QuickBooks Online 2021 #6 Bank Feeds | Robert Steele | Skillshare

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QuickBooks Online 2021 #6 Bank Feeds

teacher avatar Robert Steele

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

30 Lessons (7h 38m)
    • 1. Introduction

      1:03
    • 2. 305 Free QuickBooks Bank Feed Practice File

      9:20
    • 3. 315 How do Bank Feeds Fit Into My Accounting System

      14:47
    • 4. 320 How To Setup Bank Feeds

      8:49
    • 5. 360 Download Transactions From Bank

      8:43
    • 6. 364 Import Bank Transactions Into QuickBooks

      7:52
    • 7. 365 Bank Feed Center Navigation

      21:18
    • 8. 370 Add Normal Expenses To Books From Bank Feed Limbo

      26:18
    • 9. 375 Enter Transaction Purchasing Equipment Using Bank Feeds

      12:16
    • 10. 380 Enter Transaction Purchasing Inventory Using Bank Feeds

      23:46
    • 11. 385 Enter Transaction Purchasing Investments Using Bank Feeds

      17:18
    • 12. 390 Enter Transaction For Owner Withdrawal or Personal Payment Using Bank Feeds

      20:22
    • 13. 395 Enter Transaction for Income Deposit For Online Cash Basis Business

      33:16
    • 14. 400 Enter Transaction for Owner Deposit or Loan Deposit Using Bank Feeds

      13:47
    • 15. 403 Enter Transaction for Payroll Using Bank Feeds

      22:49
    • 16. 405 Sales Tax & Bank Feed Overview

      25:29
    • 17. 440 Bank Feeds Matching Invoice to Deposit

      15:47
    • 18. 445 Bank Feeds Matching Receive Payment Form to Deposit

      14:52
    • 19. 446 Bank Feeds Matching Deposit From Customer

      17:05
    • 20. 449 Bank Feeds Matching Sales Receipt

      14:46
    • 21. 460 Bank Feeds Credit Card Data Setup

      10:32
    • 22. 465 Credit Card Bank Feed Add Data

      13:05
    • 23. 475 Credit Card Reconciliation After First Month

      13:46
    • 24. 480 Credit Card Reconciliation Second Month Credit Card Reconciliation Second Month

      5:22
    • 25. 540 Bank Rules – Same Customer Different Income Accounts

      16:11
    • 26. 550 Bank Rules – Same Vendor Filter by Amount

      10:44
    • 27. 560 Bank Rules Split Into Two Accounts

      9:29
    • 28. 580 Bank Feeds Add Remaining Transactions & Bank Rules

      18:21
    • 29. 590 Bank Reconciliation Bank Feeds First Month

      21:01
    • 30. 592 Bank Reconciliation Bank Feeds Second Month

      9:36
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About This Class

Project based course focusing on the use of bank feeds with QuickBooks Online

We will discuss how to set up bank feeds, import transactions from the bank, and add the transactions to the accounting system to create the financial statements

If you do not have QuickBooks Online, you may be able to get access to a free 30-day trial version. Try typing into your favorite browser “QuickBooks Online Free Trial”.

