i want you to pay attention to is here on the right side we also have a right pane that has a sort of a name information tab and a transaction a history tab and that could also be used later on in the future so i'm going to go ahead and collapse that as well and just get as much real estate as possible into this window now up here in the top bar we have what's called the ribbon now there's multiple tabs and each tab has a different set of functions and buttons for example i'm in the main tab and there's a couple of options here there's also formatting with some additional options send and chip report search later on in the future we'll dig deep into what those functions are for the time being just kind of get acquainted with the estimate window now the first input box that we see is our customer job section this is where we either select for my current customer list if i happen to have the customer in my list that i'm about to give an estimate to or i can just click add new and create a customer on the fly so let's say for example i'm going to create a customer on the fly here [Music] okay i am going to skip address and phone number and all that stuff we had a different section that talked about that for the time being i'm just going to put the name and then i'll hit ok so yes it is completely okay for you to create customers on the fly like that the next button you see is the template button now in here you can choose uh among different templates and you could have designed some templates with logos some without logos some with certain fields some without so there's a lot of flexibility there in terms of having multiple custom estimates the next box you're going to see is date and that's always going to default to the system date so whatever the system date happens to be the data i'm recording this video this is the default date that is there but if you want to change and back date that estimate you're welcome to do so or future dated whatever you want to do now estimate number it's an empty box so you can actually override the number if you want to now i don't recommend overwriting the number i think that we should allow quickbooks to use its own natural numbering system and every single new transaction you create quickbooks will create a the next number so if i do 502 the next one will be five or three and so forth now if i happen to do an overwrite so i'm just gonna type one zero zero one if i overwrite it this one time next time i create the next estimate it's going to go to zero zero two and so forth so let's do that so we can see that in an example and then here on the name and address this is where you can change the name of the customer or the address whatever you want to do now item is the next input box you see there and this is where i can click from my menu of items that i previously created so i would have created that before hopefully before starting an estimate now if you don't have the item in your list that you're about to do an estimate for you are welcome to click add new and create the item on the fly refer to session 4 that talks about all those items and that sort of thing so for the time being i'm actually going to pick items that i have on my list so i'm going to provide maria an estimate to do some let's say some computer work so i'm going to select my hourly support item which is my sort of standard item that i created for that and on the description if i happen to have a description of that item that would populate automatically but this item happened not to have a description so then i can type whatever i want in here so i can put uh clean up maria's computer so let's just assume that i'm doing some computer work under quantity in this case if this is going to be hourly support and that's the name of the item then obviously the quantity is going to be hours now it's really really important that you have a lot of clarity around what the unit of measure is so if you are charging by the hour your quantity should be hour now it is possible and we have another session where we talk about modifying the look of the template it is possible to change the name of that header and put the word hours if you want it to so let's say for example that's going to take me three hours now on an estimate it is possible for me to put a rate which would be like an internal cost like an internal calculation of how much i think is going to cost me uh that hourly support item and then under markup i can just add a percentage or a dollar amount that i want to mark up on the deal so that's the nice thing about the estimate that you can work in this rate markup dimension now if that's confusing if you don't want to work that way you can work a different proposal and there are multiple proposal templates and you can also edit them in which we hide that information and we just work with the end price now keep in mind that even if you were to choose to work with the internal rate and the markup you can still hide that so the end customer doesn't see it so anyway um so this is 75 dollars an hour times three the total is 225 and you notice that my individual rate is hidden from this particular template this is why you got multiple templates so you can work with the one that you think is going to be best anyway so let's say for example i'm done with the estimate at this point i could print it give it to my customer so i can click on print i'm going to click on preview just so you can see what that's going to look like and that's the standard template that comes with quickbooks now there's no logo no colors you're welcome to change that and we'll have another session that covers that but for the time being let's just work off the default and this is exactly what your customer is going to see so at that point you may require a verbal agreement maybe they need to physically sign the estimate whatever you want to do that's really up to you now you can also email it to your client so i can click on this email button and click email estimate and on this screen i have to make sure that i do put my emails at my client's email address and my own if i haven't set it up before so of course if you have not configured an email address in your own quickbooks you're going to be asked to doing that but the most important question is hey what is your customer's email address so i can email that invoice to them so when we hit okay then quickbooks will ask you to connect it to your outlook profile or maybe create your gmail connection or yahoo whatever email you happen to have and then you click on send now and that will basically send the email over now i haven't configured it on the sample file but basically in a nutshell what you are going to get is a pdf of that estimate attached into an email and you can also modify what the email looks like if you want to change sort of like the template of the wording uh but what the end end product is going to be a pdf of the of the estimate so once we finish with that i'm going to go ahead and hit save and close and that will just save my estimate into my system so i really don't have to worry about it anymore or think about it anymore i have a saved estimate and one of the nice things about quickbooks is i can go into customers customer center and i can click on this little tab up here where it says transactions and then click on estimates and then i will have a list of all my estimates now we'll have a different session that talks about what i call customer management and receivables management in which we explore where all these windows is uh do however for the time being there's an estimate in the system you just have to remember or know that it's there but you really don't have to think about it anymore now at the same time we can have another customer call in and also require an estimate so let me go ahead and click on estimates and then we're going to have an entirely different customer let's say for example that miami hospital one of my commercial customers specifically the maternity expansion sublocation requested an estimate a big one okay so we're about to get a big estimate so let me go ahead and select my customer up here and then here on the estimate number you will notice that the last estimate we created was one zero zero one and then it automatically moved it to one zero zero two now under item i can now pick all the items from the from the estimate the client requested so let's assume for a second that the client is asking me to sell them a couple of computers do some installation include some cables and also do some training so let's be very specific the client's asking you to sell asking us to sell them one server 25 laptops installation for each laptop additional software for the laptop all the cabling required for the laptop and then some training so we're gonna we're going to use those circumstances to to to build an estimate using all the things the client is asking us to to sell them and we're going to use what i just said as the way we create the estimate so let's start with the server so the client told me that they want to buy one of the servers from me so i'll go ahead and pick the server from item list and under quantity i'll go ahead and put one and then there's my default price to my customer 3500 let's say for example i don't want to mess with that let me also charge my customers some of the installation required to do that server but i have two types of services i have hourly support and level two support and let's just assume that a server is more expensive so we're going to have let's say more expensive type of services so that's why we have two separate uh service items there so i'm going to pick my level 2 support which is at 150 an hour and we'll say that it took takes about four hours to work on that so i'm gonna go ahead and overwrite the description because maybe i don't need to have the word level two support maybe i wanna have something more specific like installation of server and let's do it all caps installation of server perfect okay then i'm going to go into the next line where i'm going to start now uh accounting for the laptops that i'm going to sell now i like to skip a line so i'm just going to go ahead and just simply just skip a line right there so i'm going to skip a line and then put my laptop there so i'm going to hit from my drop down screen if i don't know the name of my product and there it is is my laptop dell x300 so i'll pick that one and then i'm going to go into quantity and then i'm going to put 25 because that's what my uh client asks for they asked for 25. then on the next line i'm going to put the service related to that particular product so let's say for example to install laptops it's really going to be the regular hourly support service so i'll pick that and again i'm using this example that's very specific to a computer company but it's what i want want to get you thinking about that depending on whatever business you're working on you know there's going to be a mixture between products and services typically sold and how you organize them in one order how you put them next to each other matters and and it makes it easier for the customer to decide to buy from you or not if the presentation looks nice so i already support i'm going to put here installation of laptops and i'm gonna say in parentheses 1.5 hours per unit okay so then in that case i have to multiply uh 25 times 1.5 which i can actually do on the fly if i happen not to know what that number is i can put 2 5 and then i can put times which is shift 8 in most keyboards so times 1.5 and then i'll hit tab and then quickbooks will calculate that for me and i just did that basically on the fly so i got 37.5 hours times 75 dollars an hour and then there is my end uh result so let's say for example they also wanted me to include all the cables required to plug all these computers in so i'll put it right under the laptop i think i have an item for that yes i do network cables and let's say it's just going to be a flat fee so no no units we're going to guestimate it's going to be about 250 dollars in cable so we're gonna put uh change the description and put uh total total cables and connectors needed something like that right and that way you know the customer doesn't have to have everything uh piecemealed everything by the unit you know sometimes you just you could just put a a lump sum amount uh to represent that and let's say for example they also asked for training a training service so i'm gonna go ahead and use my level two support because i guess that's the rate that we use for training and then we'll put here training of 50 staff members over for the period and we're going to type flat fee per day okay so because i'm going to flat fee it out per day then under quantity i'm going to put four because that makes sense it's a four day period but let's say that whatever a flat fee for training is let's say it's 9 75 that way it will just do the mathematical calculation 4 times 975 is 3 900. and that in a nutshell is how you construct an estimate using items that are already on your list now one of the issues is uh one two three four five six seven there's only seven lines there so there's one way you can make that a little bit bigger so you get a little bit more lines which is you can click on the maximize work area button on the top right so that's the little all those arrows that go in every direction so if i just click on that i'm just going to get rid of the ribbon and give me a little bit more space doesn't give me a heck of a lot of space but it gives me at least three or four more lines um and then i could just click on the icon that says restore your work area to get back to where i was so that i get a little bit more of space by clicking that button let me go ahead and click on print and preview just so we can see what the estimate is going to look like and i do get a spell check right so if i misspell something i could ignore it or use a spell