Here is a link that may work: https://quickbooks.intuit.com/online/

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Business Accounting

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Transcripts

1. Introduction: Quickbooks Online 2021, number 6, a bank feeds is a project based course to focus in on the bank feeds use within QuickBooks Online, the bank feeds helping us to connect directly to the bank or financial institutions, get transactions directly from the financial institutions into the QuickBooks system. And then we'll take those transactions and add them to the system so that they can be used to compile our financial statements. If you do not have access to QuickBooks Online or you have access to a company file and you want to have a practice file or something like that to work with and test out, might be able to get a trial version. You can take a look and type into your favorite browser, QuickBooks online, free trial, or you may be able to CO2 a link here to look into that option in more detail after we enter the transactions in our practice problems, we will be generating financial statements, financial reports including the balance sheet and the income statement, which will be our final project. 2. 305 Free QuickBooks Bank Feed Practice File: Quickbooks Online 2021, free QuickBooks, bank feed practice file. Let's get into it with Intuit QuickBooks Online 2021. Now, here we are on the Intuit webpage into it being the owner of QuickBooks, That's INT at IIT.com, I and T at IIT.com, we're going to be looking for the free 30-day test drive so we can test out the bank fees. This is what I would recommend doing is testing out the bank feeds, practicing the functionality of it along with us. And then think about purchasing QuickBooks if you so choose when you do so then possibly talking to your accounting firm, your CPA firm to see if you can get the best deal in the process of purchasing the software. So I'm going to go up top. We're going to go into the QuickBooks up top. And then we're looking for QuickBooks Online versus the desktop version. I usually go all the way down to the bottom of the page so I can be specific in terms of the salts where I'm looking for. We have the products on the bottom. First one typically will be the online software. So we're gonna go to the QuickBooks Online. Now we are specifically in the Intuit page in the QuickBooks online information. Then I'm gonna go down. It says there's a there's a free 30 day trial. That's what I want. It's kinda tricky though because you have to hit this little thing here and say, Mom, I want this on this side to have the free 30 day trial, which is scary because then the price jumps up down below, you'll see because it's either the free 30 day trial or they give you like the discounted first couple of month period. But you might want to have a situation where you would test it out with a free 30 day trial and then possibly talk to your accounting firm or something that may be able to give you a discount in and of itself. You might want to check that out before you do this, but that's what I'm recommending here. So I'm going to say no thanks. On this side, I'm going to make sure to put the toggle to the right. We want to take a look at the QuickBooks plus so that we can take a look at the bank feeds for it. So then we're gonna go up top and say this is the one we want. Let's select it. So we'll select that item. So then we have your plan and then it's free. It doesn't have the discount. So it looks good. Go and for their tacking on the payroll to be included in the free kind of section. We're not going to be focused in on payroll here, but if it's included with the test drive file here, we'll give it a go in with a test drive. So I'm going to check it out. I don't believe you need to provide them with a credit card or anything to push forward with it, then if you have an account, you can log into the account here that it's going to be asking us for information about the company. We're going to say it's a bank feed test file. That's going to be our company name. And then the industry. I would like to have, like basically no industry right now because I want to have as blank or basic a chart of accounts as possible. But I'm going to choose an industry. I'm gonna say I'm gonna include department store just so I have the option of the inventory items, but we're going to change the Chart of Accounts and whatnot when we get into the company file. So we'll probably adjust it. So it might not be as important to have the industry at this point. So I'm going to say next. What would you like to do in QuickBooks? I'm just going to check them all off. I think this is more for informational purposes for QuickBooks so we can adjust the settings once we're in QuickBooks. So I'm going to go ahead and say Next on that item. And then what's your role? So we're going to be the bookkeeper, accountant, employee, owner. I'm going to pretend basically the word the owner in this case. Do you have an accountant or bookkeeper right now? Yes. Someone helps me know, but I would like help. No. I do it all myself. I'm just gonna say do it myself. Great. We'll be with you every step of the way. And that's reassuring. What kind of business is this? Tell us about your business structure. We use this to help organize your transactions. So we're gonna say we're a sole proprietorship. Now, again, this is like the business entity, that type of entity you have sole proprietorship means basically you're the sole owner of it, most likely you then finally in on your tax return I schedule C that's attached to your form 1040. Whereas if you're a partnership, then you have two people or more that have an equity interest in the business. If you're filing your tax return, you typically have to file a separate tax return, a 1065, which GIN has K1s that flows into your tax return. It's a little bit more confusing than the equity section on the partnership return because you have to track equity accounts. Corporation, you're incorporated in that case, then you might have multiple owners and the owners are represented by share. Shares. You might be an S corporation, for example, if you're a smaller company, not-for-profit organization or I'm not sure we're gonna go with the sole proprietorship here. Continuing on, how does your business make money? We tailor our accounting categories based on your answer. I sell products, I provide services, something else I'm gonna say primarily services, but again, this is for informational purposes for QuickBooks. So, and we might deal with some kinda questions about selling inventory and products as we go as well. How do you want to track income and expenses linked your bank and credit card accounts is the best way to stay organized. Your transactions. Update regularly to keep your books up to date automatically with linked accounts or manually. So it's, it's here we have the linked account items. I'm going to say linked accounts, but then it's going to take us to the bank feeds automatically. And I don't want to injure the bank feeds yet. I just want to set up the accounts here. So I'm going to close this out at this point in time and then we'll get into setting up the bank feeds at a later point. You don't have to set them up right when you when you started it in here. So tracks spending with less work Lincoln to an account makes it easier. So I'm going to skip this. And here we have our bank feeds test file. So now we can, we can use this test file to kind of practice with. And then once again, if you want to use this file for your actual bank feeds, you can push forward with that. But it might be worthwhile to kinda test it out so that you can use different functionality with the bank feeds without messing up your actual data. So well then we're gonna go down and what has been set up here. We know that down below in the accounting section, they gave us our chart of accounts down here. So I'm gonna go to the chart of accounts tab up top. I want to see the chart of accounts. I'm going to select this item. These are the accounts they automatically setup and this is basically based on the industry that we set up. Now what I'd like to do is for this practice problem, clean this whole thing out, make it a clean slate, and basically build our, our financials from the bank feed data that we have. If depending on the industry that you're in, you may want to keep this chart of account up top and what not. And then in the practice, putting your information to line up to the chart of accounts. But you can also basically customize it because if you have a completely different kind of industry that doesn't line up exactly with what they're provided. Maybe you do gig work or something like that. That'll be some of what we have. Then you might just want to make your own, your own chart of accounts here it might be easier in some cases. So what I'm gonna do is delete this and practice just making the entire chart of accounts as we go. So I'm going to make all this stuff basically inactive or you're sure to want to make it inactive, I'm going to say yes, make it inactive now we might reactivate some stuff as we, as we enter the data. So if we use some of these accounts, but I'm going to make them all inactive to start with. So I'm gonna make it inactive. Yes. Okay. And then I'm going to make it inactive or issue you want to I'm going to say yes, you can't delete this account as part of an online bank feeds. So that's uncategorized. So I'm going to say, All right, that's fine. And then this one, I'm going to make it inactive. So a couple of them that won't make us basically allow us to do an inactive because they're part of the QuickBooks kinda default system. So we'll keep those around. So I'm going to make all of these inactive here. And so I'll just keep going on with this process. I'm going to make everything inactive that I can't. So I'm going to continue on with this. So I've basically made everything in active than I can with what we have left then is inventory on categorize assets and deposited funds. Some of these are required for QuickBooks. The way the QuickBooks kind of system runs on deposit phones, owner's investment, owner pay and personal expenses. These are the equity accounts, retained earnings, which we might change the name to like owner's equity for a sole proprietorship or something like that. Sales, this is their primary sales account. So again, we might change the name to some other name if we want to call it revenue or income or some other kind of income, uncategorized income and uncategorized expenses. These are default accounts that if QuickBooks has to force a journal entry to stay in balance, then these are the accounts they use. They won't let you then remove those accounts. So I'm going to change this retained earnings. This is where the net income we'll roll into. I'm just going to call that owner's equity since we're sole proprietorship. So I'll typically just changed that and let's just call this owner's equity. So I'm going to say, Oh, nurse equity, equity. So that's going to be our primary equity account for a sole proprietorship, if you're a partnership than you might have multiple capital accounts. I would call them personally capital accounts for partner a, B, C, and D, and so on. And then if it's a corporation, then retained earnings would be appropriate. So I'm going to save that. And there's basically our starting point, this. So we've got a nice clean slate in terms of our accounts in QuickBooks that we can then go ahead and practice with pushing forward. 3. 315 How do Bank Feeds Fit Into My Accounting System: Quickbooks Online 2021. Now, how do bank feeds fit into my accounting system? Let's get into it with Intuit, QuickBooks Online 2021. Here we are in our QuickBooks online bank feed test file. Before we set up the bank feeds, we want to consider what the role of the bank feeds will be in our accounting system. This being a very important step because the bank feeds will play a different role depending on the type of accounting system we have in place. This can be counter-intuitive when we think about bank feeds over here. Bank feeds talked about, or even QuickBooks in general talked about the name of QuickBooks would indicate the QuickBooks are going to make the bookkeeping very quick. And then of course, the bank feeds are supposed to be set up in our advertised as if you kinda just connect to the bank that'll feed everything into the QuickBooks system and that will just generate your reports automatically. That's not necessarily the case. It's going to take some work to set up the bank feeds, especially for the first bank fees that you're going to be setting up. Meaning, how far back do you need the data to be entered into the bank feeds? And then even from that point forward, it depends on what type of bookkeeping system you will have as to what role the bank feeds will take. You want to carefully consider this before connecting the bank feeds so that you know this from the start. If you don't do that, what will happen is you may just enter a whole bunch of data from the bank into the system, but not know how to properly allocate it. And you could be quite overwhelmed if that's the case. So you want to have a basic idea of what your accounting system is going to be, then how the bank feeds fit into it, then connect to the bank feeds and figure out where your starting point will be, where it's going to be the baseline point. Meaning, what date are you going to need to start entering data into the bank or from the bank into the system. And then how is that data going to act within your accounting system? To consider this further, let's go on to the QuickBooks Desktop version. You don't need the desktop version to follow along with the desktop version has this flowchart. So we just want to consider the flow chart because that's our accounting cycle. And then we want to consider how bank feeds might fit into our accounting cycle for different types of companies that we may have. When you're thinking about bank feeds in general, you're thinking about data from the bank flowing into your QuickBooks system. You're basically thinking about a bank statement. That's what the bank has. They basically have a bank statement which basically has your your cash transactions, of course. And that would include deposits increase to your checking account, and then checks or withdrawals. Those might be electronic, or they might be cached deposits, or they might be checks that are coming out, or there may be electronic transfers out of the bank account. But in essence, that's all the bank has. They have the bank increases, they have the decreases. Obviously, cash is involved in every cycle that we have in our accounting system, not every financial transaction involves cash. If we're on, if we have like an accrual system of some way or shape or form. But cash is going to be involved in every cycle, like the purchasing cycle, the sales cycle of the employee or payroll cycle. And therefore, if we can get the cash right, then we have things go in. That's pretty big. Component caches like the lifeblood of the company it's involved in, in every cycle that we have with regards to the accounting system. So let's go into our flowchart over here and let's consider the system that would be most easy to rely entirely on or as much as possible on the bank feeds. And then we'll add levels of complexity as we go through this thought process. So what would be the easiest business to use to just basically try to rely on bank fees to be as close to what would probably be advertised as being feats as possible, meaning connect to the bank, added to QuickBooks, and then it just magically make sure financial statements for you as you connect to the bank, What would be closest to that scenario as possible? It would be closest to that scenario if we had not only a cash-basis system, but we were dependent on the bank, meaning we're not using the bank as a double-check to our accounting system, but rather we're taking the information from the bank in order to create our books. So we're completely dependent on the bank under that system. And that system might work well if we have something like gig work or something like that. So if we do especially service type of business and we do it through say, an online provider and we get paid from say, an, an app store or something like that. Say we have Amazon sales for book sales or something like that, or audio book sales. Or we have YouTube revenue, or we have course revenue, and we're just getting revenue. We're just getting revenue that's coming from like an app that is coming to us directly. And when we get the revenue, we're just going to call it income. So any revenue that we have, we're basically going to call it income. And then all the expenses that we have, we're on a cash basis. And most of all, if most of our expenses, especially our electronic transfers that we paid directly out of the checking account. Then those will be fairly quickly transferring through the bank. And that would be kind of the easiest system to use. So in that case, in terms of the cycle for the revenue cycle, for example, we wouldn't be using any any invoice because we're not invoicing anyone would just waiting to get the money from these big gig work, right? We don't need the bill, anyone in that case or invoice. We don't have the create sales receipt even which would be a cash basis. Financial transaction because we're not going to collect cash and then go to the bank and have to give a receipt. We don't need to give a receipt to anybody or anything like that. We're just going to wait till the revenue clears the bank and then we're not even going to record the deposit, right? We're going to let the bank deposit come into our account and then record the deposit. That would be the easiest type of system that we have. And then basically if you're looking at your bank statement, then everything that comes into our account, that's a deposit, we will in essence record as revenue. So then we can just say everything that's at deposit will the revenue for us. Unless it's something unusual such as us, the owner putting money into the company. We gotta make sure that if we put money into the company, then it's going to be an investment. But otherwise, everything that goes into the company as a deposit unless it's from us or unless it's going to be alone. So that's pretty straightforward. If it's an electronic transfer coming from something like a YouTube or something like Amazon or audio, audible books or something like that. Then they'll probably have the description of who gave it to you in the electronic transfer. And we can even add a vendor as we add that information into it as well. So we can just build our books based on the bank feeds in that case. And then on the expense side of things, if we try to make all of our transactions, basically electronic transfers, then once again, we might just wait until the transactions clear the bank. Once they clear the bank, then we record them from the bank feeds. And if they're electronic transfers, we may even have the vendor information. The vendor information helping us to then assign the correct account like a utility expense, the phone expense and whatnot, and possibly make a vendor so that deposits we need customers. And then on the, on the decreases we'd have vendors. So that would be the easiest trend, the easiest kind of system to use, which is we're just building our books on the bank. We're not only on a cash basis system, we're basically dependent on the bank, meaning, and that means when the deposits come in, we're just going to take them from the bank feeds and record basically deposits at that point. And we're not going to be dealing with accounts receivable, we're not going to be dealing with accounts payable. We're just going to basically record our expenses when we pay them. And that would be basically the easiest system to use that. And under that system, then the bank reconciliation is still necessary, but not as important. I mean, not as, as doesn't have as much effect in terms of your internal controls. Because you're not double-checking anything. You're just basically checking or making sure that you haven't double input anything or that you missed something in terms of on the bank feed on your book. So we'll take a look at that as we go forward. Then if we add a level of complexity, you might say, well what if I'm in a, in a system where basically I make sales during the day. Say you're a restaurant or something like that and you make cash sales. And basically you use this form to create sales receipts. Basically, you imagine you're out of register or something like that. People pay you during the day you provide the food truck service or something like that. At the same point in time, you're still kind of on a cash basis with regards to the revenue cycle because you're receiving money at the same point you're doing work. But if you're recording a sales receipt here into the system, that sales receipts going to be increasing. The, the basically cashed that you're going to receive. And the other side's gonna go to sales at the point you made the sale, not the point in time that hit the bank, not the point in time that it cleared the bank. You might have cash sales that are happening here. And if you have cash sales, you're going to want to be collecting the cash and make sure that it ties out to your sales receipts that you have is kind of one of your checks that everything is doing going properly and then you're probably going to want to put this money into and deposited funds and then walk over to the bank and deposit it into the bank, grouping all of your cash transactions together into the bank and putting it into the bank at one lump sum. What will then appear on the bank statement then under that system will be one lump-sum cash basis. It'll just be cash. So you won't have any other kind of customer information related to it. It'll just be basically a cached. It cleared the bank, and you'll have to reconcile what we put on our books then under that system to what is on the bank. So under that system you'd still be on a cash basis, but you wouldn't be reliant on the bank. You would be recording the transactions as they happened. When you record the transactions here, you would be recording the customer information and the sales information. And then you would take that information deposited into the bank, which means it will then increase your checking account in one lump sum. And then when you have the bank feeds that come through, when this deposit comes to run the bank feed, you're no longer dependent on the bank feet to record the deposit and revenue. But rather you're basically using the bank feed as kind of like a check to help you out with your bank reconciliation process. You're double-checking that the bank system is the same as what you record it in your system. In that is a better internal control because that gives you an internal control to kinda check two different accounting systems. The bank recorded one thing, you recorded one thing they are the same. You recorded them differently. You didn't record your thing based on the bank. You recorded it independent from the bank. And the two things tie out. Therefore, you have kind of at double-check, That's what the bank reconciliation process will be. The bank feed in that case serves a different purpose. It's still important. But it will be like a reconciliation. Now you might think, well, why don't I just under that system, if I collected cash, why don't we just wait and then deposit the cash into the bank and then wait till it clears the bank and then record the revenue. Once it clears the bank, you can't do that. But then you lose a couple of internal controls. You lose the internal control of checking your sales receipts to the cash deposits, and then the internal control of checking your deposit to the bank deposits. And if you just record, say this deposit here. And it consisted of a bunch of different customers that put money in. You won't know who the customers will. You won't be able to track it by customer. It'll just be a deposit. You just have no customer information for it, which might be fine. You might not need the customer information. But that's just the pros and cons of using that system. So you lose some internal control. You, you, you lose some ability to sort your revenue by customer and have the customer information. If you go to that system and you're like a food truck type of system or something like that. And then if you add another level of complexity, at least on the revenue side, you might say, well what if I'm in a system where I have to build a client like a bookkeeper or lawyer or a landscape or something like that where I do the work. Possibly I count my hours that I used when I did the work, or I bill in some other way or I count the hours of my employees and then periodically I send an invoice out the invoice then increase in accounts receivable, the other side go into revenue and I have to then track the payments to make sure that they pay me at some later time. Then I would receive the payment and then I would record the deposit. Will in that case, now you're on an accrual system because you're using accounts receivable under that case. So accounts receivable, this transaction right here when people owe you money, has nothing to do with cash. And then you're gonna get cash at a later point in time. So under that system, because you need to track who owes you that money if you're using accounts receivable and need to track who owes you the money, then bank fees are going to take another role. You're going to have to say, I want to create the sales receipts. And then you're going to have to record the receive payment in some way. Now you could wait until the received payment maybe clears the bank or something. But you're probably going to want to record the fact that you receive the payment from the customer and then possibly make the deposit. And then once again, use the bank feeds to kind of verify and double-check that what you record it on your side matches to what the bank feeds have, meaning you're not using the bank feeds once again under that system to create the books, but rather to double-check the books. You're, you're using it basically to help you with the reconciliation process, to help you with the bank reconciliation. So those are those are kind of a you could do the same thing on the payable side. But the payable side, like if you're using accounts payable, like you're entering the bills, accounts payable goes up. Then once again, you're doing an accrual type of transaction here. So when you're using an accrual type of transaction, the bank feeds are going to, it's going to complicate things. You're not just building your books based on the bank feeds. So you've got to think, okay, what kind of business do I have? Do I have like gig work or something like that where I can just rely on the bank, wait till everything clears the bank and make my books from the banks? Or do I have a system where I have to record the sales receipt and I want that internal control or do I have a system where I need to actually invoice the customers? And also the next thing that could complicate things if you go to an inventory item, inventory obviously, if you're tracking inventory within the QuickBooks system will add another level of complexity as well. Because inventory, but in its nature isn't a cruel thing again. And you're gonna have to track the inventory and record the inventory. So that's kind of complicated. You know, building your books just from the bank statement once again. So we'll think about these kind of things as we go through the bank feed process will set up the bank faith and consider different options built in our bank feeds just from the bank statement and then consider, well, what if we had a create sales receipt and then we're double-checking and matching or what if we're doing a full accrual surface process? Have the bank feeds fit into that system. 4. 320 How To Setup Bank Feeds: Quickbooks Online 2021, how to set up bank feeds? Let's get into it with Intuit QuickBooks Online 2021. Here we are in our QuickBooks online bank feed test file. We're going to be thinking about the process of setting up the bank feeds and, or getting the information from our bank into the accounting system, directly from the bank into the accounting systems. We have a couple of things that we want to keep in mind as we do. So one is going to be how much data do I need? Do I need a lot of data that's going far back in time into the accounting system. Can we get that much information to the bank? Is there some kind of limit as far as how far back I can get the bank feed information from what is going to be the starting point that we need in our system. If we already have data in our QuickBooks system, we want to make sure that we're not duplicating the data. So what's going to be the cut-off date that we need, the information that's going to go into our system and then push forward from that point in time. Now the actual setup of the bank faith is usually pretty straightforward, just connecting to the bank, that's going to be an easier and easier process. Many institutions, most large banks will have the process setup fairly easily. They might be different a little bit in terms of the verification process. But most large institutions and even smaller institutions that are banking institutions have the ability setup the bank feeds and you can kind of figure out how to set it up pretty quickly. That's not usually the challenge. The challenge is going to be how to get that first information to be set up correctly. And then once it's all set up, it should be fairly straight forward, going forward. So under the transactions tab, that's where you have the banking information. So we've got the banking information up top. We have the Connect account it down below, or we can upload transactions. Uploading transactions can be useful, especially when you're first doing the connection process. Especially if the bank doesn't have to say as far back of the data that you need. Meaning, for example, if you need all the information for like 2020 and you're trying to create your entire books. And at one time so you can do your taxes for example, or something like that. And the bank is saying, hey, look, I can only give you so much data, goes so far back in time with a direct connect to the bank, then you might want to download information from the bank and see if you can get a longer portion of the time, upload it then here. Once you have that uploaded, then then maybe go from forward from there, connecting directly to the bank. And then you can push forward from that time. Whether you connect to the bank or you have the transactions uploaded meeting, you download them from the bank and then you upload them into the QuickBooks system. You will basically be at the same starting point once the data is in the QuickBooks system, meaning the data will not automatically go directly into the financial statements. You will not be built in the financial statements from the data, least not for the first few months. You will then have the information that's kinda what I would call Bank fetal limbo. And you're gonna have to go in there and then kinda figure out where those bank feed transactions should go. As you do that, then it's going to be easier and easier. The QuickBooks system will memorize transactions and it'll be easier to go. So those are going to be basically are two options. But let's first think about logistically what's going to happen when we set up this to the bank. And you could think down here for to do that. Let's go to the accounting tab down below. We want to be in the chart of accounts. I'm in the accounting tab, the chart of accounts. Now obviously when we set up the bank feeds, they're going to be feeding into our bookkeeping system and ultimately, where do we want them to go? Usually if we're talking about the checking accounts, then into some kind of checking account up top. So we're gonna have another account up top which will be basically cash accounts, checking accounts that will be up top. Usually, you could start the bank feats here. For example, I could set up a new account up top. I'm not going to finish this, but it could be a bank type of account. And the bank type of accounts or the type of accounts that you could then basically connect to the bank feeds. Or you can go instead to the transactions and set up the bank feeds and possibly the accounts as you go. But at the end of the day, you're going to have an account here, which is going to be a checking account that's connected to the bank. Also note, you can't do the bank feeds for other financial institution type of accounts, for example, credit card type of accounts, credit card type of accounts, or through financial institutions. So although their liability accounts, you can do a similar process. So it's a similar kind of process. It can be a little confusing at first because the credit cards do you know this liability account. But the idea is going to be the same thing. You're going to connect directly to the credit card, the information from the banking side of things, the financial institution will then flow into your system. Then we will have to take it out of what I would call Bank fatal limbo and then assign it out so we could use the bank feeds once again for either the banking side of things or the credit card side of things because they're the financial institution type of accounts to do so, however, we have to set up our account type as basically a type of accounts. So if it's a cash account, we can't set it up as an other current asset account. We have to set it up as a BankAccount because those are the ones that have the bank feet functionality. We have credit card accounts. We can't set them up as other current liability accounts, but rather as credit card type of accounts because those are the ones that have the bank fee capability. So let's go back up to the transactions up top. And then again, connecting to the bank is usually going to be a fairly straightforward process. Now we're not actually gonna go through the full connection here, but I'll go, I'll start the process here because again, the connection usually isn't the problem, usually not that difficult part of the bank feeds. It's once you've got the data in the system and then you're kind of overwhelmed with data and how you're going to integrate that into your system. That's kind of a confusing part. So we'll just take a look at the connection here. And then when we actually do the upload, we're going to actually also go to the bank or imagining we're go into the bank, download the transactions and then upload them. So we'll actually upload the data using this feature. That's what we will demonstrate here, so that we can practice that process as well. Again, in practice, you may be in that situation. For example, if you're trying to reconstruct an entire year's worth of data or multiple years with a data at 1. Because again, you could be limited in terms of how far back in time you could go with the direct connection. So you want to know what that cutoff date is. How much data do you need to be importing into the system. So I'm going to just practice this Connect account. We're not going to finish through the Connect account process here. But if I go into the connected count, we've got the major institution. So like I say, most of the major institutions will be up top and be fairly straightforward to go through. If they're not down below, then you can go to the Search. And so you can, you can search for other institutions. You've got the credit card institutions up top of course. And like I say, even, even a lot of the smaller banks are, are, are getting better at this. If you have problems with it, you can contact the bank in the institutions and larger institutions could have whole departments that are basically dedicated towards working with issues with QuickBooks at this point. So it's pretty, pretty nice. So let's just pick one here and also know that they do have the PayPal now in in the system which if you're doing online kind of transactions or gig work or something like that is really nice. So I'm going to go to chase, we're going to assume it's a Chase account and then sign in to the account. Start by connecting your Chase account with Intuit. The makers of QuickBooks Online Edition go to the bank site to sign in and connect your accounts. Then we'll return here and bring in your transactions. So they want you to actually go to chase than if you had the online banking. Obviously you have to enter the online banking into the system to give the credentials to the system, and then come back here and continue this verification process with the bank. And QuickBooks may differ from, from bank to bank, but obviously you need some, you need the verification process. You need to go through the verification process. If you have problems with the verification process, like I say, most institutions are quite familiar with this, especially the larger ones at least. And you can actually contact the bank and they can kind of help you to walk through it and connect it out. So that's basically as far as I'm going to go with this. Because we're then gonna go through the second step here or the second option, and imagine that we're going to be downloading the data. So we're gonna go through the process of downloading the data from the financial institution, which again, we might do if we need a whole lot of data, like a full year's worth of data when we first start. And then we'll upload it to the system. Once we upload it to the system, will basically be at the same point whether you do either of these options. Once the data has come in from the system into QuickBooks, you'll be at basically the same point, will be at bank fetal limbo. And that's when the difficult part starts. That's when we have to go through the data that we have compiled and then allocate it out into the system so that it will then be used to make the financial statements in a way that's going to be as efficient as possible. So we'll start that next time. 5. 360 Download Transactions From Bank: Quickbooks Online 2021, download transactions from the bank. Let's get into it within two. It's QuickBooks Online, 2020, one. Here we are in our QuickBooks Online big feed test file. In the prior presentation, we've talked about options to Lincoln or getting information from the bank into our QuickBooks system. One method go into the transactions on the left-hand side, we're in the baking tab up top, we have our options down below of connecting directly to the bank or uploading the transactions. Now we're gonna go through the uploading the transactions process here. Either method, once the information is into the QuickBooks system, basically be at the same point in time. At that point, meaning we'll have transactions that are in what I would call Bank fetal limbo. And then we're gonna have to add them to the QuickBooks system so that can actually be used to populate our financial statements, the balance sheet and the income statement. Remember, there are other reasons why you would want to have the upload transactions here when you first enter the data. Those may include that fact that you might have more transactions and you might have more control over the transactions that you will be entering for that first time that you enter the data. So if you want to enter a whole year's worth of data or something like that, you may be able to do so more easily by going to the bank and downloading the transactions and then uploading them in this format. And then possibly after having first set up, then go into the connect bank feeds and moving on from that point forward. But the bottom line is will be, will be at the same point. Once we get the data into the system in the difficult part then is to take that information that's in the system and then practice putting it into the format that it can then be used to make our financial statements with or to verify our financial statements that have already been put in place. So let's go back on over and just go through the steps with a particular bank to get the transactions that we can then download. So this is going to be fourthly Wells Fargo institution, but just note that any large institution and it large bank, we'll have a similar process. You've got to find out whatever their website looks like and go through a similar process such as this. So for example, if you look at Wells Fargo and you were to go to transactions under the managed accounts area, There's something called download account activity. You should be able to find a similar kind of thing in any type of large banking system. Obviously, you do need some kind of online banking in order to be able to get the information from your bank in an online system. And then you're going to have some selections. Now this will differ from institution to institution, but most institutions now have this selection of having the QuickBooks option here to download your information. So it's really nice if you're at a bank that gives you a range so that you can determine the range that you want to download. So I would download a couple months so that you can practice your own data. I don't, we're not going to be practicing the same data with this practice problem because I think it would be best to take your own data and kinda do the similar kind of process with our data here. And that way, you can practice doing it yourself with your own data and use the techniques that we'll be doing in our data. So we've got 720, 1, 2020 to 2019, 2020, we're just taking a few months of data so that we can then upload it and practice basically building our financial statements from scratch from there. If you were starting a new company or transferring your data from another company, then you'd want to thinking about what's the date range that you want? How far back do you want to go in time to pick up the data? For example, if you're going back for a whole years of data so that you could basically you do your taxes then you were thinking about a 40 years of data you're probably focusing in on if you are sole proprietorship trying to get the income statement part of the thing? Correct. Because that's what's going to be filed in terms of like a Schedule C type of type of format. If you have more data that goes beyond that, then you need to decide how much data do you want in your current QuickBooks system. If you're setting up a new QuickBooks file, for example, then you want to decide where do I want the cutoff to be? And usually it would be like at the end of at the beginning of the year, if you good if your calendar, your company, you'd like to start at one particular year in January. If you have to enter a few months of data to get there, that might be good because it would be good to have a full years of data in one system, everything before January, for example. You might then say that's in the prior accounting system. And all I'm gonna do is enter the beginning balances in QuickBooks and then start from January on out for the current tax year. So those are a couple of thoughts just for entering the data. Now, other formats that most banking institutions have this is quick in, don't get quick and mixed up with QuickBooks. Quicken is another salts were owned by Intuit. But it's for like personal finances more than like the business finances. It's got different specialties in it. We're looking for the QuickBooks. So this is going to be data files that are in a format specific to QuickBooks, which will make it as easy as possible to then take that data, which is basically just the bank feed data and transfer it into QuickBooks. Now, if you don't have that format, you can do a QuickBooks I, F, or the common delaminated. This is basically a spreadsheet kinda like a CSV type of file. You can open this type of file in Excel. And that could actually be a useful technique because you can actually open up this type of file. In Excel and basically modify it if you need to. And that can help you to format the data before you enter it into the system. However, the intron from this type of file, like a CSV file, which you can change with Excel. You can save Excel to a CSV file is not quite as easy to just upload into the system as the QuickBooks file. So this QuickBooks file up here, you can't really modify it once we download it, we can't really modify it as easily as of course, a spreadsheet type of file. But we should be able to take this data that we downloaded and uploaded pretty easily. It should be that most straightforward process to upload it directly into the QuickBooks software. Now, obviously once we do this, note that we're, we're basically just looking at banking information. So if you look at your bank statement, and this is basically a bank statement, you just got the raw data that's gonna go into the system. It will be looking like a bank statement. You can just imagine all of this in a spreadsheet, which is one line item of information that deposits being formatted in the format of a deposit possibly with positive numbers and the checks being in there possibly with negative numbers, that formats the decrease. Then of course we have the date and then any other kind of information like like info data info or MIMO info through electronic transfers or possibly check numbers. If we have checked numbers will be input. So it's, it's actually not a whole lot of data. It's pretty much increase, decrease to the checking account and a memo and a date that are going to be included. So if you think about that going into your QuickBooks system, then you've got to think, okay, what do we have to do in order to make this something that can then be used to make transactions. And when we think about actual financial transactions, then we're thinking about usually forms meaning when we entered into QuickBooks, QuickBooks is going to want to convert it into some kind of form like a check form and expense form. And if it's banking transactions usually check formed, expense form or a deposit form. Those are like the forms that we're going to have to convert over. What are we going to have to add in order to do that, we're going to have to assign an account, a GL Account to it, possibly a vendor for the decreases and a customer if we want to sort by vendor and customer data as well, for for them as well. So that's kind of the, the data that we'll need to add. Now when you download the information then from your bank, you should get something that looks like this. This looks like kind of like a QuickBooks software. If you work with QuickBooks Desktop, you might say, hey, it looks like QuickBooks Desktop icon or something like that. But you can see here it's a QBI o file, and this is a data file, so this is going to be what the data file looks like. So once you download that QBR kinda file from your bank and have your test data that you're going to win, upload into the system and practice with. And if you don't have corporate data with it as well, you could practice with any, any baking data. You can practice with your personal financial data and put it into QuickBooks. Quickbooks, which works great to track personal data as well. So you could use QuickBooks to track personal data and practice with that as well. But this is what the QBI o file will look like. And then next time we're going to take this QB o file and use it to then upload to the QuickBooks system, which of course will simply be go into this transaction area and then go into the process of uploading the transactions. 