check if i wanted to so then there's my estimate here let me go ahead and zoom in and this is exactly what the customer is going to get right in this particular template the individual items are not showing that's just the way this template was configured um so you may again look at the other session that we're going to have on modifying templates where we'll discuss how to pick and choose what we're going to show the customer hide from the customer when we do an estimate or an invoice okay so that estimate is done i'm going to go ahead and hit save and close and let's say that's it you know those are the two estimates that i did for the day now let's say my first customer calls me back and says okay let's go ahead and do it let's let's do the service that you quoted me so then we'll go to the house and do the service or perform the work or deliver the product whatever it happens to be and then we're gonna we're ready to invoice our client so the next step is we're gonna click on create invoice and we're going to choose a customer job and there it is from my list and quickbooks will recognize and you're going to see it by the availab available estimates window quickbooks will recognize that there are outstanding estimates for that customer now if i hit cancel it's just going to go to a blank invoice and that means i would have to retype everything i already typed in the estimate and that's really not what we want but if it happens to be us trying to invoice the client for something completely different than the estimate then that's what we would do we would hit cancel but let me go ahead and hit clear down here at the bottom and start over and select my customer maria gomez again so we get that window so available estimate so let's say we do want to pick from that available estimate we'll go ahead and select that you're going to see the darker green there that basically lets you know that you have selected that estimate and then we're going to click ok or we can also double click on that it gives you the same effect then once you do that everything that i had already uh typed on my first transaction the description the price the item name the quantity it will port over to the invoice so there's not additional work to do an estimate and an invoice uh together so there's my invoice and which contains a service item and we can click here where it says terms and again refer to the other session to pick and choose what fields you want to see here or don't want to see here but under terms we tell it well we're going to give you let's say 15 days to pay and then that will make that invoice overdue after 15 days so we'll go ahead and either again print it let's go ahead and click preview to see what that looks like so either print it give it to our client or mail it or click an email email to our client whichever way we want to move forward so i'm going to go ahead and hit save and close and then hit yes and then there's my estimate so my estimate has been created and um i'm ready to now receive a payment from a client so again if i am getting paid on the spot uh then i don't want to do an invoice i want to do a sales receipt now why do i want to do a sales receipt instead of an invoice because the sales receipt is an invoice and a payment combined so instead of taking two steps or two transactions because the monetary compensation the payment from the client and the invoices being issued at the exact same time there's a direct exchange at the same time then at that moment i would use a sales receipt instead of an invoice but let's say that's not the case we do the work and then the clients pay us later so if you're going to do that do the work now or deliver the product now get paid later then you want to use the invoice payment workflow so again this is why uh sales receipts is slightly to the right of receive payments just kind of letting you know that this one will overwrite these two steps okay so anyway so let's go ahead and click on receive payment and this is a different screen this is the screen where we pick and choose which customer is paying us so let me go ahead and click on receive from and pick maria gomez and there she is with her open invoice of 225 i'll just basically hit the little checkbox there letting letting quickbooks know that i want to apply that payment to that invoice now in here i can choose to receive a different amount let's say for example the client is paying me short that's possible or partial payment whatever so you would be able to change that or if what you got paid is actually 25 that's what you would put there now this little buttons here allows me to choose you know what's the type of payment you know did i get paid in cash check credit debit card hit the drop down menu and i can have even more payment methods so i can actually go to payment method and i can type wire and i can basically create a payment method for wire if i wanted to kind of categorize them like that so if the client was paying me with a wire transfer i can just pick that wire there or i can pick cash check whatever the default ones are there now if you do get paid with a check i strongly recommend that you take the number from the check that you got from the client right the physical check read the number and type it in here and that's always useful because clients always think they paid you already especially when you charge the same amount every month if you happen to be in that type of business if the client comes back and says yeah i did pay you check four five four five four whatever you can go back and research and look at it and say yeah you're right you did pay me but that was for an entirely different invoice so that becomes useful for you to keep that as a record there now if you get paid in cash there is a place for a reference number but it's not really that useful unless you're giving out manual cash receipts or something like that and then under credit and debit you can actually put the number or don't put the number and if you do enable payments is an additional service you can get with intuit called quickbooks payments if you enable that service you can actually uh physically put a credit card and quickbooks will actually process payment and get you paid through the merchant system uh even if even when you email the client the invoice you can even enable a digital payment option with the client themselves and the end client i guess the invoice can actually pay you electronically as well so it's really neat what you could do with that quickbooks payments option that you can add as well but let's say for example they pay me with a check so i'm going to select check there and then i'm going to hit save and close and now that payment is fulfilled so that invoice is no longer showing open that's actually uh uh fully received fully closed fully paid now you're gonna see the next step here is record deposit now if you're working with quickbooks 2017 and above you're gonna see that little bubble there with a one or a two or a three just kind of letting you know that there are pending payments waiting to be deposited if you're working with 2016 or older that little bubble with the number is just not there but the process is the exact same thing now if i want to make the deposit to the bank i'm going to click on record deposit and then you're going to get a pop-up window that's going to say hey you got this much pending to be deposited would you like to pick it and actually use that you know the process slip and go to the bank so let's say for example i'm not going to go to the bank yet so i'm not going to complete that deposit so let me go ahead and hit cancel and then close that window we're going to go ahead and receive another payment we're going to receive a powershell payment for that big project that we had for that miami hospital client so i'm going to go ahead and click on receive payment and notice that i'm receiving the payment even before i do an invoice and that's okay because some clients pay in advance and that's that's totally fine so when it goes to uh receive from i'm gonna pick the specific customer or job that they're making that deposit to notice that they're down here there's no open invoices because we only have an estimate to work with so under payment amount let's say they're paying me 10 000 and then i'm gonna choose the date that they're paying me with maybe i'll put my the check number from my client and it would be useful for me down here under the memo screen put a prepayment for estimate 1 0 0 2. okay so that just becomes just basically good reference for me to know that because i'm not applying it to any specific invoice i know that that's going to be a deposit for a future invoice so i'm going to go ahead and click save and close and hit okay and then i'm gonna click on record deposits and then i'm gonna see two payments two customer payments that i have received then now they're ready for me to make a bank deposit so let's say for example that's the case i'm gonna grab those two checks and go to the bank and make one single deposit for ten thousand two twenty five so i'm gonna select uh both of those amounts and those two amounts are gonna add up here in the bottom and that's gonna match up my deposit slip and it's also going to match what the bank shows so i'm going to go ahead and hit ok and then here on the top left really important if i'm working with several bank accounts make sure we pick the correct bank account and down here in the the process of total again it tells you what's going to show up in the bank statement what's going to show up in the deposit slip when you actually make that deposit and then you're going to get the two lines with each customer letting you know what payments are inside that deposit now this area here where it says from account on the positive funds that's basically letting you know that the money came from an account called on the positive funds now i'm going to go ahead and hit save and close and it can explain what that is so i'm gonna go ahead and hit save and close and on the positive funds is this account that sits in between these two uh transactions so in between receive payments and record deposits that's the accounting account that is the temporary account where all of the customer payments go into before we make the bank deposit assuming we're doing this two-step process this is why when i record the deposit um it actually it looks like it's undeposited it doesn't it's not on deposit it means it came from the temporary on the positive funds account so that's that's what that means when you actually see a deposit and you see the word on the positive the funds there that's totally normal that's actually a quickbooks thing but it's totally normal and it is something that you you are expecting to see so i'm gonna go ahead and hit uh save and close now let me go ahead and now invoice the the estimate that i did for the for the miami hospital the one with a big job now i'm going to give you a quick warning um i shouldn't be invoicing inventory okay so i'm going to go back and create uh invoice and show you what i mean by that so i'm going to select my customer that i already had an estimate for and then yes i'm going to select okay select the current estimate and quickbooks should give me a warning saying hey warning you shouldn't be selling perk that you don't have in stock now i'm going to go ahead and overwrite it just so i can finish the example but that is a window that you pay really close attention to if you're managing inventory you should never ever sell something that you don't have in stock because that's going to create a negative inventory transaction and it's going to mess up your financial statements it is possible that you may want to work with another transaction called the sales order which is somewhere between an estimate and an invoice and there's going to be another session in which we'll go in depth into a sales orders and the concept of back order for now we're just going to make the assumption that that we had it in stock so i'm going to go ahead and ignore those messages we're going to have our next session will be about vendor transactions i will talk about creating a purchase order a bill receiving the inventory paying that bill that would be on the next session for now i'm just kind of laser focused on the invoice so there's my invoice although like i said there's some errors because i'm selling stuff that i don't have in stock but for the time being i'm still going to be able to move forward and create the invoice okay so i'm going to pick the terms so let's say i'm going to give these people 60 days to pay and there's a couple of fields here on the invoice again those can be modified if you want to select the date that you delivered the service sorry delivered the product or or completed the service uh to match that and then we're going to go ahead and click save and close okay so once that is completed um i get a pop-up saying hey your customer has available credits would you like to apply them to the invoice now that only happened because i previous to creating the invoice i received that prepayment for ten thousand so if i do hit yes i can actually apply that prepayment if i want to i'm just gonna hit cancel for now uh just because we're gonna have another session uh that talks about prepayment so i would like to just laser focus on on that portion so i'm going to go ahead and click on receive payments and let's say later on in the future when i do get the payment for that particular job there's my invoice there for 21 000 which is showing an available credit of 10 000 which was the previous prepayment and then at that point let's say they're going to go ahead and pay us the difference so i'm going to put here the difference of payment and put the check number from my customer and then go ahead and click save and close and just to do one more example i received the payment first the