6. 364 Import Bank Transactions Into QuickBooks: Quickbooks Online 2021, import bank transactions into QuickBooks. Let's get into it with Intuit QuickBooks Online 2021. Here we are in our QuickBooks online bank feed test file. In the prior presentation, we downloaded some bank feed information in the form of a cube 0 type file from our institution. That file looks like this now, so it looks like this, It's a cube o file. Now we're going to take that data which basically just has the bank feed information that increases, that decreases to the check and account for the date range that we specified when we downloaded it from our institution, we're going to import it into the QuickBooks system. Now when you import it into the QuickBooks system, you don't have to have too much fear in doing so because it will not go directly into the creating of the financial statements at that point in time. It's not going to be impacting directly, right when you install it or import it, the balance sheet and the income statement because it's going to go into what I call Bank fetal limbo, meaning it's going to go into this other type of area that we're then going to have to assign any kind of missing amounts and give the double verification so that we can then include it into our system so that they will be included in the financial stamp transactions, which will be have an impact on the financial statements or be a verification, a double-check to the financial statements that we have made. So we're going to import this information. Then we've got to basically approved the data so that it will then be used in our QuickBooks system in some way, shape, or form. So let's go back into QuickBooks and we're gonna, we're gonna go then to the transactions tab on the left-hand side, and then you're gonna have the tabs up top, we're in the banking tab. So now we're gonna go to the options down below we have two options, connect or upload transactions. Remember that as we upload the transactions are, as we add the data that it is going to have to need an account to go into. In other words, if I go to the chart of accounts down below into the accounting tab, then we're going to need like a banking type of account. We don't have one set up yet. So as we enter the bank feeds, we're going to be adding a new account. If you already have the account to set up, then you want to be like mapping the banking information to the account that you want it to be going to. But we're going to set up a new account as we go. So I'm gonna go back up top transactions. If you were to connect directly to the bank, you would be selecting item one if you're downloading the bank transactions and then uploading, we're going to select the Upload transactions option after having received the transactions from the bank. In either way, we should then be in the same area, that meaning the transactions in the system and basically bank fetal limbo that we then need to approve an add into our QuickBooks system. Also note that as we have the bank feeds in the bank feed the limbo, and then we process them into our system. That's when we can start to set up rules and QuickBooks can kinda memorize transactions and automate the system more and more as we go. So the first month, of course, will be the most difficult month to deal with or the first group of transactions. And then once we start to enter transactions, we can start to automate the system more and more. So we're going to upload the transactions here. And then it says on the left, get your info from the bank, open a new tab and sign into your bank, download the transactions in a CSV 2F0 QB 0, 0 fx or TXT format, only close the tab and return to QuickBooks. So that's the one we're going to be using. We downloaded it in a cube o file. That's probably the easiest way to get the file and upload it. If they don't have those files at your institution, then the CSV file is kinda like that Excel type of format. Most institutions will have some kind of format of like a basic Excel spreadsheet and you can use that format. That's the two formats I'm most familiar with using. So I'm going to go to the old browns because we already did that. We have our file now on our desktops and then I'm going to go to the Desktop, going to grab that QB o file. So there's the one I want that to be o file, selecting that item. And then that looks good. So I'm going to say next down below, we're going to say next, we're crossing the fingers now, we're going to have the information on the left-hand side QuickBooks account that we are going to be connecting to. And we don't have one. So now notice that I'm adding the account as we go. I don't have a quick if I had the checking account set up, then I can select the checking account. I'm going to say add an account. It's going to be a big type of account. Of course. It's going to be not a cash on hand but checking account. And then we might want to put checking account, we might want to put more detail. If we have multiple different checking accounts, then we might like Indicate which checking account we might have the institution that might be descriptive for it. I'm just going to use the generic checking account for our practice problem. Let's save it, Let's close it. So then I'm going to say run it. So now we've got our account set up and we're going to be adding the new transactions to it. It then going into bank feed limbo hopefully so that we can then approve those transactions. So next step, except your transactions, you're in control of how your bank info goes into QuickBooks transactions only show up in your books after you review and accept them. So again, that should alleviate some of our worries when we upload this information. That it's going to go into that limbo area and we have to review them and accept them before they have the impact on our financial statements like the balance sheet and income statement. So we're going to say, let's go Then. I feel completely comfortable and secure. So now we're going to be down. So I'm going to X out of that for now. So we'd get into basically our overview type of baking information, and this is the overview layout. So now we've got the data in our system and we'll go through and look through this bank feet. Now we're in like what I would call the bank feed limbo type of system. Now we gotta go through all this data and start to do what we need to do to add that data into the QuickBooks system so that it can then be used to either construct or confirm our financial data. Just to double-check this note, I'm going to duplicate this tab, right-click on the tab up top and duplicate it. And then I'd like to look at our reports just to confirm that there's no there's no data in here yet. So this is for the period of 2020. If I go to my reports on the left-hand side and we opened up then our reports down below. And this checkout, our financial reports like the balance sheet and the income statement. So we'll open up the balance sheet report here. Just just verify that we shouldn't have any data because this is the new the new information that we had in the system, but that it did include something down here. So let's check what that is. I'm going to go from 0, 1, 0, 1, 2, 0 to 12, 31, 200, and then run this report because that's the range that I'm looking at. Checking account. If I go into the checking account, put in basically as opening balanced transaction. So it did add this one transaction. I might have done it a little bit too quickly and allowed it to then put in this opening balance. So we have that transaction in there. Obviously, I can go back in there and change it if I need to, but that's what we have here. And if I wanted to check that, of course, to my checking account, I go to the checking account and verify verify the transaction, and check it there. So it indicates that cold that 1 over, but that's the only transaction we have thus far. If I then go to the reports down below, take a look at the profit and loss. We shouldn't have anything in there either. So I'm going to go up top change the date range from 0, 1, 0, 1, 2, 0 to 12, 31 to 0. Run that report and we have nothing there. So we have all this stuff on the left-hand side in basically bank fetal limbo here. And we need to pull them over. And we can pull them over in such a way that we can construct basically our financial statements from it or we can pull it in such a way if I already had data in the system to basically help me with a bank reconciliation process verifying the transactions that are going through. The bank will start with that next time. 7. 365 Bank Feed Center Navigation: Quickbooks Online 2021, the bank feed center navigation. Let's get into it with Intuit QuickBooks Online 2020 one. Here we are in our QuickBooks online bank feed test file. In prior presentations, we set up our bank feeds and import that data for the bank transactions into the system. And so now we're gonna take a look at the transactions tab on the left-hand side. This is basically the bank feed center, which is kinda like the QuickBooks Desktop terminology. But I think it's still applies here for the QuickBooks Online. So we're basically in the bank feed center and the transactions tab, or it might be called a banking tab that going back and forth between the name of this tab lately. And then we have the bacon information up top, the rules, the receipts, the tags. We're going to start off on the banking tab. Once in here, we can then close up the hamburger. Now if we scroll down, we have uploaded our bank transactions. So we have transactions from the bank account at this point in time. These are in what I would call Bank feet limbo. They're not quite into the system yet. They're not being used to either verify or to create our financial statements, to check that, to double-check that, Let's open up our financial statements by going to the tab up top. I'm going to right-click on the tab up top, duplicate it, going to do it again, double duplication. Go tab up top, right-click on it and duplicate it again, where we will then open up the Income Statement or Profit and Loss report and the balance sheet to report to see what we have in there thus far. So I'm gonna go down to the reports on the left-hand side. These are our major financial statement reports. These are of course, other reports that are going to be generated that we're going to need principally, although all other reports basically feeding into these major reports of balanced. Let's open up the P and L first, the Profit and Loss report. This is the timing report. We're going to put this in my case back to 2020 because that happens to be the range of the data I put in here. It might be different for you if you're testing out whatever data you have picked, the range that's relevant to that data. So I'm going to pick 0, 1, 0, 1, 2, 0, 2, 1231, 200. Run this item, nothing there, right? Because I have all these transactions, but they're not doing anything yet. They're not creating the end result, the financial statement yet because I have to approve them in order for them to do so. Then let's go to the next tab on over and let's take a look at the balance sheet, check that out. We're gonna go that reports on the left-hand side. Then we're going to be opening up that good old BS balance sheet reports. And then I'll arrange change the date range, change up top, making that from a 10120 to 12, 31 to 0. And I'm going to run that report and I'll close up the hamburger. And we do have this starting point of that 81, 80, 575 that put that beginning balance in place. I'm no team that and I might go back in and kind of double-check where that came from, but that's the starting point. No other information in the system at this time. So then if I go back to the first tab, then you can say, well, I have all the stuff that got transferred in from the bank account into my system, but it's not yet added to the financial statements yet now remember as we add it to the financial statements, then you've got to think about what type of accounting system you're using. I'm jumping back over to the desktop version now just to take a look at the flowchart and I'm concentrating in on the customer cycle. Remember on the customer cycle your your thought is him I just relying on say the deposits to record my income or am I going to have to basically record the accounts receivable and then use something like the deposits in order to match to verify what I already put in the system. So are you using bank feeds to make your financial statements? Or are you using bank feeds in order to verify the information that you put in basically helping you with the reconciliation process. So you've gotta kinda determine that. We'll talk more about that as we go right now. Let's just take a look at the face of the bank feeds here. So we've got, we're in the banking tab up top, up top. You'll have these little cards and this will show you the different items that you have bank feeds for. In this case, we only have one because we have the checking account and it's showing you that we have 58 transactions to review. So it's saying, Hey, you've got some work to do down there. We added these transactions. You've gotta go down there and approve them if you want them to be useful to you. So we're going to go down and say then we have our information down here. We have four Review 58 items, those 58 items then being displayed down below, those are the items we need to review. As we review them. They may go over here to the categorised item or if we say that we want to exclude them. So for example, if I took this one item and I was gonna say I want to exclude it, then it would move it over here to the exclusive items. We gotta be very careful about excluding items. Basically like deleting items that are going to be down here because these items came from the bank account. And if they came from the bank account, They already cleared the bank. So unless the bank is wrong, then we shouldn't be like deleting something or excluding something. We need to include it in our data because it has to be in there. So what we would want to do then. The only time we might exclude something like if it's, if it's matching up to something that we have already put in the system, then we can kind of match it. What we'll do is we'll match it and that'll be kind of like our reconciliation process. So really, unless there's a double or duplicate of information that's in there and you can't do the matching thing, it's not clear. Then, then you might do the excluding items, but just remember that you shouldn't really be excluding anything because it all came from the bank. And so if it's from the bank, unless it's wrong, it should be included in the system in some way, shape, or form. So there we have that. And then we have the date range. If you select the date range, it pops up down below. I'm at a 100 percent zoom and I can't quite see it. So if you get some kind of weirdness and the online, you adjust the format or the size of the screen. I'm going to hold down Control, scroll down a little bit. And then, and now I'm at 90% and now I have my ranges. I can check my date ranges, custom day and so on. And then I can sort by the range, due date range if I want to sort my data in this way, obviously if you have a whole lot of data, meaning, for example, if you import like a whole years of data, you're saying I gotta do taxes for 2020. I'm just going to import my entire year's worth of information into the system, then what you probably want to do is enter month at a time, meaning you might want to then change the date range for the month of January and then enter the data for the month of January. And then so on month of February and whatnot. If you do that, then you can get a feel for what the data's going to look like from month to month. Or you could just say, I want to sort it not by the date range, I want to sort it by transaction type. And that might make it a little bit faster to do it, right? So if you want to be methodical about it, I would do it month by month and then reconcile each month and make sure you're doing everything right each month. If you just got to, if you want to be a little bit more risky, then you basically just want to add everything and basically sort by transaction type. And that'll be kind of like the fastest way to go and then reconcile the whole thing on, you know, 11 right after another, but those are your options that you have the date range, and then we have the transactions. Now here they're all in the old transactions types. And we haven't, we haven't recognized any of the transactions because they're new. So once you have transactions in the system, then we're going to set up rules and QuickBooks will help to recognize transactions. So once again, after you do the first month of the bank feeds, the second month will be a lot easier. So notice we transferred everything in here, for example, in everything's in limbo, in QuickBooks isn't helping us out with anything really. They just gave us the raw data that's in here. What's that raw data? It's just what you would think from a bank, from your bank statement, we got the if you look at your online banking feed, what what do they have there where they got the date, they got the description. Then if you had a check number, it would have the check number. We don't have the e At this point in time, but we might be able to get it, for example, from the description, we have the amounts and that's it. That's all the data that it has. The data that it doesn't have to help us to add to the system is the E or vendor, customer or vendor that should be applicable. This field, by the way, isn't required to enter data into the field. But if you do not enter it, then we have a lot less kind of searchability. I can't search by customer or make reports by customer or vendor unless we add the customer and vendors, we might be able to get that information if we have electronic data transfers, deposits in checks, because that'll typically be in the description kind of system within QuickBooks. So we'll have to add those items and then we'll have to add the account and we don't know which account it's gonna go to yet. So QuickBooks doesn't know that. How would they possibly know that? So we're going to have to add those items, but as we add them, then we'll make rules and then QuickBooks will start to kind of recognize transactions as well. So then that's why as we go, this will become more and more automated or automatic, automated as we go. So match means that we're going to be matching it to another transaction that we have. So once again, if we have a system where we're not reliant on the bank, I'm jumping over to the flowchart. Again. We're not reliant on the bank, But rather we are entering the data. So I'm matching it. For example, if it was a deposit, like if I enter an invoice, then I'm going to receive a payment. If I receive that payment and it goes directly into the QuickBooks, can I match the the payment directly to the invoice may be right. That would be a little bit more long shot of a matching system, but you can see how that might be something you'd need to tie up because that invoiced these to match or you can say you receive the payment, but possibly haven't put it into the bank account yet. Can you match a deposit and the checking account to the receive payment, which basically puts it into an deposited funds. Or you might actually record it in deposits on our side of things. So we already have it in the account, it's already in the checking account. And then when I have the bank feeds, it's coming in, the bank feeds again, then I would have it in limbo and the bank feeds and already been recorded on our side. Then when we match it, that would be the most, you know, it's kinda traditional matching thing where we would just be verified basically doing the reconciles shown process as we have the bank feeds and we would match up the deposit to that deposit that's already in the system. When you think about the matching process, just remember. Quickbooks doesn't have a whole lot to go on. If it's a deposit, it's going to be matching by like the date and the amount of the deposit is what it's going to be matching by. So it may not be perfect every time it matches something out, you've gotta kinda double-check and see if something is matching in. If things do not line up if you have like in your system, we have two checks that there are two deposits that add up to one deposit on the bank statement, meaning we're not putting things in our books. That deposits in our books in the same grouping or format as they go to the bank statement. Quickbooks will most likely not be able to find out find in lineup the matching in that case. And you can have to tell QuickBooks to match it. And it won't be as automatic. Do that. So then we have the transfers, we've got the rules that are applied. The rules are going to be the, the rules that we apply to the transaction. So once we do a couple transactions, we can start to set up rules and say, Hey, look, if it's this description that I want you to make it go to this vendor, for example, and then deposit it to this account. And those rules will start to make it a lot easier for us to automate the system going forward, missing pay E and customer. So if we want to go through and make sure that we are entering the payee and customer because it's possible to enter the transactions without them. And you're losing data if you, if you do that, uh, you're losing the ability to sort your data by customer and vendors. So you want to add those if you can, and then unassigned items that have not yet been assigned. So then we can certainly have the search field up top so we can search a particular transactions. And that way we could sort by date. As you can see, we could sort by description. This can be useful again, if you're doing a whole year's worth of data, you're saying I'm putting all that 2020 and here I'm just going to build this thing and make my tax return. Like right now it's gonna take me like ten minutes. It's all going to take you more than two minute. But then if you hit this, then you're gonna get the same kind of transactions together, then you might be able to do some kind of group actions, right? Yeah, I could do like group actions and whatnot in confirm. At the same time using these kind of group actions, that would be the kinda like the fastest way to go. The most methodical way to go would be to do it month by month and then reconcile each month as you go. So we've got the check, it might be useful is searched by cheque number, the payee, and then the amounts. So date is probably the first kind of default and then descriptions probably the second item that you'd be sorting by for the most part. And then we've got the assigned to and these are going to be the accounts that it's trying to assign these two. Now this is the first time that we've entered this data. So some of these are probably not going to be right. And it's like how would they possibly know, you know, where exactly to assign these two out. So you might have a tendency to say, I'm just going to confirm all these and it'll assign it to these accounts if you were to do so. And it wouldn't be adding the payee or meaning the customer or the vendor as you do so, so you don't really wanna do that because it's the first month. So you're going to want to basically make sure to verify these accounts that are going to be assigned out too. So you can see that if it's a, if it's a deposit item, they're putting it to basically sales, meaning this being the checking account. It's an increase or decrease in the checking account. Where's the other side going to go? Well, if it's a deposit, then the system is going to try to put it to sales, most likely because there are going to assume it's going to be sales. But if it's money going out, like it probably doesn't really know it's putting it to owners pay here. Owner's pay. Owners pay so that the decreases are clearly not right because you would think these would be going to expense accounts. So you can't just go out of, uh, out of the box as they would say or out of the right as you upload and rely on the assigned two accounts. If you hit, if you click on one of these items here, then it'll open up and you could basically the detail that you can have. And then you can enter the detail. I'm going to hold control and scroll down a little bit so that we can see this full detail on one tab. We've got the categorised we can find or match. So categorized means this is going to be our normal categorisation. We have the transaction date up top now the vendor or customer, that's what we want to make sure to add. You don't have to add it to confirm it, I can add this to my statements without the vendor or customer, but I won't be able with it then track by vendor or customer or run reports for vendor or customer. So you might have a system where you just don't know who the customer is. Maybe you're getting deposits, you're just putting that into the bank account and they're not electronic transfers. And so I don't know really exactly who the customer is and I'm fine with that. I'm just trying to make my my income statement. So then if that's your system, that's fine. But if they're electronic transfers and you have the memo down here, the MIMO often includes who the customer is. So you're going to want to go down into the MIMO and add, add the information into the customer field, oftentimes, and then we have the tags. If the tags are applicable, you can have an ADD attachment here. So if there's any ad and things that you wanted to add, it's probably somewhat unusual, but you can't do so. You can create a rule this way. So you can actually, once you enter this data, you can say, Hey, look, I wanna make a rule about this transaction and that'll help you to kind of really have control over exactly what's going to happen next month When the same stuff rolls a word or even in the same month if you entered all these transactions, the other the rule will automatically apply to anything else that's here in limbo, the bank feed limbo, excluding it, which basically it's kinda like deleting it. So you want to not do that most of the time. Here's the account that would be categorized and then we can have our chart of accounts and we can properly categorize then the account. If we need to find or match it to something, then this is going to be a list of items that QuickBooks is going to try to match it to two. Meaning if we already had something in the books that we should be matching this particular transaction 2. We can go in here and find it. And so then instead of us enter in the transaction, we would be matching it to some type of transaction. So we've got record a transfer. If it's going to be a transfer is going to be applicable and record a credit card payment. If we have a credit card payment that's going to be affected. Now if it's a credit card payment, we might have it set up with another bank feed and we'll take a look at these more in the future because we could have credit card bank feeds, right? And if it's coming out of the checking account and I'm paying off a credit card which is another bank feet account. Then the question is, well, now I've got one bank feed, go into the other bank feed. When I bring in the bank feeds, it's going to have this transaction on both sides. Like what's the best way for me to deal with that? And we could have a situation where the transfer as well. And that's meaning like if I'm doing anything that's going to go from one account that has bank fees related to it, a bank account or credit card account, and the other account has a bank feed related to it. Then again, that the bank feeds are going to flow in and I'm going to see the transaction. So if I'm paying off, for example, the credit card, then I'm going to see the decrease on this transaction coming out of the checking account and I'm going to see it as a payment on the credit card side. And then again, I gotta kinda match those two things out as I approve the transaction. So we'll talk a little bit more about that, the future. So I'm going to close that out. I'm going to hold down Control scroll up just a bit. Now if we want to go directly from here to the register, we can go to the register directly here. This will take you basically to just the check register. And then we can print this information, we can export the data. This tab is useful here because sometimes these items are not checked off. I kinda like to start off with everything checked off here. I'm going to, I'm going to check the mixture to have the check number if the replicable, if I have no check numbers, if you see nothing in this column, then you can uncheck that. I like to see the payee because I want to know if there's a payee. The fact that there is no E applied here means that we need to add some, in my opinion because I want to have the payee included possibly. Now if I turn on the grouping, then it'll help us to group. In this case, we got the grouping by month. So it puts in the month items. So if you're doing this month by month, then that grouping could be useful if you're doing a methodical method, I'm going to interject the first month in the second month and so on. That could be useful. It's not useful if you're trying to do it really fast and you're trying to enter all the transactions that are similar At 1 in time, show amounts in one column. So we have the editable date fields. So we want the date field to have to edit to be able to edit if we so choose Copy bank details to the member. So we want this. Sometimes if I don't have the, the description detail over here, by default, it'll kinda give me an abbreviated description. So I want to I want to have the detail on and copy the bank detail to the memo. So I'm going to include the bank detail on the memo, so I have it. So Show suggested rules. So the the system will try to suggest what the rules will be. In this case, sometimes their suggestions are good, sometimes they're not, usually they're pretty good. So that'll help you to make your bank rules kind of automatically. It's going to help to you as we go through this, you'll see, it'll start to say, hey, this is a bank rule that we can put in place. Do you want us to do to do that? And if it's good, we will. If it's something that we want to have more control over, then we might want to go in and make our own rules related to it so that we can make it more specific to cover certain type of items. We'll look more at bank rules in the future. Show bank details. So this is the one I was talking about with the if I take this one off, then you see it tries to give you just like possibly the vendor here that could be nice. It's easier to look at. But if I want to make bank rules or something like that, I'd like to see all the detail that's coming through. So all the detail that's coming from the electronic transfers that gives you the numbers and all that kinda stuff might be helpful if you're trying to make rules. Because for example, you might have like one vendor that's for two different locations or something like that. And you might be able to distinguish those two different locations by some other thing, like like the number or something like that. And if I don't show the details, then I only have this minimal amount of data. So I'd like to show, show all the details so that when I can make the rules, I can apply out the rules. Obviously when I just create the vendors here, I'm probably just going to take like for example, Verizon, I'm not going to call it Verizon Wireless payments to 006, so on. But if I'm making a rule, I might use this number, for example, to distinguish between one location and another location where I both have horizon payments or something like that. So I keep that on enabled suggested categorization, so we'll keep that then we could have the size of how many we want on a page so we can increase the size of how many that we want to be located on the page. So that's in the COG I usually go in here and check all these off if I remember to do so. That's probably what I'll do most of the time in this practice problem. So if I forget to show you that, then that'll be the default. And so that's going to be the basic, the basic overview. Obviously up top, we're in the banking and then we've got the rules tab over here. So once we start to create the rules, the rules will then be demonstrated. Over here. You can add new rules up top. You can edit the rules once they're in place. We'll talk more about rules later. And then these two are the main banking information. Then you've got your receipts. This is where you can upload receipts and whatnot. It's not as tied in, not as related to the bank feeds. And then you've got your tags that are also in this section. This is not what we're going to spend most of our time and our bank feet area, we're going to be spending our time in the banking mainly and in the rules as we create them. 8. 370 Add Normal Expenses To Books From Bank Feed Limbo: Quickbooks Online 2021, add normal expenses to books from bank feed limbo. In other words, we have information into the system directly from the bank with the help and use of the bank feeds, they are in what I would call Bank fetal limbo meeting there in our QuickBooks system, but not being used to either verify or create financial statements including balance sheet and income statement. Now we will go through the normal expense type of transactions to start that process, taking the items out-of-bag, fetal MBO, putting them into QuickBooks so that they can be part of our normal bookkeeping. Let's get into it to its QuickBooks Online 2021. Here we are in our QuickBooks Online, that big feet testfile. We have imported information into our system using the bank feed information. And now we have the information in what I would call Bank feed Limbo, which we can find on the left-hand side and the transactions tab. So we have our information into the one account, a bank account up top, indicated by the tag up top. Then we have our information down below. It's in bank feet limbo because it's not being used to either support or create financial statements including balance sheet and income statements to verify that, let's open up the balance sheet and income statement by going into the tab up top, I'm going to duplicate the tab. Right-click it on the tab to do so, duplicate and we're going to duplicate that process again, right-clicking and duplicate. So now we've got the two tabs up top. I'm going to open up on the far-right tab, the P and L, the profit and loss, the income statement, three names, same thing. And then in the tab to the left, we're going to be opening up the good old balance sheet report. So we're on the tab to the right. We're going to go down to the reports on the left-hand side, opening up the P and L profit and loss, also known as the income statements. So here's the P&L profit and loss and we'll open that up. We'll change the date range, change Indianapolis from 0, 1, 0, 1, 2, 0 to 12, 31, 200. Whatever range is covering the data you're working with will be fine running it. There's nothing there. That's not very impressive. That's because we haven't included anything from the bank feeds in yet. We're creating our financials basically from the bank. So then let's go then to the second tab on over and let's say, Well, what about the balance sheet? Go into the reports down below and opened up the good old BS balance sheet, and then range change that one up top, starting at, in our case, 0, 1, 0, 1, 2 0. To, hold on to say something funny happened. 0, 1, 0, 1, 2, 0 to 12, 31 to 0. Run it. Then that beginning balance for me put in that beginning balance. So I've got that 185, which is kind of annoying to make his I don't feel like but I'm okay with that. So we're going to have the 185. That's all we have thus far. Going back to the first tab. Then we're in our transaction item. I'm going to close up the hamburger up top hold down Control. I'll scroll up just a little bit. I'm going to probably scroll in and out a little bit as we go through this, just because it can adjust or modify the way we see the screen. So then we're, we're inside here, we've got our transactions down below. We went through the types of transactions last time, kind of a layout of the screen. I'm going to hit the COG to the right-hand side. I will typically have checked numbers on if I had any check numbers and I don't have any, so I'll keep them off right now. I'm not going to group by month. I'm going to take a look at all the data together. And then I typically will tick off all of these items down below so that I have all the data including showing the bank detail in case I want to use that bank tape detail to make bank rules with. So that's what we have there. Then I'm going to go through some of these transactions. I'm going to kind of pick and choose some of these transactions so that we could do like the easy ones first, let's take a look at the easy transactions, just a normal bank feet type of transactions. Remember that by default it'll basically be by date. But you can also sort by description. So if I wanted to kind of group everything together and then, and then enter a lot of transactions at one time. Or this can help you to think about your bank rules. As you enter the bank rules, you could do this. Your two methods you're probably thinking about. If you're think, if you're entering a whole bunch of data like a whole year's worth of data is, do I want to do it month by month? And then that'll help me to do a month, reconcile it, make sure it's correct, do the proper bank rules and then go to the following month or do I want to just jump into it and then enter all the like transactions at one time, which can help you to enter the data really fast, but not be quite as methodical about it. So then let's go ahead and I'm gonna go ahead and sort it by date here. And then we're going to go through and find a few of these items that are, that are going to be the easier transactions. So I'm really looking for kind of a decreased type of transaction. So I could search for a mount here. I'm looking for the amounts that are going to be taking the transactions down. So the ones with a negative number. So maybe I'll go for the negative numbers here. And I'm looking, say for the utilities, let's go for the SoCal utilities. I'm going to start with the older one, in my case, five 1920. Obviously there's a couple of them. For the utility is after I enter one, then I can enter a rule and the bank feed rule should then apply it to the other ones as well. So now that I have this information, I'm looking at this item. Now. I can't just confirm it because notice that QuickBooks has the wrong account. It shouldn't be going to the personal page E. It's going in the wrong account in part because I deleted some of the accounts so that we could add them as we go, but this should be go into an expense account, possibly utilities expense. Also, I want to have a vendor related to it. So if I wanted to sort by vendor, I can't I don't need the vendor to create the balance sheet and the income statement. But if I want to have the added detail of sorted by date or by who I paid, then I need to add it. Notice that you might say, well, I have it here by the description, it says SoCal there, but that's not the vendor. That's the memo that came in the electronic transfer from the bank feed. So I want to take that memo and use it to make a, make a vendor width. So I'm going to click on this item. That'll give us the detail. So the dates probably something that you're going to remain the same. This vendor. I don't have any vendors yet, so I'm going to construct them as I go just using the bank data basically to do it. And usually you can get it kinda from the memo down here, I'm going to take that memo. So kalguksu gas company going to make the vendor with it. Now when you do the first month, you got to be careful in and say, Okay, how do I want to sort the vendors? I don't want to have like multiple vendors for the same transactions. So make sure that as you go forward, you're not adding multiple vendors kinda just as you go because then you're you're gonna have too many vendors. And when I do the second transaction, I should be taking it consistently to the same vendor here unless I have some reason to create a different one, but I'm going to just add the vendor. Now. I don't need to add a lot of detail on the vendor. I'm not going to say I need details for them because it's the gas company. I don't really care about their contact information or anything like that. I just want to have the vendor in there so that if I want to sort my data, my data by who I paid, I could do that, but if I want to enter more detail for a vendor, I could go to the details here and get their phone number and this kind of stuff there, contact their address and all that. Good stuff. But I'm just gonna go ahead and say Save, add that vendor as we go. And then the account. So what account is it going to go to? Notice I basically deleted all the accounts so I could show us how to how to make accounts as we go. The soul cow gas company, if you had already set up a chart of accounts from into it would probably be going into a utility type of accounts. They probably add it to the utility type of account. But remember, as you add accounts, you have a lot of flexibility in terms of how you're going to group the accounts you might just call it. For example, if you're in a company that uses a lot of gas, then you might not be grouping, say gas, telephone, electric, you might be saying, I want to put gas separate. I want to track gas independently from the electric bill. And then you could do that. You can say that this is the gas expense or something like that. But I'm going to put this in the utilities in my experience at this point, electric and utilities probably are the two that kinda get grouped together. I'll break out the phone in its own category. That's how I would typically think of it. So I'm going to add an account as we go. Most of the decreases, most of the time the account we're going to add are going to be expense accounts because it's going to be a decrease to the checking account. Usually those are expense accounts. Not always, but usually. So then I'm going to say it's going to be a utility type, the second detailed type, not as important. The name's going to be important because that's what the name of the account will be. It's going to be utilities, so I'll keep it at that. I don't need to really call it utilities expense because it's already an expense type of account. And when I see it in the drop-down, I'll see it as an expense. In other words, if I say yes and I hit the drop-down, you can see here that the account type is on the right-hand side. So there's utilities expense. So if you put expense in the name like some accounts that just sound right to have utilities expense. It sounds right to just have an expense, but you don't have to put it in the name, but if you want to, you can. So then if we scroll down, we've got to our tags down below. I'm not going to be adding the tag. The memo is coming in from the bank feed information. I'm not going to attach anything related to it. We could add a rule with it. And that could be useful because the rule could then help us to do future transactions. And so we might want to do that methodically and add the rule rather