money is sitting in on the positive funds now i have to make the deposit so i'm going to go ahead and click on record deposit and select that uh payment that i got from my customer and whenever it's time to go to the bank and make the deposit and create the process slip and so forth i'm gonna use this function uh make sure that i check which account the money is going into and then save and close and that's in a nutshell how we create estimates invoices receive payments and record deposits on this section we're going to be talking about the vendor workflow or vendor transactions if you're in the home page which by the way the way you get to the home page is by clicking on the company menu and home page and as i mentioned before i really like using the home page as a place to understand that workflow anyway in some cases we actually purchase inventory to have stuck in the warehouse and in that particular case we would go straight to purchase order in some other cases we have orders that we place before beforehand like an estimate or a sales order which is not shown here the icon would show right around there and we want to place an order for inventory based on that specific estimate or sales order and then use that workflow right so we're going to follow the icons and go for estimate straight to purchase order so you can either create a purchase order from scratch because you're buying inventory for the warehouse or for stock or you can follow it through from a sales transaction like an estimate or a purchase order a sales order i mean anyway uh let's create a purchase order from scratch so we're going to go ahead and click on the purchase order icon right there on the desktop and we'll click on that and we're going to get a form that looks very similar to an invoice an estimate a sales order any other forms for either selling or purchasing the old look very similar uh this left navigation bar we're going to go ahead and collapse it by clicking on that carrot there the little triangle uh shaped icon there that will give us a little bit more real estate to work on on the right of the screen we're going to do the same thing for the name and transaction history pane we're gonna go ahead and hide that that will give us a little bit more uh real estate i'm gonna hit escape for a second just to show you um we get out of the purchase order altogether and let's say i'm not on the home page and i want to create a purchase order so there's a couple of other ways to do a purchase order one we can click on the vendor menu on the top and then click on create purchase order if you do quite a bit of purchase orders you can follow the keyboard shortcuts so for example you see there's an o that's underlined and then you see the u that's underlined that basically means that if i follow alt o u that would enable my purchase order so i'll just do it on the screen here real quick on my keyboard so i'm going to alt o u and that will open a purchase order another another place where you can access purchase orders is if you happen to be inside the vendor center because you're managing payables or something like that we can click on the new transactions button right there in the top right of the screen and then we can click on purchase order so that's also possible for you to follow that workflow all right so let's talk about the components of the purchase order so first of all the ribbon on the top of the screen which is common to all the transactions invoices sales orders purchase orders estimates in the top you're going to see main you're going to see in the top right it gives you the previews and the next transaction and that basically cycles through past transactions we have created in the past if i want to recall a purchase order that i already know about everybody have created in the past i'll just click on the find button right there on the top right and put the number of the purchase order or whatever happens to be and then click on find and that will take you straight to that purchase order now we'll skip some of those buttons up there so we can start talking about the actual transaction itself so the first thing we do is click on the vendor drop down menu for us to choose which vendor we're going to purchase from now if we don't have the vendor we just click on add new and then create our vendor on our normal process so let's say for example i'm gonna buy some office supplies from office max and for whatever reason let's just assume that i resell this right so i'm gonna go ahead and clean my vendor here real quick i'm going to skip address and that stuff just because uh we cannot speed things up by just doing that in the the example so skip all that stuff but of course i strongly recommend that you do enter all the vendor information there especially if you're gonna write them a check and mail them a check that will become really really useful anyway so we select the vendor and then there's a drop ship to button so basically drop ship two is designed for us to give the vendor instructions to take that inventory that we ordered and ship it straight to the customer so if i select a customer here on the drop ship tool location you're going to see on the top right of the screen you're gonna see the ship to location it's actually one of my customers uh address which is based on the customer job that i selected up in the top if i just simply just delete that all together and hit tab you're gonna see um our own company address reverts back into the ship to um box in the top right so that's just an option of course not everybody does that drop ship now the date of course you would pick today's date or whatever date of the order purchase order number you should allow the the sequence that quickbooks creates naturally to occur i don't recommend you sit there and you modify purchase order numbers a lot of people what they do is they take the invoice number or the sales order number or the estimate number and they put it in there so they force the purchase order to carry the same number as the original order in the in the assumption that they're doing back orders or something like that i don't recommend it just just allow quickbooks to have its own natural workflow if you want to make note of the original estimates to the customer or sales order to the customer that cost you to have to make that special purchase order i recommend to use the memo down here in the top on the bottom right of the screen you can put there so one two three four or whatever to let you know that i came from sales order one two three four or that sales order one two three four is the one that costs you to create a purchase order because it happens to be a custom order so that's just an example of how you should handle annotating an original sales to a purchase order anyway let's just do a regular order of inventory items for our warehouse for our stock so i'm going to click here under item and i'll select whatever products i'm buying so whatever products i'm buying from this vendor i just basically select the product and that's going to automatically put the description that's part of the obviously the item name and the item configuration quantity this is where i put how many of them i want to buy so if i put 100 that's just naturally going to multiply 100 times the rate and then give me the total amount now um let me pick another item so i'm just going to click down here under its own item i'll pick a different item altogether and let's say i'm gonna buy four of these okay so basically you see the purchase order start totaling on the bottom right you get to see the total of that purchase order now i could also skip a line if i want to for whatever reason if it makes it easier for me to uh show what the product being purchased is or maybe i'm i want to group them together in some logical fashion that will make it easier for the vendor to ship it or or group the items together for whatever reason i want to insert a line so i'm going to go ahead and right click and click insert line and that that will work i can also click on the edit menu on the top right and click insert line that works just as well and of course we can always welcome the keyboard shortcut that would be a control insert so control insert will give me that keyboard shortcut to um add the line and then control delete of course we will do the same thing as delete line now there's also copy and paste line which is actually kind of an interesting concept so if i right click on it and then click on copy line not the same thing as copy now the same thing as hitting ctrl c this is copy line so if i do copy line i come down here another line and baseline i'll basically bring the exact same information from there so that's useful if for example i'm going to buy four for customer a and then the other four for customer b and i want to have uh basically all the work that i did while i was typing that information in that line if i wanted to duplicate that would be a perfect example of where the copyline and baseline could be used so here where it says customer i can tell um for all for let's say internal purposes i want to tell let's say my warehouse manager or whatever let them know that these products are being specially ordered for these uh two customers so that will help you know um because when you do reports and purchase orders and and bills once you receive them that customer job is going to be sort of attached to that item now that doesn't affect inventory so if i do order these and they're for a customer they still go in my stock they're still are going to be part of my quantity on hand but at least for reporting or researching you'll let me know that the intention of that order was to give it to that particular customer otherwise if if it's inventory that's supposed to go to the warehouse or stock just leave that customer blank or some people actually create a customer called stock and then they basically select stock in there that you can do that as well that's not a problem whatsoever it doesn't cause any issues that's really up to you uh but not really necessary now shipping i get this question all the time you know should i put my shipping cost in the purchase orders i would say if you know exactly what your shipping is you you negotiated the shipping with your vendor um if that's the case then go ahead and put your freight or your shipping line i don't think i have one here do i have one i don't let me create one real quick so i'm going to go ahead and create a new item and go ahead and create a other charge and that's typically the type of item we use other charge for freight and shipping charges i'm going to go ahead and put freight and then i clicked on this little check box here that says this item is used for assemblies or reimbursable charge you know what i know that makes no sense uh just have faith in me just hit the little check box there and what would happen is um quickbooks is going to open up that item to be used in two contacts so you can use it on the on the cost context that means when i get a purchase order and i receive that inventory and there's also going to be on the sales price context that means that they charge the client freight and if that's the case my expense account is probably going to be different on the purchase side than on the sales side so let me select my account that i'm going to pick for freight so i got an account here called freight and shipping cost and it's a cost of goods sold that looks like the perfect one uh to use so we'll go ahead and pick that one and then on the income side we have uh the income account we're gonna go ahead and pick in this case let's say shipping and delivery income so yeah so it didn't look like we had an account just for that and yes the right side account should also always hit an income account and the account on the left side should always always hit a cost of goods sold account makes total sense and then under cost we're gonna go ahead and just delete that leave that blank uh because that that will change every single time in other words we really don't know how much our chip in charge is gonna be until we actually get bills um for the most part right so we're gonna go ahead and hit okay and let's say for this one we happen to know or let's say estimate what the shipping charges are let's put here 1890 and then in the description i do recommend that you put here uh estimated shipping that way you're letting another quickbooks user uh know that when you receive this it should be exact it should be precise okay so i'm gonna go ahead and click save and close and i may get a spell check if i misspelled that of course so i can ignore the spell check or obviously follow it and that would be i got my purchase order uh now quickbooks is going to know that i'm expecting a product in there and again as i mentioned before if i go to my purchase order screen and then i click on this little previous transaction button if i click on that that would actually cycle through all my previous purchase orders and again if i happen to know that my purchase order was purchase order number four um i can just click on find up here in the top right and i can put purchase order four and then click on find and that will take me straight to it now the reason why i went back to it is because i want to discuss other things as well for example print if i click on the print button i can do preview which will tell you more or less what that purchase order is going to look like if you print it or create a pdf to email it to your vendor there's also a few other buttons here like uh purchase order which is basically the same thing right the purchase order button takes you to a print screen and but that goes straight to print not to preview so those are the two um uh most uh obvious options up here we got preview and we got so we got preview and purchase orders of previews to see what it's going to look like before you print it and the word purchase