than kind of have QuickBooks guessed the rule most of the time, but I'm not going to do it this time. Notice I'm going to do it in future transactions. And normally, any new transaction, we don't have a rule that you might want to create it manually yourself so that you can have more control over what that rule will be. So I'm going to say confirm. And so there we have it to know if I scroll down, I still have these other two that didn't automatically apply out because I didn't have a rule and in QuickBooks didn't basically automatically put a rule to it. So I'll start to put the rules next time as we go. Because again, that's going to be the normal process that you would you would kind of want to do to make this as fast as possible. So we'll start with that next time. And then if I go to the categorized area. So now we've categorized this item. So it's categorized, it's been added to the expense utilities. We can then see the effect of it on the financial statements because now it should be included in our financials. So if I go up top, then two, Let's go to the income statement. Well, let's go to the balance sheet and then I'm going to refresh this report by running it again. I'm going to close the hamburger hold down Control scroll up just a bit. And then within the checking account, if I zoom into it, if I click on this account that will zoom into it, give us our auto zoom. And then we have that 185, which was the opening balanced. And then there's that 29, 53 there it is. Quickbooks used an expense type of form to input this meeting. We entered it with a bank feed, but expense, the QuickBooks is not going to take us back to the bank, the data input field. It's going to use a form. That's what QuickBooks does. Meaning. If I go to the desktop version just to look at these forms and a flow chart format, a normal transaction. What will QuickBooks will do when it records transactions is look for data input form like a like a bill, an invoice, or receipt. If we're talking about things that are affecting the checking account, it's typically a check form or an expense form which are basically similar forums. And or then an a deposit type form for the, for the increases to the checking account. So typically when we enter the data, that's what the form is going to be used. Meaning, if I drill down on this, it's not going to take us to the bank feeds. It's gonna take us basically to an expense form. That data input that we used basically was to populate the expense for it. We had the E and then we have the date and then we have the other side go into the utilities. The expense form is the form that shows a decrease. It's like a check form shows a decrease to the checking account other side then go into whatever account we assign, in this case the utilities account. Closing that back out. Scrolling back up, going back to our balance sheet, Let's take a look at it on the profit and loss next tab to the right. I'm going to run that report. The fresh ended up so we're looking at a fresh report. There's all utilities expense, so It's expensive. Now been added in the expense item like you would expect, though it is in our detail in expense type of form that has been added with the help and use of the bank feeds. So going back on over there, we have that also note if I right-click on this tab again, I'm going to duplicate this report again. And let's just consider the the vendor that we have entered as we go as well. So meaning, I had to add the vendor or I didn't have to, I could have not added the vendor. But if I add the vendor and I go to the expenses tab on the left-hand side and look at the Vendor tab up top. Then I can sort my data by vendor. There's the soul cow gas company. If I didn't add the vendor, I couldn't sort in this way and there I have it now I can see my detail for the SoCal gas or I could run reports by vendor, which again, I need to assign the vendor to do so. Let's go back to the first half again. I'm going to hold control down, scroll down just a bit. I'm going to go back to the first area for review, go into the items for review. Let's take a look at another one. So I'm going to scroll down. I'm going to kind of pick and choose the item says the phone bill, that should be fairly easy. But let's pick up a primary. Here's a prime America life insurance type of transaction. So let's say we got that one. We're going to, we're going to categorize that. So we need to choose an account that's the minimum that we need in order to do so, I'm going to select the primary aka account here. I'm going to hold Control scroll down just a little bit so I have a little bit more information. And so I'm gonna say this is going to be primarily life insurance. Now there's another, there might be a similar name to some other items. So we want to make sure that we're picking up the names necessary to make a rule on. So for example, I might have two places where I, where I pay prime America, but I might want to have a different vendor possibly so that I can fly out a different rule, even though, you know, it's going to the same place, but they're for different amount. That might help us, in other words, to have two vendors so that we can apply it out to different rules. Or you might have one vendor that then again, you want to play out for two different expense accounts that you're painting. So in that case, it could help us to have us full description in the memo down here so that I can create a rule that will assign out even though it's gone to the same vendor, the same place to two separate expense accounts based on the added information in the detail that's been given to us. So let's see. I'm going to I'm going to tab over. I'm going to add the vendor. I'm just gonna save pri primarily a life insurance. And so then I'm going to say that category. I'm just gonna make it generic kind of insurance, expensive account for it. You might put it insurance. Sometimes it's goes into prepaid insurance if you're doing an accrual process, I'm just going to make it a generic insurance expense account at this time. So I'm going to say this is going to go to insurance, kinda be an expense type of account and I'll make it insurance. So travel, I'm going to say other Here's insurance. Insurance, just a general insurance expense. I'm going to save it and close it. So there we have it. And this time now I'm going to say, Look, I want to make a rule based on this so that every time I pay this, I'm going to I'm going to have it be automatic. So I'm gonna make a rule. I'm going to make it as specific as possible to this so that I can I can apply it out every time. So the rule name, oftentimes going to name it just the the name of the vendor. Someone to call this primary life insurance rule. It's going to be a money out rule, meaning of course, we're talking about money leaving. The checking account here. And then we've got the, the bank. We can assign it to all BankAccounts or we can just assign it to the one we are working in. So if we have a same vendor that we're going to be paying out of a different account. We might want to use the same rule. I'm going to assign it to all, but it doesn't really matter in this case because we only have one account at this time. But when we have a checking account or something like that, it might be applicable and include. So I'm going to say we have the rules down below now, oftentimes we only have one rule, but we can add other conditions for more complex rules. I'm usually just going to be looking at one rule. And then later on when we get some more complexities, we'll talk about more complex rules. Then if you have more than one rule, you could say, I need it to meet all the rules. Meaning if I have multiple conditions, multiple rules, I need it to meet all rules in order to apply this rule. Or you could say, it just needs to meet any of these rules in order to apply them. It doesn't matter for us because I'm just going to have one rule at this time. And then we can assign the rule to the description, the bank texts, or the amount. Normally we're describing it to the description because that's where the most descriptive information comes in through the bank feeds. However, note that there's a difference between the description and the bank texts. So the bank texts is kinda like the memo that comes through. So if the rule does not apply at one of these, then try the other one, toggle back and forth between the description and the bank text, then we can say it either contains, doesn't contain, or is exactly. So Contains would be a little bit more broad, meaning, I don't want it to say exactly this memo including all these numbers down here on the memo, on the description. The next one, the numbers might be different or something, right. I just wanted to contain what I tell it to contain. If it doesn't contain something that might be useful when you have like a more complex rule with multiple conditions. Not typically the default is exactly If you want something to be exact, then you would use this item down here. And then it says Crime America. That's not descriptive enough for me. I wanted to include this whole thing here because I'm going to maybe have someone else that I pay prime America, but I want this one to be the life insurance item. And then if it meets that condition, then if it meets this condition, then we want the transaction type to be an expense type. That's basically the form, kinda like a check type of form. Meaning, you know, it's going to be done with a check kinda formed my expense type of form. Decrease in the checking account, that category. That's the account. I don't know why they don't call it an account, but we're going to call it a category which is the insurance expense account. And then the E is going to be primarily a life insurance That's the vendor that we just set up. I'm not going to assign any tag. And then the memo down here is going to pull in the memo, it says automatically confirmed transaction. This rule applies to auto confirm. I'm not going to do the auto confirm. I'm going to turn off the auto confirm because I would like it to ply apply out the rule but not confirm it automatically. I wanna go in there and physically give it a double-check before I confirm it. And that'll help us out with our practice problem as well. So I'm not going to just say just as soon as it comes in from the bank, just confirm this rule and put it right into my books. You can. But it once you become comfortable with it. But for now I'm going to take that off and I want to test it out for like a month or two to make sure it looks good and confirm them manually. So it'll apply the rule hopefully. But I won't be confirmed and then I'll go through and confirm them. So I'm going to save it. Let's do that. And now what I would expect to happen then if I go back to my information is that I could sort by the filter now and sort by rules applied, but I can't, there's nothing in there. There's no rule apply it. And I'm going to say, well, why didn't it apply it? Because if I unfilter this and I go down, I'm going to say, well, there's prime America leaf right here. It should have applied it to those two. Why didn't it do so? So if I go back up, then I'm going to go to the Rules tab to see that rule. There's the rule that I made. I'm going to edit it. And typically the toggle that I'm going to have is between the description and the bank text. So I'm going to say, all right, it didn't work with a description. Let's try the bank texts and then save that. And then if I go back on over to the banking side of things, I say, okay, let's search and see if it applied out the rule and that function. And I'm going to save the drop-down rule applied. I'll search by. The rule is applied. It's assigned to the insurance account and now we have a payee that's included. I'm going to close this back out. Note that sometimes it's useful to sort your text by the E Now because if it has an E in here, that can give you an indication that it's more ready to be approved in that case. Whereas if it doesn't have a PE IO or a customer, that's an indication that you need more work. You need to do some more work for it. So I'm not going to add, so if I scroll down, I'm going to just add one of these items down here. So I'm going to add the, the the earliest one, the 518, what you could do so you could add them all by clicking them off like in this way, batch adding them up, I'm holding down shift to click them all off and I could confirm them at one time. But I'm just gonna do one at this point. So I'm going to click this one, or you don't need to click it. I'm going to confirm it over here. Notice this item also shows that the rule is being applied. So I'm going to confirm this one. And then let's take a look at what happens to our financial statements. Let's go to the balance sheet now I'm going to go to the balance sheet and run it again to refresh it, hold down Control, scroll up just a bit. Then I'm going to zoom in on that 130. So there we have the transaction for primary aka life. If I go into it, it's going to be a check type of form as indicated by the transaction type. In other words, it doesn't take us back to the bank feeds. But two. Spence kinda form which is like a check type of form. Closing this back out, scrolling back up top, back to the balance sheet with the back arrow. Then on the profit and loss, I'm going to go into that run this report. We then see the insurance item here as an expense decreasing on our income statement. Also note that if I go to the vendor tab on the right-hand side, and then I go back to the, to the vendors. Let's go here and then go to my vendor tab. Now we've got our two vendors with Prime America and SoCal. It's useful to add the vendor when you add in the transaction so that, that will indeed be the case. Let's do one more for the telephone because that's going to be fairly straightforward. Let's say we got Verizon here, so I'm gonna go down, let's search it by the description. And I'm just going to search out Verizon Wireless, which you'll be down at the bottom. And I'm going to pick like the oldest one, so I'll pick this one here. And then once again, I need to, I need to add some details. So I'm going to add it because it's the first month. I'm going to say I'm not going to pick up all the detail. I'm just going to call it Verizon Wireless. That's going to be my vendor. Paste that into the vendor tab. I don't need any detail on. That's all I'm going to add right there. So I'm just kinda say save that. I don't have any tag that will be applied, That's basically it. Then I want to assign a rule. So I'm gonna say give me a rule on this because the Verizon will be fairly standard. I'm going to once again paste the name of the vendor as the rule. Typically, It's going to be a money out roll all bank accounts, that's fine. Either one all or any of these will apply because I'm only gonna have one condition. We have the description. I'm going to go to the bank text this time because last time that description didn't pick it up at the bank texts did. And then I'm going to say it contains then Verizon Wireless, not the whole description down here, not everything that's in the description numbers. Just basically that name is all I want. That should be enough. Note once again that if I had two different locations, may be something in this detailed description will indicate one location to the other, helping us to apply out automatically to two different locations or two different accounts if necessary. This case, we're not doing that when they talk more about that later expense type of account is the transaction type. We want it to be going to an expense account, which I'm going to add a new one. We're going to add a telephone expense. We could put it to utilities, just like we did on the other one. But I like to break out the phone company. This is your choice in terms of how much detail you want on the expenses. I'll keep it utilities here, but then I'll call it telephone on the name. And that's it. So I'm gonna go ahead and save and close that. So there's the category the vendor is going to be Verizon. I'm not going to add any tags. And then once again, I would like to confirm it myself not have it auto confirm at least for the first few months. So I'm gonna say and there we have it. And then if I go down, I'm just going to add one of these again so we can see the effect. So I'm going to add this item. Let's say I'm going to add that notice that they all have the rule applied to it, but I'm just going to apply one of them out. And then we can check out the effect on the financials, go into the the balance sheet. I'm going to refresh it, running the report again so we have a fresh report. It's nice and warmed up, ready to go. And then if we go down, we have the Verizon. It's an expense type of form. If I go into it, we're basically like a check type of form, expense type of form, decrease in the checking account. There's the accountants going to expense means it's decreasing the checking account. Closing this back out other side then on the income statement, scrolling up back to the balance sheet, go into the income statement, refreshing the report. And now we've got our telephone expense down here, building up our income statement. Go into the vendors tab because we added the vendor we now have for Ryzen wireless as well as a vendor and consort or information by vendor. So we'll leave it here for now. I'm gonna go back to the first tab and just note that in following months then as we enter data in the following months, you could automate these items with the rules, or then you can filter by the rules. Now I could filter by the rules, and then I can just check off these rules very quickly and add them in following months. You can see how the following months become more and more automated. Also note, if I go to the tab to the right, that we are building our chart of accounts. If I go down to the accounting tab and we take a look at the chart of accounts we have now added to our chart of accounts as we enter the data. So that's why it can be nice to have nice clean chart of accounts to start off with and then make a custom chart of accounts you might want to use what QuickBooks provides you and then first, see if you're entering something that lines up to their category that could be useful. But again, if you want to create your account from scratch, especially if you're using this for personal purposes, then it might be useful to just build your own expense accounts if you're using this, for example, for personal purposes, than your desire on what your account categories may differ greatly than a standard expense category. You might want to know which grocery stores you're going to or whether you go into a fast food versus sit-down restaurants or this or that and do your expense accounts may vary. You could you could make them basically as you go as you, as you enter the data into the system. But in any case, that's going to be where we stopped now I'm going to and then we'll continue on with some of these transactions in future presentations. 9. 375 Enter Transaction Purchasing Equipment Using Bank Feeds: Quickbooks Online 2021, enter transaction purchasing equipment using the bank feeds. Let's get into it with Intuit QuickBooks Online 2021. Here we are in our QuickBooks online bank feed testfile and prior presentations, we set up our bank feeds and we started entering some of the basic types of transactions we're going to be continuing on here with the purchase of equipment. So we're going to go to the transactions, or it might be the banking tab. They've been going back and forth between those two names. On the left-hand side here, scrolling on down, we have our information on down below. We're not going to be opening up our two major reports, balance sheet and income statement by going to the tab up top right-clicking on it. Duplicating that tab, we're going to duplicate again by going to this tab up top, right-clicking and duplicating again, we're going to be opening up the P&L profit and loss income statement as well as the BS balance sheet. We will do so by going into the reports down on the left-hand side, opening up the old reports. And then I'm going to open up the Profit and Loss report to start off with. I'm going to change the dates up top that date range change, which is going to be 0, 1, 0, 1, 2, 0 to 2. I'll put a little thing or two 1231 to 0 for me. I'm gonna go ahead and run that report. This is what we have thus far. We've been practicing the type of banking transactions that are usually pretty easy, pretty straightforward, those normal type of expense transactions. So we have the insurance which may not be as normal. You could have a prepaid but telephone utilities. Then we're gonna go on to the second tab over. And let's open up our balance sheet here, that BS balance sheet in this item go into other reports down below and open up the BS balance sheet. Then we'll do a date range change up top 0, 1, 0, 1, 2, 0, 2 1231 to 0. We're going to go ahead and run that report. Close up the good old hamburger. And of course here we have most of the activity up top in the checking account being the other side. Let's go back to the first tab now this is what our banking information is. I'm going to close up the hamburger because one of the transactions tab, and we're going to pretend now we've got an item that is going to be for equipment that we purchased. So we're going to say that we purchase something that went through our bank gets on the bank feeds now and now we're going to add it into the system, but it's for equipment, it's a larger purchase. So if I go down through here, I'm going to be picking up. Then the let's see, I want to be picking up this one. Actually I sorted it by date. Now, I'm going to pretend this one is for the purchase of equipment. Now, if we purchased basically equipment, we might purchase it from a large sort like an Office Depot or something not like an online store or something like that. And we may only know that it's for equipment by the dollar amount. So it could be over a threshold over a certain dollar amount that we allocate them to equipment if under that dollar amount than we might allocate, it collects supplies or something like that. Therefore, the rule that we will have it will not be as straightforward when we enter something in that of that nature. Unlike a rule for utility bill, which is pretty straightforward if I paid, you know, Edison or whatever, it's going to go to the utility company. So if I select this one, we're going to say, all right, I'm going to add this one. I'm going to hold Control, scroll down a little bit. And so I'm going to add the vendors. So I'm just going to say it, this is the vendor. So I'm gonna put that here on the vendor and then owner's equity is not the other side. This time I want to add a new account, but it's not going to be an expense type of account, but rather a fixed asset type of account. So that's going to be the difference. It's not going to go on the income statement. We're going to put on the balance sheet because it's over a certain dollar amount or in other words, it's an investment, it's something that we should put on the balance sheet and then allocate the expense in the form of depreciation over the useful life. So I'm gonna go and say, I need to add, then let's add something and the account type then this is the important part. It's not going to be an expense, but rather a fixed asset type of accounts and something we're going to put on the balance sheet. And then we can say, is it amortization? Know where we're going to say it's going to be equipment or something like that. So we've got the furniture and fixtures, computers, copiers. Now when you add these type of items, I would try to add it in the same kind of format that it's going to be showing up on your depreciation schedules, which are often in the format of your tax software. So the tax software will often be driving what the depreciation schedules will be look like. So I'm going to I'm going to go ahead and say this one. This line item doesn't matter so much. What really matters is going to be the name here and I'm just going to call it a generic equipment. That's going to be the name of the account equip ment. Now the detail for the equipment, I want to make sure that I keep that and give it to my tax preparer because I'm imagining at the end of the period, they are the ones that are going to need to have a detailed depreciation schedules because they need to produce them for the tax return any ways. Meaning that depreciation schedule for taxes will typically differ or may differ from the books. And therefore, I'm going to use that in order to enter our adjusting entries for the depreciation schedules. And I think that's going to be a common thing to do. So I'm going to say save it and close it. So there's our new account, no tag we're going to have here and then we have the memo. So that looks good. Then I'm going to make a rule for it, but the rule is going to be a little bit different. Let's add the rule. I'm going to say that the name of mob rule is going to be this sort of, that's going to be the name, money out. I'll take it to all bank accounts and then we'll say all of the conditions have to be met, not any condition because we're going to actually add to this time we've got the description I wanted to have the bank texts contains it contains this information. Now let's imagine this was going for like Office Depot or something like that. And I'd have to say, Okay, now I'm going to add a condition. I want to say, look, if this thing is over, I'm an amount. I want to say the amount and amount condition. I don't want it to be equal to, but I want to say look, if it's over greater than, let's say, and how much was this? 1, 0, 0, 0, let's say one hundred, five hundred. And then I want you to basically use this rule and use the expense form and apply it to equipment. And then I might make another rule, for example, that to say that if it's under the one hundred, ten hundred, five hundred and then you're going to be basically sending it to a supplies type of count, possibly an expense type of account instead of a fixed asset type of account. So you might have a rule setup like that, such as this. And then it doesn't look like I added the vendors and the vendor is going to be, this is the vendor. I'm going to add the vendor here and set that up. We're just going to save that. So that looks good tags. And then I will have the auto confirm off. You also might have this setup so that if it's over a certain dollar amount, you make sure not to auto confirm it. Right. And then if it's if it's under a certain dollar amount, once you get used to the system, you might say auto confirm that then will automatically pass through to your financial statements and you'll be catching those items and then that are over a certain dollar amount that you want to double-check as you enter them into the system. So I'm going to say save it and close it. And so there we have it. And then if I, if I scroll down to this information, we're going to see that we have these items now set up with a rule. So I'm going to add just one of them. I'm going to add the oldest one. So I'm just going to simply confirm that one and then check out what happens if I confirm that. Then let's take a look at the financials, go into the financials balance sheet first going up top, refreshing the report hold and control down, scrolling up a little bit, we can see that in the checking account, if we go into the old checking account here, we still have the decrease to the checking account in and expense type form. If I go into it, that's kinda like a check type form decreasing the checking account here. So we have that item the other side go into equipment, going back up top. If I close this back out and go back then to my reports, then the other side is on the balance sheet, not on the income statement this time this is the new thing. It's under the fixed assets because we've purchased a large thing that we need to allocate the cost over the useful life. So here's going to be that side of things. Now once you look at this side of things, just note that when you work with the accounting department at the end of the period, then you're going to want to be gathering up this type of information not and give it some more detail exactly what I purchased so that we can then put it on the books for the depreciation schedules. And then I would suggest that your tax preparer at the end of the year then provides you the adjusting entries for the depreciation expense and accumulated depreciation and the depreciation expense. That's why I would set up basically recommend talking to them, setting up your fixed asset accounts to line up with what you expect to see on the depreciation schedules in that categorization, then provide them the increases and decreases, the purchases and disposals of equipment in detail. Not just kinda like this line item, but maybe actually the purchase documentations, serial numbers and whatnot, so that when they create their depreciation schedule, they can break out and in as much detail as possible the actual pieces of equipment. Not because it's difficult to record the depreciation in the time of purchase. But because when you dispose of the equipment, you're going to want to find it on the depreciation schedule so that you could take off the related accumulated depreciation properly. And that's easiest to do if it's if it's on there in detail. So there's going to be probably less detail in our books possibly. And then the details should be on the depreciation schedules often being done with the tax software. If we go to the income statement, there's gonna be no impact on the income statement here because we put it on the books as an asset, it will hit the income statement in the form of depreciation. When we do the adjusting entries at the end of the year or the end of the month. And if I go back to the balance sheet, also just note that you might see a situation. You might say, well, that's great if I paid cash for it, what if I didn't pay cash for it? What if I financed it? What if I have a loan that's going to be related to this? Then when you see it go through the bank feeds, like you might set up a system on the bank feeds. Well, first of all, if that were the case, if you had a full-service bookkeeping system when you purchased it, you would record the loan on the books at the point in time of purchase, putting the equipment on the books at the purchase price and then recording the cash payment and then the loan. But if you're on like a cash-basis system than you and you're working with an accountant at the end of the year, you might, you might just note that you might say, Hey, look, I'm going to save the documentation for the purchase of the equipment so that we have that and we can provide it to the accountant. And we would basically tell them at the end of the year, look, I'm putting everything on there basically with regards to the bank feeds on relying on you to do the adjustments at the end of the year. So here's a piece of equipment. We purchased it. This is how much cash we paid for it. 1815. And then when you make the payments on the loan of it, because we didn't put the loan on the books. You might put the loan on the books and just show the payments that you're making. Meaning you'll have, you'll have a liability here with negative amounts to it because you're going to record all the payment to it, including interests and the principal, and then ask the accountant at the end of the year, I would like you to 2 then record the adjustment for this recording the full amount of the equipment doing the adjusting entry with regards to the purchase documentation, recording the loan on the books, making the amortization table, if necessary, and then apply out the interest and principal appropriately to tie out to the amortization table in that way. And it might be easier to do that actually because like I say, the accountants going to have to record the depreciation anyways. And it's often the case that they're gonna have to break out short-term and long-term loan principal and they might have to make an amortization table anyways, sometimes it would be easier than reversing what the bookkeeper has done and then doing it again to just say, hey, look, I'm on I'm on a cash basis system. Here's the purchase for it. I would like you to just make the adjustment based on this purchase information, put in, once again, the full price of the equipment on the books, the loan on the books, and then allocate the proper interest in principle with regards to the loan after you make an amortization schedule. So there's different ways you can kinda work out that situation with your accountant for that, but just, just some ideas that you can kinda mole over. 10. 380 Enter Transaction Purchasing Inventory Using Bank Feeds: Quickbooks Online 2021 into a transaction for the purchase of inventory with the US and help of bank feeds. Let's get into it with Intuit QuickBooks Online 2021. Here we are in our QuickBooks online bank feed, testfile and prior presentations, we set up our bank feed and started to enter transactions from basically bank fetal limbo into our financial statements. So we can see that on the transactions tap or it might be the banking tab. If you're looking at it. Ok, the left-hand side. And this is where we are when we enter the data into the system. Basically in that kind of bank fetal limbo, we've been adding items from here so that they're into our system. Let's check that out by opening up the financial statements, go into the tab up top right-clicking on it. Duplicating that tab. We're going to do that again, right-click on this tab, duplicating it again so that we can then open up our two major financial statement reports, that being the balance sheet and the income statement or profit and Loss report. We'll start off opening the P&L profit and loss by going into the reports on the left-hand side. So we're gonna go about reports on the left-hand side and then open up the P and L. So there it is. We want the Profit and Loss report. We'll do our date range change up top for my purposes, it's going to be from a 111 to 0 to 12, 31, 200. We're going to go ahead and run that. And then I'll close the hamburger hold down Control scroll up just a bit. And that's what we've included thus far, just straight from the bank feeds gonna go then to the next tab over this time, opening up the balance sheet by going to the report down on the left-hand side, opening up the BS balance sheet reports will do the date range, change up top once again. And that's going to be from a 1, 0, 1, 2, 0, 2 1231 to 0. We're going to go ahead and run that report. Here's what we have in terms of the balance sheet thus far. Now we're going to be thinking about inventory. Inventory is going to complicate matters a bit, because usually inventory is going to be on an accrual basis. Let's first jump over to our flowchart. This is going to be on the desktop version. You don't need the desktop version to follow along. But we just want to show you the flowchart that's going to be on it. Now if we think of inventory with a classic perpetual type of inventory system where we're actually tracking the inventory through the system. Then of course it would be going on both the vendor or purchasing side and on the customer side when we sell the inventory, on the purchasing side of things, we might have a purchase order, but we would then enter a bill most likely. And then we're going to be paying for the bill with basically a check paying for the inventory. When we buy the inventory, we're going to have to put it on the books as an asset. That in and of itself is basically an accrual type of thing because even if we paid cash for it, instead of expensing it, we put it on the books typically as an asset, we also might be tracking that inventory not only in terms of dollars that we paid for it, but also in units that we have so that we can sell them and track the cost that we sell it using some flow assumption, such as first-in-first-out, last in, first out or average. Then on the customer side, we sell it either with a create sales receipt or a I'm sorry, an invoice or a create sales receipt. And these two forms would then be making the sale, the invoice, increase in the accounts receivable, they sales receipt going directly to cash or an deposited funds. And then the other side would be decreasing. We would have a decrease to the inventory and record the cost of goods sold with these forms as well. That's kind of where the complication happens here because in order to use that perpetual inventory system, you have to set up inventory items so that the QuickBooks system can track the inventory by unit and then make this allocation as we create the invoice and the sales receipt, and then we would receive payment, make the deposit. So where did the bank feeds fit into this? Now, notice what we just went through. It's kinda like the full service type of inventory. If you're using a perpetual inventory system, which many people, when they first hear inventory, they just figured that they have to do that. But that's not necessarily the case. You don't have to use an inventory system that's going to track everything through QuickBooks. You might have some other system like a periodic type of inventory system that you might use that might make it easier for the, for the inventory to be tracked using basically bank fees. So you can kind of simplify the system if you have a smaller kind of company in order to do that. So let's go from the easiest thing to just be more reliant on bank feeds to the more complex full-service kinda inventory and think about your options if you have inventory. So the most to do with inventory is to steal, basically use a cash-basis method even though you have inventory. So check with your accountant if you can do this or not. But the idea being that if you have a limited amount of inventory, you're not holding onto a lot of inventory and possibly you're just purchasing something and then selling it. You had like a just-in-time type of inventory system, possibly contractors and whatnot that buys stuff and then they sell it, you know, pretty close to in the same timeframe. Then you might just say, hey, look, when I buy it, I know I should be putting it on the books as an asset of inventory, but I'm going to sell it quite quickly. And the easiest thing to do would simply be to record it when I purchase it as cost of goods sold at the point in time of purchase. When you do that, that means you're recording. Instead of recording that as inventory, you're basically hitting the expense before you have used it really to help you generate revenue. Because normally you don't record the expense to cost of goods sold until the sale has been completed with its width, which is done typically when you create the invoice or the sales receipt. In this case, you would be recording the inventory before you create the invoice and the sales receipt. And then when you create the invoice or the sales receipt, you would not be turned in on the tracking of inventory. You would basically be used in an inventory item just as if it was like a service item, meaning when you create the invoice, it would be increasing the accounts receivable. The other side would be go into sales. It would not be recording any decrease the inventory or cost of goods sold because you're not going to turn that on because you're not tracking inventory within the system, but rather using a cash-basis system, expensing the inventory when you purchase it, meaning you expense did up here when you purchase the inventory and never put it on the books as an asset. And then when you make the invoice, you're not going to decrease inventory. You don't have to worry about that. You're just going to record the sale side. So that's going to be the easiest thing to do. And then obviously when you pay for the inventory, if you were to do that, then you can use the bank feeds and you can just pay for the inventory possibly electronically and then just record it as cost of goods sold when it clears the bank. And that would be kind of the easiest method to do, but it won't work so well if you have inventory that you're holding onto. So if you're in a type of business like a business where you're holding on to inventory for a longer period of time, then you should be tracking that inventory as an asset, not recording the expense until you sell the inventory. So the second method that you might use is to say is a periodic inventory system. So once again, instead of using a perpetual inventory within QuickBooks, tracking inventory within QuickBooks, you can use an Excel worksheet or something to track the units of inventory that you have. And then when you buy the inventory, you can use the bank feeds and then buy the inventory. But instead of putting it to cost of goods sold, you just put it on the books as an asset of inventory. Then when you make sales, however, you're not going to make a sale and try to, try to use the perpetual inventory system to decrease the units of inventory within QuickBooks because you're not going to turn that on. But instead you count the inventory in a worksheet and then you make adjustments either daily, a weekly, or monthly, basically counting the inventory that is left compared to the inventory that you purchased. The difference between how much you sold and then you can make it a periodic adjusting entry recording the expense, cost of goods sold and the decrease to the inventory periodically. So that would be the second kinda easiest method to use so that you can kind of integrate bank feeds into the system very easily. And then of course, the third method is a full-service bookkeeping system, in which case, you can't really depend on the bank fee to record the increase in the inventory because you have to use inventory items. So if you turn it on inventory and tracking inventory in the system, then you have to enter the bill at least before, before you can match out what goes through the bank feet. So you'd into the bill and then you purchase the inventory, you can match the bill then to the purchase of the inventory that would go through the bank feeds. And then when you make the sale of the of the invoice, you can then use the inventory tracking feature to decrease inventory as we go. So let's look at those methods now in QuickBooks and we'll kinda just run through them quickly with the bank fees. So we'll start with the easiest transaction where we're just going to expense the inventory and then just expense it as we go. So I'm going to pretend that these primary aka ones are going to be inventory here. So I'm going to sort it by description, hold down Control, scroll down just a bit. And I'm going to go down then to the primary aka items. These three, I'll choose the oldest 1 first. So let's just use this 1 first. So now notice that tried to pick a vendor primarily life, but I don't want primary aka life this time I want primary CA, so I'm going to update the vendor here. To that. I'm going to say tab. Let me do that again here. And then tab and see if we can set up this vendor. I'm going to save the vendor. So there we have it. And then the expense that I'm going to have, I'm going to take it directly or cost of goods sold. So I don't have There it is. I got cost of goods sold right there. We're going to take it to the cost of goods sold account expensing it directly as we go. No tag memo is good. I'm not going to create the bank rule because I want to test out the other methods after this point in time. So that would be the easiest thing to do. I'm just going to go ahead and confirm vat. And so there we have it. And then if I was to see what happened, if I go to my banking then to my balance sheet, I should say, and scroll back up top run the report, hold down Control, scroll up just a bit. We're going to go into the checking account. We've got this decrease for the primary PKA, for this amount. The other side go into cost of goods sold, that's on the income statement. So if I scroll back up and I go back to the other side to the income statement and then refresh this report, running it. There's the cost of goods sold. So I recorded that before I made kind of any sale. And then if the sale took place later, as long as it's close in the time period, then I can imagine, okay, what would happen when I make the sale? So let's open up another tab. Right-click on this tab, duplicate it. And let's pretend we're gonna make a sale within an invoice now and it happened at a later point in time. Then I can go to the plus up top. I'm going to create an invoice. And this is going to be on sale item and we're going to sale the cell that thing that we purchased, which we already expense. I'm going to just say it's going to go to customer one. Customer one. And we'll set up that customer closing this out and setting up the customer. I'm just going to save that customer as is. And this happens on, we're going to say the date here is going to be 0 715 Tuesday. I'm not sure if that's very close to what it should be close in time to if you're using this method. But in any case, and this, I'm going to say item one. Now I'm going to create an item here, but I'm not going to create an inventory item. Even though we're selling inventory, we could use basically non inventory. I'm just going to create a service item. That means that it's not going to try to track on a perpetual basis the inventory within the system because we're not