order means print purchase order that goes straight to print and then we got the batch button which basically takes me to a little pop-up screen that allows me to print all purchase orders in batch that were marked to be printed later so that's what this uh little checkbox is to be printed later that's assuming you don't want to print it right now and you want to basically print them in batch later you click on the little checkbox and that's one place that you can enable that massive uh batch printing and then you can obviously um email it um in batch or or or just one by one to your vendor straight from here there's a little uh curious little option here that's grayed out that says purchase order and attach files so what does that mean uh let's assume for example that on my purchase order to my vendor i need to send them another file that has some sort of technical specifications about what i'm ordering um could be a picture of the product or it could be uh maybe a sketch of it i mean if it happens to be some sort of custom product or it could be you know maybe some special instructions that i have in a word file excel file or pdf file so what that little option there means if i click on attach file and i happen to attach something okay so whether it's a an excel file or a word file or pdf or picture whatever happen to attach something to it um then you get a little icon there that shows that one just letting you know that there's an attachment to that purchase order so then when you go email it one of the options would be email it with the attached files i still wait out because i have to configure my email software to work with my quickbooks but when that's there that's what that option will be for so that option will actually allow you to attach files with that email to your vendor anyway so that pretty much summarizes what the purchase order is in a nutshell so let me go ahead and click on save and close and let's go to the next step in the workflow so the next step normally is we have a whole bunch of purchase orders outstanding and at some point in time we send it to our vendor and our vendor ships it to us now when they ship it to us we have two choices we can either receive it with a bill which basically means i'm receiving the inventory and because i happen to have the actual bill from the vendor handy um i can actually double check that every price is there and the shipping amount is correct and all the quantities are correct so if i'm ready to do that at that point the receiving i would click receive inventory with bill however some people some quickbooks users delegate the receiving tasks to other employees that maybe don't have access to a lot of the functionality inside quickbooks like for example i got some folks in the warehouse that what they do is they receive product and they ship it but i really don't want them to be messing with my accounts payable for example so i don't want them to be touching my bills so then i would do this in a two-step process so first i would say inventory receive inventory without the bill and then we'll do the second step afterwards so let's start with that step kind of kind of show you how that step works so i'm going to click on receive inventory without the bill and that's going to send me to a screen called the item receipt now the item received is the same thing as the bill right we just talked about it just now but it's the same thing as the bill and it can easily be converted to a bill by clicking on that little check box there called bill received so if you ever see a a bill with a little check box in there if i uncheck it it basically becomes an item receipt and in a nutshell an item receipt is a a bill that doesn't post to my pay bills window therefore you can't really pay it until you verify that the bill is accurate but it does receive the inventory and it does affect my accounts payable like it should be anyway so i'm in the item receipt window and i click on the drop down uh menu there and then i'm going to pick my vendor so i'll click your office max whatever my vendor was and then i get this pop-up and it says hey the vendor that you picked already has purchase orders outstanding do you want to write one from scratch basically you hit no or would you like to pull an existing purchase order so i can mark that one received and then all the data that you wrote in that purchase order gets transferred over to the bill or to the item bc and of course the answer that we want to put there is yes now if i happen to have multiple purchase orders for that vendor i'm going to see multiple lines in there in this case we only have one so i would check which purchase orders i want to receive and yes i can have one item received or one bill that contains multiple purchase orders and receive them all in one shop why because sometimes we'll send a vendor multiple orders in one day for example let's say multiple sales people multiple warehouse people send the orders to the vendors and the vendor when it's time to ship they consolidate two three four orders all into one to save you shipping or maybe whatever the arrangement you have with our vendor and then once it comes in they actually only send you one bill and in their notes they put okay this belongs to two three four five purchase orders now some vendors just always keep it separate they'll send you one bill per purchase order and that's nice but some vendors add it all together they join them together and if that's the case you want to follow through and match your vendor's billing system with your purchase orders that way just all make sense when you're paying them and when you're reconciling your accounts payable with their accounts receivable anyway so i'll select that po that i'm receiving and then i hit ok and then you notice that all the items and all the descriptions and accounts amounts all that stuff that's going to flow through including the customer job selection that's over here and that's in the items tab so notice how we got an items tab here a little bit later on when we talk about bills not related inventory we'll be working on this expenses tab uh however for the time being kind of our focus is going to be on this item stack and uh quickbooks by default will put it into items because these were products and services that we that we buy and sell our items and that came from a purchase order so naturally it's going to put it in the items tab now some of the things worth observing here on the right side we got a column that says po number pretty much letting us know that that line item came from a particular po and it happened to have multiple po numbers in there you would see them there there pretty clearly and now for three of these i selected a customer job basically telling me internally that those products were ordered for a customer so you get a billable a box pop-up basically asking you do you want to build these products to your customer now this is an area of a lot of confusion for some people if i created an estimate beforehand or a sales order beforehand i don't want to mark this billable because billable will prompt me to invoice him again on top of the other documents i already created like a sales order or a an estimate so billable is only for when i order something for a customer but i don't have an estimate or i don't have a sales order and i want quickbooks to remind me to uh invoice my client for it so let's just assume that for the first two that's not going to be the case we're not going to mark them billable but for the third one this maria gomez customer we do want quickbooks to remind us that i gotta invoice those four products to to that customer because she's the one that ordered anyway so reference number would typically contain the invoice number of your vendor uh but if you have an item receipt because you didn't have a bill normally in their packing slip they're the document in which they send you the products in and it shows you what you have that has a number and that typically ends up being the invoice number from your vendor which becomes your bill reference number later on but then that's where you type that number in there and you can change that later that's completely okay and then that's really all you need to know about the screen so i'm gonna go ahead and click save and close and that receives the inventory so just to check and double check i'm gonna go to the list menu and then item list when i go to list item list i get to see all my products and then i also get to see the things that i have in stock so i must have received this product in other purchase orders but i get to see you know how much i have of each type now i can click on any of these in particular i can right click so i get that right the right button in the mouse and i can go all the way down to almost the last choice called quick report quick report will show me the history of that item so i'm going to click on that and there it is okay so i got my item receipts here that bring the product in there so it looks like we brought eight total uh four word for one customer and four were for the other customers so that makes uh total sense i can hit escape and that will close that window now a shortcut for uh the quick report is ctrl q so i hit ctrl q and that will show me my quick report very useful to kind of know what's going on with that item anyway so i got inventory in stock at that point i would probably sell it or invoice it and we have another section that talks about invoicing and that sort of thing but then the next step would be entering bills against inventory so on this screen i just basically select my vendor office max it will show me all of the item receipts that don't have bills associated with them that were received as an item receipt uh without a bill what we just did just now and we'll go ahead and select that and only can only be done one by one so i can't combine multiple item receipts into a single bill absolutely cannot do that so it's every item receipt would correspond one bill so i select that bill i'm sorry the item receipt and then i hit okay and basically that converts my item receipt to a bill and it's very obvious because you see the little check box on the top right that says bill received and see how i can just toggle back and forth in a nutshell what that did is just took my original item receipt converted it to a bill and then took away the original memo so i can type in whatever i want because the original memo says receive items built to follow just kind of let the user know what's going on so i'm going to go ahead and hit save and close and hit yes and i will receive uh the bill into my system which basically already contained the inventory that was received but now that bill's ready to be paid now i want to show you a little bit different workflow i'm going to click on purchase orders i'm going to select a different vendor let's say i'm buying something else all together i'm going to pick here microsoft and then i'll pick a different product let's say i'm buying some licenses of microsoft office select that and then i'm going to put let's say 50 licenses and then i got my po for 7 500 po number five so i'm gonna go ahead and hit save and close and then i'm gonna click on receive inventory the same thing without bill then i'm going to pick my vendor so that would be microsoft follow the exact same process i'll hit yes select the po hit ok make sure that my received date is accurate and then i'll click save and close so an alternative to clicking on entering bills against inventory an alternative to that would be going into receive inventory without bill clicking on find and going through the search process to find through my vendor maybe with the reference number with the amount whatever happens to be and click on find pop up my original item receipt and simply just hit the little checkbox so that hitting that checkbox is basically the equivalent of doing that that two-step process of clicking on receive inventory without bill and then creating the bill afterwards of course i could just create a purchase order i'm going to do it one more time so i'm going to create a purchase order order a different product altogether hit save and close and then go straight to receive inventory with bill i did that too fast receive inventory with bill so i can go straight to that and i'll go straight to the bill and follow the exact same process but this time around with a bill not a item receipt that way uh the workflow goes straight from purchase order to bill so it's up to you if you want to go purchase order item receipt uh enter bill bill against item receipt or if you want to do purchase order item receipt go back to the item we see in the future convert it to a bill or you want to go straight purchase order bills up to you what fits better for your business but i think is either way it's really good for you to know all the differences anyway so i'm going to go ahead and put a reference number which will be the invoice number of my vendor of course and then i'm going to click on save and close perfect now let's talk about bills that have nothing to do with purchase orders so there are many situations in which we get bills for things that we didn't order but it has to do with like the day-to-day services that we get for our business so i'm gonna go ahead and click on enter bills and then i'll create a bill for example for my electric company for my utilities company so i'm going to call this state electric whatever the name of my utility company is go quick quick add as a vendor and then go ahead and put the amount due and the reference number sometimes a utility company send us an actual invoice number or reference number or sometimes they just say january or they'll say date a to date b whatever reference makes sense to you put that on the reference number and then down here where it says items we're not going to be using items we're going to be using expenses why because expenses is for regular accounts expense accounts and um items is more for products so for anything that hits my gl directly which is counting term for something that goes straight to my chart of accounts i'm going to use this expenses tab so i'll pick uh utilities or whatever the name of my account that i use for my um electric services so i'm gonna hit utilities and then i'll click uh save and close and that'll completely save my bill let's do another example i'm going to go ahead and click on enter bills and let's say i'm going to put the bill from my landlord so i'm going to put whatever my landlord's name is right i'm going to create the vendor for that if that's not already in my database i'll pick the date so let's say for example january 1st is the date of this bill on the reference number i'll just put here january and let's say this is 1800 but the most important part is the due date so by default quickbooks is going to add 10 days to all the bills if you don't specifically choose the term so in the case of rent for example most of the times the due date is due on receipt basically if my rent is on the first it's due on the first now you can create your own terms um if these terms really don't match let's say for example our landlord gives us until the fifth so it gives us an additional four days to pay without really paying a penalty so i can create the terms called net4 which will basically push my due date four days in the future and that's a pretty simple concept we just click on terms add new and then we'll call this net4 basically letting it know that it can go uh to four more days you can also call these terms uh fifth day or whatever whatever makes sense to you right whether it's net four or fifth day whatever you want you can do that so you can work with two days or you can say date driven and you can say uh before the fifth of the month so you can actually manipulate it based on specific day of the month or a specific number of days after the original bill date so we'll leave that one there and then hit okay and you're gonna see that our due date went to the fifth and this is gonna be really important because when we go pay the bills uh we may wanna do some prioritization and pick and choose which bills make more sense to pay now or to pay later based on your business and your needs and you may want to really really know what the due dates are before doing all that okay so let me pick my category here so that's rent rent expense whatever that's called in your chart of accounts and then i'm going to click on save and close and it's going to ask me hey you changed the terms of this vendor would you like this to be the default term so anytime in the future that i create a bill for this particular vendor these terms will be their defaulted or automated so the answer is yes because obviously every time i create a bill i want those terms to be extended those days okay so we're back at the home page and i want to talk about uh paying bills now so we created a whole bunch of bills uh some that had to do with purchase orders and inventory and some that were just related to our day-to-day purchases vendors that provide services for the office and things like that and that was done through enter bills or that was also done through receive inventory with bill so the next step to pay those bills is to click on the pay bills button right there in the home page the other way to pay the bills is by clicking on the vendors menu and clicking on pay bills now one really important piece is whenever you're gonna pay a bill with a check most people instinctively go to the right checks icon right there on the top right i mean at the bottom right of the screen it says write checks a lot of people instinctively go to write check just kind of thinking well since i'm going to pay the vendor for a check i should then use that functionality but the issue is that quickbooks doesn't make it really really obvious that that is a problem i'll give you an example if i click on write check and and then i select the vendor that i want to pay again with the check like my landlord quickpost gives you a pop-up and it actually tells you very clearly what the issue is it says there are open bills shown below you should not be using the right checks window you should be using the pay bills window uh because then your accounts payable will be incorrect but most people get sort of a little bit numb by all these little pop-ups and stuff that come into quickbooks so they just go okay whatever and hit enter and they continue writing the check and there's no other additional warnings the problem with this is if i use the right checks feature to pay a bill again if i use the right checks feature to pay a bill my bill will stay open there's no way to link a right check fund a function i check uh to paying a bill now it's totally okay i'm gonna go ahead and hit no and get out of that it's totally okay to pay your vendor with the check however you can't use the quickbooks check function you have to use the pay bills function so that's here that's that pay bills button that again it's right there on the home page and also through the vendors menu pay bill so when i click on that it takes me to a brand new screen we haven't seen before which is my bill payment screen bill payment screen is comprised of a couple of interesting filters here in the top if i if i put here do on or before and basically i want to filter and say look if it's not due by the fifth i'm not interested on it if it's not i'm not due by the 24th or whatever i'm not interested on it so that's a kind of an interesting function there we can also click on show all bills and it'll basically show me every single bill that's there now we also got sorting i love that sort feature i can sort it by the original uh date of the bill i can sort it by the due date in this case discount date vendor name reference number a lot of interesting places to to sort now i can also filter by and specifically put the vendor so let's say i only want to see office max's bills and that's extremely useful for whatever i got one vendor in which i have multiple bills that i owe now i can just delete the vendor uh filter up there hit tab and and that will let me strangely just click on that and click all vendors actually i have to click on all vendors and that will show me all the available uh bills so i'm gonna pick uh go ahead and pick which vendors i want to pay and i want you to pay a particular attention to my bank balance so right now i got forty four thousand dollars in the bank if i start selecting any of these like i'll select um office max that's twenty nine thousand notice that my bank balance goes down and that's basically letting you know hey if you pay this bill uh your bank balance is going to go down and if i pick any of these that makes my balance go down uh to negative it will set you it will tell you it won't warn you it's not going to say one and you're going to go negative it's just going to show you and at that point you're going to choose whether or not you want to pay that bill because you could essentially balance that check now a lot of there's a lot of confusion because a lot of people think that if if you use a pay bill functionality in quickbooks that you're effectively actually paying the bill so this is not paying the bill this is not calling your bank or anything like that this is a a screen used for for me to print the check uh and if i don't print checks if i write checks by hand then i want to make sure that if i write a check by hand that i'm also recording it in quickbooks so i know that that payable is being paid off or maybe my vendor drafts money from my bank account directly or maybe um i give them my credit card number and i pay so there's different ways to pay your vendor whether or not you're actually writing a paper check or giving them a credit card number or giving them authorization to draft from your bank account you still have to mark them paid as they happen so as soon as they take the money from your bank account or you write them a check at that point you have to mark and pay that way you're not thinking that you owe that money and also your financial statements are accurate especially your bank balances so let's say for example i'm writing i'm gonna write office max a check by hand so i'm gonna go ahead and put the date that i'm writing them to check my hand on their method i'm gonna click uh check and then i'm gonna click on assign check number and then i'll pick the bank account that i'm paying with so i'm going to go ahead and click on pay selected bills and then if i'm writing a check by hand i just take the check number for my physical checkbook that's in my hand now let's say i'm paying them with a wire transfer um i still want to use the check feature because quickbooks pretty much calls everything check so i'm going to use the check feature but then instead of putting a number i'll just type wire there so that's just kind of a neat little trick of and differentiating between an actual check and a wire transfer so however is it that you're paying as long as you're paying from your bank we're gonna use the payables feature and then we're gonna select method check and then click assign check number and then i'm gonna go ahead and hit okay let's say for example that i'm gonna print the check so if i got my check stock um that i that i ordered through quickbooks directly or through any of the check vendors on the internet if i got my check stock and i put it on my printer and let's say for example i'm going to send these to us checks that i'm going to print so i i select the two vendors that i want to pay and then click on this little checkbox here that says to be printed so when i click to be printed again i picked up my right bank account and then i click pay select bills and then i'll prompt me now to print them so i can then just click on print checks it will show me all the checks that haven't been printed yet i'm going to take the actual check number from the from the check stock that i put in the printer i'm going to actually read the check number from the top of the check and obviously there's going to be checks under it if i'm doing multiple checks and that's fine and then i click ok and it'll prompt me to my to my print screen so then i select my printer whichever my printer may be uh click on print in this case i'm using a like a pdf printer just so you can see it so i'm going to go ahead and just kind of show you uh what that looks like once it's printed but um i'm just going to do a pdf print but that would just send it to the printer so real quick i'm going to open it up and show you what that looks like so now when i print the check it looks like this um you don't actually see the check uh information in terms of like check number and and that sort of thing because that's on the printed check itself bank account number remember this is the the printed portion that goes on the check and just to kind of illustrate what that means i'm just gonna go to google here and just search quickbooks check stock okay something like that or printable check stock or something like that and then when you go to any of these websites that sell it you can buy it from quickbooks directly or you can buy it from like this vendor here called um deluxe and this is basically what it looks like so that's what the check stock looks like and that's why you only see the stuff that actually gets printed on it on that preview that i showed you right there so that's kind of the process of paying bills um in quickbooks uh even even if you're paying with the check you're going to use the pay bills functionality now another common question i get is well what if i'm paying with my credit card or what what if my bank account is drafting the money automatically from my credit card i do the same process so i'm going to go to state electric like that bill for example let's say i want to pay this one and i'm gonna click down here it says method and then i click credit card so then i pick uh my credit card whatever my credit card happens to be amex city credit card whatever i pick my credit card and then i click pay selected bills and that money will actually come out uh no that money that came out of my credit card is being recorded in quickbooks so again this is not uh triggering any payment this is for your recording a payment itself now don't confuse um debit card with credit card so if they're taking the money out of the bank and they're using your debit card uh you're still going to use uh the method called check because it is just like a check or a wire transfer it's money coming out of your checking account not your credit card so again this check button is going to be used for wire transfer bank debit debit card transactions bank draft ach e-payment electronic payment any of whatever name they give uh money coming out of your bank account that's going to be checked whether it's a check or an electronic payment of some sort and if it's an actual credit card account we're gonna pick a credit card so then to pay off that bill or show that bill paid out of that credit card i'll go ahead and click on pay selected bills and then i'll click on done all right so here comes a big question what is write checks for and why is it different than pay bills great uh that's a great uh issue that most quickbooks users have is trying to understand this whole dynamic of pay bills and write check so as i mentioned earlier quickbooks calls everything that's money out of coming out of your bank a check including a debit card transaction a wire transfer that sort of thing but from the context of quickbooks the difference between pay bills and write check has to do with accounts payable so when you create a bill you create something called accounts payable you're recognizing an expense today but you're gonna pay it later or the money coming out of the bank account to be paid will be done in a different date this allows me to have currently an expense that i haven't paid yet right check is a little bit different and by the way they look very similar so when you're in the right check screen it looks like this and just to compare with the enter build screen they look really really really similar so that's a really important uh point to make sure that we are aware that they they look very very similar i mean they have one says bill really big on it to let you know and they also use slightly different colors but anyway um notice that when i go write a check or use the right check function that it asks me which bank account the money is coming from so it's actually asking me for my actual bank account that i'm paying this from where if i look at my enter bills window see there's nowhere asking me what bank account that is coming from so obviously this one is not affecting my bank a bill doesn't affect my bank where obviously write check does so right check is used to pay a vendor or pay a a supplier in which i don't want a difference between the day i know about the expenditure and the day that i actually pay again i don't want to have accounts payable i don't want to track something that i owe because i only want to track it the day i pay it so that's up to you whether or not you want to track bills and accounts payable track the bills you owe ahead of time before you pay them or put everything in uh write check and then just pay it as the money comes out now you can have a hybrid you can have certain vendors that you pay through checks and certain vendors that you paid through bills and pay bills but you're gonna have a lot of discipline you're gonna have to have a lot of discipline to make sure that you're sort of keeping track of which ones you enter bills for and which ones you write checks for anyway so if i pay um a vendor or i pay a third party or i pay someone with my bank i'm going to be using the right check feature now let's say for example this is not a check this is a debit card that i use to pay a vendor so let's say for example i went to a restaurant whatever the restaurant's name may be i'm going to create my restaurant here and i pay with my debit card i'm going to create a right check again because quickbooks calls everything check and then i'll put that under its own category and i put that in there and that's going to reflect in my in my bank register so so write check could be used just for debit card transactions or of course they could be used for checks so let's say for example i'm going to pay let's say a subcontractor let's call him jose the subcontractor so i'm going to pay a subcontractor that is some let's say some work in my office or whatever i'm going to pay him straight from uh using right check because i didn't enter a bill previously which is totally okay um and then i'm gonna put the actual check number so i actually have to uh get the check number for my checkbook if i'm writing them a paper check and put it in there and i'll put a category there there we go and then i would just hit save and that would just save that check into the register now let's say i'm printing the check then i got a couple of choices one is i can just click on print and then i type in the check number there that i actually read from the uh pre-printed uh check stock that i ordered from my bank or form from quickbooks or from whatever uh check vendor there's out there so i'm going to put that check in the printer and then i'm going to read the check number and type it in there and then hit ok and that will take me to my print screen so that's one way of doing it or what i can do is i can click on print later so i can batch these so let me show you how that would work so i'm going to go to print later hit save a new and let's say i'm going to pay someone else let's say i'm going to pay mary another subcontractor that i have and i'm going to put here 500 and i say choose the same category subcontractors and i'm also going to mark her to be printed later so again you can print the checks on the fly or you can record a check that you wrote by hand or you can put a print later to put them in a batch later on so i'm going to click on save and close and then i'm just going to close that and then right here on the home page there's a button that says print checks you can also access print checks from the banking menu you can also access print checks from the file menu so i can go to file print forms checks so whether i go through the file menu it'll pop up the screen or whether i go to the print checks button right there on the home page it will take me to the screen is the same exact workflow so again the same thing i'll put that my check stock in the printer put the number all the way in the top hit ok and now i can print two checks at a time so some people feel that uh they should only print checks on fridays or thursdays or whatever so you can just prompt all these checks to be printed later and you can do the same thing with paying bills so when you go pay bills as i mentioned earlier you can also mark a bill here when i pick on check i can also mark a bill to be printed so same same uh same way i can batch my regular checks or i can also batch my bill payment checks so i can do both now just real quick just kind of show you what that looks like in the register i'm going to go ahead and click on check register and go to my default bank account here my region's bank account and hit ok and then we're going to see all these transactions and notice that i entered a bunch of debit card transactions before and i actually wrote a debit on it now let me just right click on this and click on edit check again this is not a check it's confusing to a lot of people this is i paid american airlines with my debit card and i wrote debit or left it blank or put a d or whatever makes sense to let the user know that when they're looking at the screen this is not an actual check that we wrote to american airlines that's confusing to most people they're like i never write checks to these people and that's that's kind of like one of the tricks of the trade just make sure you put a d or db or debit or whatever uh to make sure that doesn't doesn't feel to the other user that they're actually um looking at a check when it's not uh anyway but the ones that i created just now notice that i created this uh bill payment to hp and this bill payment to office max and this says bill payment that's called a bill payment check but there's not enough space there and then there's my morton's debit card transaction that i had there and if i scroll down there's my uh subcontractors that i paid so if i double click on any of these it will take me back into my check i'm gonna hit escape but i'm gonna double click on one of these bill payments because these are slightly different uh when i double click on a bill payment it looks just like a check uh just like the other ones however in the bottom i don't pick a category like i don't pick you know office supplies or i don't pick rent expense or whatever or subcontractor i don't pick it uh why because that category is actually driven by the bill itself and the bill is marked paid uh through that bill payments window so this screen is basically sort of a hybrid and the top is telling you it's an actual check to microsoft where the bottom is telling you uh that this is actually attached to a bill and that um that comes full circle with the your first concept that we that we talked about which is you know the right checks feature is not the same thing as pay bills um although you can use a check to pay a bill it is important to separate the two because the bill itself uh you can track an accounts payable or something that you owe recognize it today shows up in today's financial statements but then when you actually pay for it let's say next month or next year whatever happens to be that's when the money comes out of the bank that's enter bills pay bills but if you want to pay something immediately or money just came out of your bank account that doesn't have a bill associated with it then at that point we use right checks this is section 7 working with banks if you're following with the quickbooks missing manual and you are on the 2016 version for example everything about banks is going to be on chapter 14. now you may be working with the 2015 or 2017 2018 whatever version of the missing manual you may want to check what chapter is all about banks and credit cards so if you're following with the manual that is the chapter to use as a reference anyway so i'm in the home page of quickbooks desktop here and one of the fastest ways to go straight into a bank register it's to click on the check register icon right there on the home page so if i click on register it's going to take me straight into pretty much the only bank account that i have if i happen to have multiple bank accounts it will go ahead and prompt me for which bank account i want to open let me just go ahead and show you that so i'm going to create another bank account let's say for example i create a savings account real quick and we'll call it here uh savings and now that i have two bank accounts the one checking and one and one savings when i click on check register it will actually ask me okay which bank account would you like to open so that's pretty much um you know the fastest way to get into the check register now if you don't have the home screen open you can also use a keyboard shortcut and that would be control r r like register easy so control r will give you the same exact window pop-up where you choose which account you want to open now there's registers for every single account in your balance sheet uh except actually pretty much all of them so uh some of them you can you cannot write stuff on but but most of them you can um add or remove transactions straight into the register now most commonly we work with check registers or credit card registers dealing with banks or credit cards but there are situations in which we may want to work with the register of another balance sheet account anyway i got the register open and i was also good to mention that in the banking menu there's also a use register button so there's basically three ways to access it through the home screen control r and through the banking menu now this screen is pretty easy to use this is where you pretty much enter every single uh transaction that went uh through your bank that is not already there now what do i mean by it's not already there right so if i would have uh created an invoice received a payment and made a deposit which we cover that process in other modules that would show up there so let me just show you why the register is on if i were to create an invoice and again this is just to show you uh real quick what uh what what is the impact that the regular transactions have on a register but if i were to create an invoice let's say for 75 dollars and um and i would save that and then i would go into customers and click on receive payments and i would receive that payment for 75 and then i would do the next step which is make the deposit and i would go into banking make deposit oops not transfer funds banking make deposit and then finally take that entire workflow and put that into uh the bank and hit save and close then you essentially see that transaction come into the bank register so other transactions that i don't necessarily put by hand in the register like deposits coming from an invoice payment workflow or bill payments coming from maybe a purchase order bill bill payment workflow can affect the register as well however on this lesson we want to kind of focus on just doing raw data entry straight into the register so for example let's say for example you're looking at your bank statement and you went to the bank and and withdrew some money right so so then how would we categorize that well first of all we're going to choose the date uh the transaction happens so this uh february 17th whatever date it is under payee well let's say we just uh drew some cash and put it on the petty cash account so i'm going to create a vendor just call it cash uh because maybe i just uh went to the to the atm and took the cash out or went into the counter and took a cash out whatever happens to be or maybe you were to check the cash and you cashed it doesn't really matter so i take 200 out and where do where does this go now this doesn't go into a expense account called petty cash we should never do that you know if you're taking cash out of the bank and you're using that cash to make expenditures that should actually be transferred to another bank account called petty cash so i can actually create another bank account here on the fly and i'm going to go ahead and create another bank account called petty cash and i'm basically just doing a transfer from that one bank account to the other again petty cash is not a brick and mortar bank but it is from an accounting perspective it's a bank because we're going to make actual cash expenditures and we're going to log those individually anyway let's say i'm looking at my bank register and i went to put some gas right so i would come here where it says pay and then type the name my vendor whatever bp and then hit tab and then quickbooks will say hey if bp is on your database would you like to create them and i'm going to go ahead and click quick add item as a vendor and hit ok and then let's say that was 48.67 so i just put the amount there under the uh payment column right because this is money coming out of the bank and then the account would be like the category so i could put that under automobile expense right if i happen to have a sub account under automobile expense uh called fuel or something like that and i'm just going to create it here on the fly so if i happen to have that i would certainly encourage uh having uh using those sub accounts if that's the purpose of it now on the memo i could you know i could put you know gas for the vehicle but in my opinion that's just plain redundant right what's the purpose of you writing the discuss for the vehicle when it's pretty much obvious based on the vendor name the amount and the category so only really use the memo category for things that you're supposed to track so for example let's say um we also see a charge from a restaurant okay so let's say the restaurant was a cheesecake factory okay and then i create my vendor there and if it's not in my database i have to add them as a vendor and let's say that was 128 and 50 cents and then the category for this one would be meals and entertainment and maybe memo is useful here because i'm supposed to record who i ate with right what what business associate quote unquote i ate with and uh what business did we discuss so i can say you know lunch with new uh prospects about new york project or whatever right so that stuff would be useful uh in in the memo put stuff like that stuff that maybe the irs requires you to have and then once i'm done i can hit enter or click on record and that saves the transaction over another example let's say for example i went to office depot and it was in a different dateless it was february 14 and i'm gonna type here office depot you don't have to do all uppercase that's just kind of my thing to make it a little bit easier to read so let's say we do office depot and that was let's say exactly 80 and we're gonna put that under office supplies and then the memo in this case would just be um ink for printer or something like that that that's fine and then i press enter or tab and that it would save that now one key thing about the register it confuses a lot of people is that down here was a sort by if it's set up to sort by date and i entered a transaction that was in the past or before the latest transaction after i saved office depot it looked like the transaction didn't save or disappeared which is not true basically what happened is it reordered itself because we told it to sort by date now one of the really nice tricks behind doing massive violence data entry and you don't want to go back and forth to double check to see that saved is just change that from sort by to order entered and then it will put it on the actual exact order date and time that you put in there regardless of what actual transaction date you used now in the register itself we can also enter a deposit so let's say for example we received some interest from the bank for having cash so under payee i'm going to put here the name of the bank so let's say for example this was chase who paid me interest and put them as a vendor and then on the deposit side let's say they paid me a dollar and 80 cents an interest and then under account i would actually have an interest income account uh and if i don't have an interest income account i should create it so i'll create an interest income account and categorize that as other income and then hit save and close at the same time i can have maybe the next day chase charged me a fee a wire transfer fee or something like that so let's say this is 25 and it's now gonna be on the payment side because that's money coming out of my bank and then i can categorize that as uh bank uh service charges and then on the memo if i want to i can put a wire fee right whatever okay so that's kind of how the check register works i'm trying to mimic or duplicate exactly what's happening in my in my bank transaction by transaction with my quickbooks register so i know um check and double check that um what's in my quickbooks register it's what's going to be on my bank and that's going to be the process of reconciling which we'll cover um in a second okay now let me also talk about other things let's say for example i wanted to enter a check i checked that i paid and that was paid let's say february 2nd so i can actually go back to february 2nd here and i will put a check number so let's say that's one zero zero one and that's really important um that the register will always try to add a number and because uh quickbooks calls everything check it calls debit card check wire transfer check you pretty much if money comes out of your bank quickbooks will call it check so because quickbooks will call everything check it's important not to use check numbers uh or any sort of number on a non-check transaction because it'll make you think that you're looking at a check and it'll confuse you quite a bit so you want to make sure that that number reference field is completely blank whenever you're dealing with debit cards electronic transactions and you only actually put a number there when you're dealing with uh checks themselves so let's say for example that check was to comcast and i'll create it as a vendor and let's say that's 180 and i'll put that under utilities whatever category that may be and then hit record so yes you can use it uh to write or to record checks that have already been paid now that being said let me let me uh minimize this real quick let's say for example i happen to be in the homepage and then i see a big button that says right check okay big wide button there saying right check or i go to the banking menu and i see right check okay or i can see a shortcut ctrl w i can also hit on my keyboard control w and i'll open up the check window and the reason why i say this is because we see the screen so often and writing a check in this screen is the equivalent it's the exact same thing as creating the check from the register window so i want to make sure that that's clear that a check being written from the register window and the check being written from the screen is the exact uh same thing let's say for example i'm paying my landlord and i'll write a check real quick um my landlord and they say that's uh 1500 and then i come down here and give it a category so that's kind of what the purpose of doing the check is from here so it just looks like a check now the difference between using this screen instead of using the the register screen is that from here i can actually uh print the check so i can go to print check so if i'm using uh quickbooks printable checks you know i should definitely use it from the right check screen instead of from the register screen but if i i'm writing checks by hand and i'm recording historical checks i can do one by one if i want to through here or i can do it through my check register so that being said let me open up my check register again and then we see that check entered here coming straight into the register now what about income from customers now so let's say for example i have a customer that paid me uh 1200 should i come in here and select the customer's name and put 1200 and then put some sort of income account here and this is how i should record my income so the short answer to that is maybe um if you are creating invoices you should never ever ever ever write any income straight into the register you should follow the workflow create the invoice receive the payment make the deposit otherwise you're gonna cost a huge mess quickbooks doesn't really automatically mark an invoice pay if i actually enter deposit straight into the register so you want to be very very careful about entering deposits straight in the register now if you got a refund uh that you pay with a debit card yeah do that through the register that makes sense uh if you get interest income like we booked here earlier that makes sense if you get rewards from your bank for whatever it makes sense to do that but not a customer payment customer payments should follow that entire uh workflow so that's really really important because that that's an area of confusion to a lot of first quickbooks users now let me make a an exception to the rule is if you're let's say an accountant entering back log you know 10 months 12 months two years worth of data and you're not really creating invoices in quickbooks or maybe you're a quickbooks user that just doesn't use invoices at all then that's fine now you can enter all your deposits as as income sales whatever that's fine just be careful if you're going to be using invoices you got to use the full workflow okay let me go ahead and hit record here and close it so one of the common questions we get at this point is okay so we wrote a check and we entered debit card transactions straight into the register what about bill payments so if you had a bill so i'll just create a bill real quick here then you're going to enter bills and let's say i have a bill from comcast and we'll make that comcast bill say 378 dollars and we'll go ahead and close and save that so if i happen to have a bill and i go into my register oops banking register if i go into my register that bill for 378 is not going to show up anywhere here why because that bill is creating an accounts payable something i'm going to pay in the future yes it's an expense but money is not coming out of my bank yet so if i go pay that bill some people what they do is they actually let's say they're going to pay with a check they'll go into let's say the home screen and they'll click on write check now the problem with that is when you actually start writing a check to comcast you're going to get a pop-up saying hey you shouldn't do this you know you shouldn't write a check because there's an open bill and doing this is going to potentially duplicate your accounts payable most quickbooks users say yeah yeah whatever and they hit okay and they just move forward and they create a mess so pay attention to that particular sign so that being said you can pay a bill that affects your register the way it's supposed to but you also need to mark that uh bill paid so to kill two person one stone mark the bill paid and also mark the payment coming out of the bank we use uh this icon here called bill payment i mean pay bills bill payment whatever but it's different than the right check feature because the right check feature is supposed to record an expense that i'm recording today that i know about it today and the money is coming out of my bank today and there's no time difference between the moment i know i have to pay it and the moment i actually paid it all happens simultaneously that's what right check is for even if i'm not actually writing and printing a check um like i mentioned earlier i'm doing a debit card transaction or electronic transaction of some sort however if i created this comcast build 10 days ago 20 days ago and then i'm paying it later i must follow that two-step process enter bill pay bill now when i go pay the bill right now it's gonna ask me which bank account should this bill be paid from and it could be from a uh or a quick again what quickbooks calls check or a credit card so if i'm paying with a bank whether i'm paying an ach an actual physical check an electronic transaction of some sort maybe with my debit card i will use that transaction type called check inside of that pay bills window so let's say for example i paid it online so i'm not going to print the check i'm going to click on assign check number again a little bit counter intuitive but i'm going to click assign check number and then hit pay selected bills and then when it's asking me for an actual check number i'll just put here online right online or ach or e for electronic or electronic or whatever right so that way i know that i use the pay bills feature uh quickbooks will make it look like a check because uh again quickbooks calls everything coming out of your bank check but this will follow the right process and mark the bill paid and also affect your register how it's supposed to and you certainly see that 378 right there affecting your bank now finally after you uh enter all the transactions in the register all your deposits are there all your checks are there all the expenditures are there you want to reconcile that's kind of like the last step so if to reconcile we go into banking and we click on reconcile and then we select the bank account that we're going to reconcile and then let's say we're physically looking at let's say the bank statement that ends on december i mean on february and then i actually have let's say the statement in front of me so i have the actual physical statement in front of me and let's say the ending balance of that month is nine five nine four point sixty eight let's say for example okay and then what you're supposed to do is take uh all of your deposits and all your expenditures that actually have cleared the bank and you basically mark them one by one and the exercise should be you know mark one in in uh in the paper mark one in quickbooks mark one in the paper mark one in quickbooks and just go back and forth until your difference uh is zero so once you are done marking them all on the paper and also marking them all on the on the uh on the on the screen here at that point you should be a difference of zeros and let's say for example i'm looking at my my bank statement and let's say i'm i'm short um you know whatever right 900 and 821 dollars and let's say for example i'm looking at my statement and i actually have a missing check for that amount so i just have to go back i don't have to do anything fancy here i just go into banking write check and i finish entering that missing transaction that happened to be in my books and let's say i paid microsoft 821 with 95 cents for let's say software for the office so i'm going to put that into office supplies for now so let's say for example that's it that was the missing transaction and it happened to be a check check 1003. so as i add any missing transactions that i may have and it looks like these two checks here in the top uh we're not in my bank statement so they can stay there that's fine because we are thinking that maybe in the next month in march or whatever those checks will clear now you have to be careful because those checks really shouldn't be there forever um you know there should be a point in time until those checks are no longer valid but that's a whole other issue which will deal in another lesson altogether but the point is that all my deposits and all my expenditures whether they're checks bill payments wire transfer ach electronic whatever happens to be those should all match my bank statement with my quickbooks and then finally once i'm 100 matching i should be at a difference of zero and then i'm going to click on reconcile now and that is that last step to just make sure that my quickbooks is complete that everything that happened through the bank it's in quickbooks and then i can click on display and look at the report so i got this summary report that shows my beginning balance my cleared balance total deposits and checks and then everything that didn't clear and then if i hit escape i would have the detail report right below that and it'll be the same report just with transaction level detail including those two transactions that didn't clear so this report becomes really really valuable to just uh check and double check uh what is it that we were um uh doing that it matches the bank and then the only thing that doesn't match the bank are the things that are outstanding that are hopefully going to happen on the next month so that's lesson seven the next lesson would be about basic reports section 8 introduction to financial reports if you're following with the quickbooks missing manual for example the 2016 missing manual this would be chapter 23 or at least chapter 23 is the one that has the most information about all sorts of reports including standard financial statements and all sorts of custom reports inside of quickbooks let's go into quickbooks here and let's talk about the different reports that we have so by default uh the report that most people look for at the end of any cycle or at the end of the week month day whatever is the profit and loss so that's going to be in the reports menu under company financial and then profit and loss standard so when you open the profit and loss you should be able to see all of the income and expenses related to that period and the period will be based on heroes as dates you can select periods like today or this week or this year or this month or last year etc or you can manually choose the date range that you want uh for that period so you're not stuck with the options are here although the options in the drop down are quite extensive now you can also click here where it says sort in the top right and then i can sort it by total and then maybe get all the expensive stuff uh to be in the top and then all the not so expensive lines all the way in the bottom so i can actually sort this by total or click on default and then it does the regular alphabetical ordering of the account so i like to the total descending order that way i kind of see the biggest expenses in the top so that's the profit and loss report that shows uh pretty much all the sales expenses um all broken down based on the accounts that are in your chart of accounts again your chart of accounts is on the list menu chart of accounts and those are the accounts that are here and just to provide some context here let me put these two screens next to each other so i'm going to click on the window menu and go to tile vertically so in your chart of accounts you're going to see all these accounts are carrying balances that have a basically a number or a balance next to them this is what you call balance sheet accounts and none of these balance sheet accounts will show up in my profit and loss report my profit and loss report is only going to contain income statement accounts or profit and loss accounts which are these income costs to goods sold expenses etc so whatever i have in my chart of accounts is the only thing that can show up in my profit and loss but moreover it's the actual transactions that we have used that are affecting those accounts that are going to show up because i actually have a lot more expense categories are not showing in this profit and loss and the reason for that is because they're not being used i mean you could actually click on customize report and then click on advance and force all of the accounts to show up by clicking on all rows and then hit ok and then okay and then you're going to get your full financial statement with all your income categories all your expense categories evens the ones that have no activity or zero so it'll be up to you whether you want to show that zero or hide it by default in quickbooks you don't have to do anything it only shows you the active accounts which are the ones that had activity inside of them and consequently the ones that would actually have some sort of balance to show up on the report so that's the profit and loss report based on those accounts now as i mentioned to you the first set of accounts that are carrying balances belong to the balance sheet so let me go ahead and close that profit and loss and pull up a balance sheet i'm going to click on reports company financial balance sheet standard and then i'll also put these next to each other so we can see here so notice that i got my chart of accounts here on the right side and i got one two three accounts with running balances this is about the same thing you're gonna see in your your balance sheet as as long as you got a balance in my running balance accounts something will show up in my balance sheet so if i were to create for example a new asset in my chart of accounts let's say i had a vehicle from last year that i forgot to put in the books and i'm going to go ahead and put it there i'll put it here to yoda truck and i'll put it with a beginning balance of some sort so let's say for example this was worth 28 000 and i'll put here the data the original date that it was purchased so let's say for example it was purchased the fourth of 2014 and um and i hit okay and then save and close and now you should notice that immediately you're gonna see a new asset show up in the balance sheet and that's the purpose of the balance sheet it's there to track what we own which are the assets what we owe which are the liabilities and uh the difference which is the equity so that so those are the two reports that we managed the most and yes i could put them next to each other i would just pull the balance sheet pull the profit and loss close everything else and tile vertically and i can actually see them one sitting next to each other now these two reports are linked on the net income so for example if you look at my profit and loss for the same period as my balance sheet we're going to see a running net income of 1960 loss here and you see that pass through the balance sheet so these two reports are attached at net income because that's the one thing that they have in common so technically the balance sheet is a more is a much more complete report that the profit and loss because it actually contains the summary result of the profit and loss together with a lot more information so i strongly um for reading the balance sheet or getting the balance sheet before the profit and loss typically you get a lot more information from it now most people are just pretty much obsessed with the profit and loss because that's what they understand because that's you know that basically represents uh the performance of the company we perform it represents how well sales where and how good we were in controlling costs and this is the stuff that goes on the tax return and your net income from your profit and loss is typically close to your taxable income so that's what most people are obsessed about looking at the profit and loss and they and they miss some pretty big opportunities on on the balance sheet because that gives you a lot better information now there's another financial report called the statement of cash flows which is in the company financial section as well and it's called statement of cash flows and i'll also put that i guess i'll put all three next to each other and you can actually see all the reports here and the statement of cash flow basically uh shows you if there's a difference between uh bank and um and the profit so if your bank and your profit have different numbers it will explain to you what the difference is like so for example if i were to create an invoice let's say for five thousand dollars i'll do that real quick and i'm gonna put here uh today's date and i'll pick whatever item and i'll put five thousand dollars what's going to end up happening is uh the profit from my profit and loss now it's gonna shoot up right now i have an extra five thousand dollars and maybe i have a positive number at the end when i look at my balance sheet and i and i refresh it now i see a new uh account called accounts receivable which is the account in which we track what customers owes us and then when we go to our statement of cash flows on the left side notice that these five thousand dollars are not cash in your pocket just letting you know that you know why is there a difference between uh the actual money in the bank and the actual profit showing in my uh profit and loss report now let me close the statement of cash flows real quick and rearrange these two screens because another really important topic to cover on financial reports is the concept of cash basis and accrual basis so you notice that i put that invoice for 5000 but i haven't received the payment yet and let's say also i'm going to put a bill from a vendor let's say from microsoft and there was a bill let's say for 3 500 and we're going to put this into maybe cost of goods sold of some sort and i also haven't paid that bill yet so i got my invoice for 5 000 and my bill my payable for 3 500. i noticed that now it's showing a net income of negative 460. let's do one more invoice here and i'll go ahead and create an invoice this time around i'm going to partially pay it because it's kind of interesting to see uh partial payments so i'm going to make this two thousand dollars and then i'm gonna go ahead and receive a partial payment for this invoice so you can kind of see how this whole cash basis accrual basis uh behaves so i'm gonna go ahead and receive uh let's say half of that one thousand dollars and i'll apply it to any of the invoices it really doesn't matter uh which one you do but just to be consistent let me do it to the two thousand dollar invoice by hitting the little checkbox to tell you what um what invoice i want to apply so here in my profit and loss report which says that it's an accrual basis report uh it shows me a profit of 1539 and it's showing me the full 5 000 from the invoice that i created the full 2000 from the other invoice and the full 3 500 from that bill that i haven't paid yet now the accrual basis report shows all income incoming expenses including what is outstanding balance sheet the same thing accrual basis will show me my accounts receivable and my accounts payable which is my open invoices the receivables and open bills the payables it will show me that because it's an accrual basis report the only way i can hide outstanding receivables and outstanding payables is to switch the reports by clicking on customize report top left click switching it from accrual to cash so cash is called the accounting method and basically the way cash works is it only includes received payments and made payments therefore if i got an open invoice or an open bill it won't include that and therefore is going to give me a different number altogether in my net income so notice that before if i would have gotten payments for both of those invoices and even paid that payable i would have been on positive 1500 but because i'm in cash basis it's negative 960. so i'm gonna switch it back to accrual just so you can see and now it's a positive number now you gotta be very careful that you're not looking at maybe an accrual basis profit and loss and a cash basis balance sheet because then these two net incomes are not gonna tie together really really important so if you're gonna look at them in cash look at them both in cash if you're gonna look at them in accrual you gotta look at both of them in accrual and most importantly you should always look at the profit and loss on the balance sheet together should look at them separately because one has half the information that the other one has and vice versa so those are the basic financial reports uh in uh in quickbooks now on uh the first lesson of day two we go into a custom report or at least in-depth uh report creation and a little bit of customization so i'll be able to dig a lot deeper into the analysis of reports but for now this lesson is all about just introduction to reports and that's it you watched the entire four hour video let me give you a round of applause i really really hope that you drew tons of value from this quickbooks desktop basics course go in the description and check out the links for the full training programs that we have especially the manufacturing inventory wholesaler series because that's the flagship course that i teach so if you want to get deeper into that if you want to learn way beyond what you learned today go ahead and check out this course make sure you hit a like go to the comments subscribe to the channel if you found value from this video thank you and i'll see you on the next one

Channel: Hector Garcia CPA

Views: 455,324

Keywords: quickbooks lesson 1, introduction to quickbooks, quickbooks basics, quickbooks desktop, quickbooks desktop review, quickbooks tutorial, quickbooks for beginners, quickbooks desktop tutorial, quickbooks course, quickbooks, quickbooks desktop course, quickbooks desktop basics, quickbooks desktop lesson, quickbooks desktop training, quickbooks training, quickbooks pro, quickbooks premier, quickbooks desktop 2022, learn quickbooks, free quickbooks tutorial, how to use quickbooks

Id: DiViSlmyHBM

Length: 226min 1sec (13561 seconds)

Published: Fri Jan 14 2022