basically tracking the inventory in the system. So this is going to record just the increase in the accounts receivable and the other side then go into the sales side. So I'm just going to call it Item 1. It's going to be the price. Let's just say the price is 300 dollars. Sales is going to be the other side. That's going to be our sales account. Let's say we'll call it sales are, and then we'll say save it and close it. And so this is going to increase accounts receivable. The other side go into sales. Nothing happened with inventory here because we're not using a perpetual inventory system. Save it and send it. Well, let's just save it. Not sending because I don't have an email address. And then if I go back to the balance sheet and run this report, now we've got the accounts receivable here. And the other side on the income statement, the P and L on the income statement, there's the sales things oftentimes would be recorded with the invoice if you're using a perpetual inventory system. But in this case we've recorded the expense beforehand and then record the sale after word. Alright, let's do the second method. The second method, meaning we're gonna, we're gonna put the books. We're going to put it into inventory when we pay for it. So I'm going to say, all right, let's hold down control and say, what if I want to track the inventory, but I want to use a perpetual or periodic inventory system, count the inventory myself instead of tracking it within QuickBooks. So then I can say, all right, let's do this. Second. Prime America. And it's not going to go to cost of goods sold this time. It's going to go to Inventory. So inventory, right there, inventory. So now we're going to put it into an asset of inventory. Again, I'm not going to save the rule because we're just testing this out. So I'm going to save it in inventory. And then I'm going to scroll up and say, All right, now if I go to my balance sheet and I run this report, we've got the checking account should be going down and the other side is increasing the inventory, no effect on the income statement at this point in time. What we would do then is just keep tracking the inventory as it goes up on a separate sheet, possibly an excel sheet because I'm not tracking the actual units within QuickBooks. And then at the end of the day, the end of the week or the end of the month. We will use our Excel sheet to track the units that we had, the units that we purchased versus the units that we sold. And then on a periodic basis, we will just do a journal entry. The journal entry then decreasing the inventory for the cost that we sold, because we're going to do our cost of goods sold calculation beginning inventory plus purchases minus ending inventory gives us our cost of goods sold. And we'll do that calculation on a separate worksheet. So we're not tracking it within the system on a periodic method. And then we'll do a journal entry which will decrease the inventory that we sold. And the other side's gonna go to the to the income statement over here to cost of goods sold. So once again, under that method, when we make the sales items up top, we're simply going to record a sale up top. And it's not going to be tracking perpetually within the system. And then we will do a journal entry periodically in order to record the cost of goods sold. That allows us to do the bank feeds to always record the increase into the inventory. But then we have to track that in some way on a separate sheet, excel or something like that. So that way, we can then do our cost of goods sold calculation, beginning inventory plus purchases minus ending inventory to figure out our periodic adjustment decrease in the inventory and the cost of goods sold. So that's method number 2. Method number three is to track the inventory within the system, which means you've got to deviate from a basic method of, of cash-basis method. So in that case, we'd have to put it on the bill because notice if I go back on over to the first tab, and we try this again. And let's say I want to put it into inventory here again, but I want to track it within the system. I can't really do so here because I can only put it into inventory directly. I can't track it to an inventory item, which is what QuickBooks needs in order to properly track the inventory. So in that case we're going to say, all right, well, let me first go to the first tab and say, let's add a bill for the inventory and then see if we can match the bill. Or we could do an expense form if it wasn't expense for and then we could match it out to what goes through QuickBooks. So in this case we can use a matching type of format. So I could say, all right, let's turn on it. We're imagining we have inventory turned on now. And we're going to say, let's say that we have a bill form that we're going to enter which will increase accounts payable. And the other side in this case go into an inventory item. This is going to be van door or van door 1 or let's say its prime America, sorry to say this. For America. And the terms, we'll say 30. And then the day we're going to say this is on what did we say? 7, 17, we'll keep it there. Seven, 17, 2020. And then we need not the category here, but now I need an item, I need an inventory item. So I'm going to add an inventory item this time. This time I'm going to make it an inventory items. So I'm gonna say inventory or three item. These are the things that we sell. I'm going to set it up this time, not as a service, but an inventory item. I'm going to try to spell it right? Not that I care that much. And then we're going to go down and say inventory item. We'll say this is for $400 and this is gonna go to product sale of product income. And then the purchase will say 400. And then the cost of it, we're going to say is this amount here, $30 will say $30 and just costs and we're selling it for 400s, quite a markup. And that's going to be the cost of goods sold. Now I'm not going to turn on any sales tax or anything here. We're just going to keep it as it is, so I'll save that. And they want to start date. So I'm going to say how many on hand, 0 as of January? Let's say January or 2020. 0 on hand. And so I'm going to say save it. So now we have our bill on hand, right? So we've entered the bill. I'm going to close this back out. What that does is if I go to the to the balance sheet, run this report. Now we've got our accounts payable on the books, and we now have the inventory. This time it's tracking the inventory, put it into another account called inventory asset. It's tracking that inventory and we have the detail of it. Tracking it, meaning we got the subledger. So if I go back to the tab to the right, for example, reports down below. And I take a look at the inventory reports now, meaning I go to the inventory inventory valuation summary, for example, then it should give me there's more unit of inventory. Now we're tracking it perpetually within the system. So then when my bank feed comes through, now I'm going to say, I've got this $30 that was paid. I'm going to match it now. And sometimes QuickBooks will do it automatically if I already had this transaction in place. But I can say now I want to find a match. I'm not going to use this to record a transaction or I will, but I'm going to match it up to the bill. Here's the payment that's going to match up to the bill. So this payment then is going to reduce the amount of the bill that we had. And that means the accounts payable is gonna go down in the other side, will be decreasing the checking account. So let's see that if I save this, then we're going to save that item. And then I'm going to go back on over to the balance sheet. Let's refresh the balance sheet. Hold down Control going to scroll up just a bit. And then if I scroll down to the accounts payable, it's back down to 0 now. So now we've matched on our bank transaction here. So it was a bill, Bill check now, so now we use the bank feeds to match out the bill check. And then if I go back up top, it's going to be a decrease to then the checking accounts. And now we're tracking the inventory this way in the system, but we had to use a matching feature a little bit. We couldn't just rely on the bank feeds to build the books. And then when I make the the invoice, then if I was to make another invoice go into the first half, for example. Now this let's make one more tab. I'm going to right-click on this tab, duplicate it again. And now let's make an invoice and say we're going to sell this thing and we'll see it go down. So I'm going to make another invoice and track this. Hold down control and scroll down just a bit, bring it down to that 100% again. And let's make this customer to this is going to be customer number 2. We're going to set up customer number 2. Actually, I got customer number one, this customer number two, totally different person. And so we'll set that up. And let's say we sell it on like the 20th, let's say. And this is going to be our inventory item, inventory item for 400. Now when I record this is going to do more than the last invoice we recorded one. It's gonna it's gonna do partially the same thing. It's going to increase the accounts receivable. The other side go into sales, but it's also going to be decreasing inventory and recording the cost of goods sold. Because now we're tracking the inventory in QuickBooks using a perpetual inventory system this time. So let's save it and close it. Save it and close it. And then we'll check that out by going into the balance sheet again, balance sheet. And let's run that report. And so now that inventory item has gone back down to 0 and it did so with the invoice because now we're tracking it with the invoice. We're doing a full service system this time. Going back on over the other side, went to the to the income statement, refreshing the income statement. We see then that in the sales of the product, there's the 400 with the invoice and then we have the decreased to the inventory item, back to the balance sheet. Inventory item should go back down to 0. It was the second one with the second method. So it went back down to 0 here because we sold it. And it did so with the invoice. So we decreased it with an invoice. And the other side went to the income statement in the form of cost of goods sold, and it did so once again with the invoice and note that that $30 is not on the invoice. So if I go into the invoice, we don't have that $30 there. Nowhere on the invoice but the invoice knows about it because this item is what tells QuickBooks what the amount is and how to track it using the perpetual inventory system, closing that back out. We also know that on the subledger for inventory, this should go back down to 0. If we refresh this, it goes back down to 0 because we sold the inventory. So there's just some thought to be on on the inventory. Just note you don't have to use, like the full service inventory within QuickBooks, you could use some kind of other method of a periodic method instead of the perpetual method, or even try to use a cash-basis for inventory, but check with your accountant first before, before moving forward with either of those. 11. 385 Enter Transaction Purchasing Investments Using Bank Feeds: Quickbooks Online 2021, the entire transaction related to the purchase of investment with the US and help of bank feeds. Let's get into it within two. It's QuickBooks Online 2021. We are in our QuickBooks Online that bank feed testfile and prior presentations we set up our bank feeds, started entering transactions. We have the information in the transaction tab, which might be called the banking tab. On the left-hand side, these are the transactions which are in what I would call Bank fetal limbo that we need to be then adding into our financial system. Let's take a look at our financial statements by going up top and duplicating our tabs, right-click on the tab up top, duplicate it. Then we're going to do it again, right-click on the tab up top, duplicate. It will be opening up our profit and loss and the balance sheet we're in the reports on the left-hand side, we'll start off with a P and L, the profit and loss, the income statement. We're gonna do that date range change up top from 0, 1, 0, 1, 2, 0 to 12, 31 to 0, running that report. Then we'll close up the hamburger hold down Control scroll up just a bit to get to that one to five per cent. Next tab to the left, we're going to go to the reports on the left-hand side at the bottom. Then we'll be opening up the balance sheet report that good old BS balance sheet reports. We'll do the date range change up top once again, starting at the beginning point of a 10120 to 1231 to 0. And then I'm going to run that report will close up the hamburger. Now we're going to be talking about tracking investments in things such as mutual funds, stocks, and bonds. So first thing we want to basically point out is the difference between your business account and possibly your personal account and how the investments might relate to it. So note that obviously QuickBooks can be used for tracking business information. It can also be used for tracking your personal financial data. It is also possible to use one QuickBooks file to do both with the help and use of class tracking. Although many accountants would recommend to have two separate accounts if possible, or to separate QuickBooks files to do that? If possible. But it is, you can't do it with one with the use of class tracking. We'll talk more about classes in the future. But whatever your system is, just realized that on the business side of things, if you have a business account in QuickBooks, for example, and you have your personal bookkeeping, then whatever's on the business side of things on the assets typically is something that you expect to be using in the business in order to generate revenue. So that would mean that you're probably not going to be unless you're in the business of tracking stocks and bonds as your business, having a whole lot of investments on the business side of things, you might want to have some short-term investments so that you can be holding it somewhere else and then be transparent it back to cache to use in the business when you need to. If your business accumulates a cash up and you have extra cash than you probably in tracking within the system wants to take it out of your business bookkeeping, transfer it to your personal bookkeeping with the format of a draw. And then whatever your personal bookkeeping is, then you could do that in QuickBooks as well. Track the investment in, in that, in your system on the personal side. So just from the business to personal with investments, that's how you kinda wanna think of it. The assets that are in your business there to help you to generate revenue in the business. If you have a lot of cash in your business and you're thinking about investing it and you don't need it within the business, then you might be wanting to give that to yourself in the form of draws, which are the owners, so that the owners could then invest it in something like stocks and bonds, which they can still track in QuickBooks if you so choose track in your personal data. So that said then, how do we, how are we going to track the investments in the QuickBooks system? So note that the QuickBooks system is not really designed to track day trading. So you're not really going into QuickBooks, so you can track that daily activity that increases and decreases in the market on a daily basis. What you can do within QuickBooks is get a period of time, adjust your financials basically monthly or possibly every statement to give you where you stand on the balance sheet and then your activity related activity in terms of gains and losses periodically as of a point in time. So that's what you wanted. Do you want to track the detail possibly in some other software if you're really into tracking the daily increases and decreases, look for software that's designed to do that. The QuickBooks system is designed to tell you where do you stand on a financial statement basis? Periodically, and then take your take your data that you're going to get on the financial statements at the end of the month or year, put them into QuickBooks. Also note that you probably do not want to be putting within QuickBooks a whole lot of detail in terms of the types of investments that you have. Meaning. You might want some limited groups. Meaning you might basically group your information in QuickBooks by the institution, like you're investing in an E-Trade versus your bank or something like that where you have stocks and bonds in that area. And then, and then just have that total on the QuickBooks system, the more detailed information then possibly using other software in order to track the detailed day-to-day activity. Otherwise, it will be quite burdensome to enter the transactions that the increases and decreases on a periodic basis. So you can't add more detail and QuickBooks. But then to update it periodically will be. Take longer. You might also track it by long-term investments versus short-term investments just as a general category, or you might track it basically buy stocks versus bonds. It would be nice, however, to track it in the main categories that are going to be shown either on your financial statements like stocks versus bonds, ETFs or something like that. However, they group it on your financials so that you can quickly update it periodically, monthly or yearly and then have the statements that will provide you then the more detail. So that's the general concept that we're going to be put in here. Then I'll have with the bank feeds fit into this. Well, if you take money out of the checking account and you put it into the investments, then that's going to show up on the bank feeds. And we can take those bank feeds in, enter that into the accounting system. So let's try that. Let's try. We're going to go over to the first tab here and then we're going to go to these transactions. We're going to go back to these prime America had transactions and say this time that these transactions like these two items here are going to be investments. We're going to say in mutual funds, and we'll say that they're actually with Prime America. So we're going to close this back out. And let's take these and say these are investments to this time. So I'm going to select this item, and this time I'm going to try to change it again because I've primarily go into cost of goods sold. I'm going to change the name a little bit to what do we have primary 01 ACH. Let's try that. Primary one, ACH. Pick that up tab, and then I'm going to save that. And it's not going to be going into cost of goods sold this time. I'm going to put it into an investment account, so I'm gonna go back up top. Probably don't have one, so I'm going to add an investment account. Now. I'd like to make it a syllable count of another account which I'd like to set up so that I can kind of break out the sub account, but I cannot add another account as I had this account. So before I do this, I'm going to close this back out. I'm going to create a new tab, go to our trial balance, and then I'm going to add a parent account there. So I'm gonna go to the tab to the right, right-click on it, duplicate this tab. I'd like to then go into our chart of accounts. So I'm gonna go to the chart of accounts on the left-hand side will go down to the accounting area. Accounting area. And then we're looking for the chart of accounts. I'm going to add another account in here. So I'm going to say let's add a new account in the chart of accounts. This is going to be an other current asset. So it's not a banking account, but it's an other current asset account and it's going to be an investment account. I'm going to say investments other so I'll keep IT investment other. That'll be the parent account. So I'm going to save that. So now we have that as the parent. Now if I go back to my bank feeds back to the bank feeds all the way to the left. And I'm going to say now I want to set up another category which is an account, add a new one. It's going to be a sub account then of the investment investment account. So sub account they're the type of account is going to be an other current asset type of account and it's going to be on investment. But I'm going to make it more specific and I'm just going to call it prime America. And that's going to be the name of the institution. We're gonna, we're gonna say that's the name of the institution which will be under the sub account of investments. So then if I had multiple institutions, like an E-Trade or something like that, That's how I can sort it. And then I can take my monthly statements and give a summary of that information that will be sorted on those monthly statements. So I can say all right, let's save it and close it. Let's see what happens in terms of the chart of accounts. Now if I go to the chart of accounts over here, close up the tab. Now I've added another account to it. So I have the investments. It's not quite there yet, so let's wait till we record it. So then I'm going to say that looks good. I'm not going to add a rule. So I'm going to say save it and close it. So confirm that. Then I'm going to go back to my Chart of Accounts and I'm going to refresh it this time I'm going to hit the refresh button. And then I'm gonna go down and see now we have the investment with a sub account of primarily underneath it. What will it look like on the balance sheet? If I go on over to the to the balance sheet over here and refresh this report, run it again. It's going to decrease the checking account. And now we've got this investment parent account with the sub account underneath it for America with the $50 underneath it. So that's how it would recommend tracking it. Now, you have this other problem here with these investment accounts. If you just started the investment account, like the bank feeds now, and you already had some items in the investment account. You have that beginning balance problem. So we might have a beginning balance that we would have to add here to basically get this backup to the stance as of this point in time that's of this investment or as if the first financial statement that we're putting into the system. So let's pretend there was a 5000 beginning balance before we added this more, this more amount is $50 into it. So in that case, I'm going to go to the tab all the way to the right and I'm going to try to add that beginning balance I'm in primarily here. I'm going to use the register. We're gonna say, let's open up the good old register, then add another transaction, and let's make it then we can add it to be they have deposit type of transaction that should work. So I'll say deposit. And we'll put this in there as of the, let's say the beginning of the year as they 0, 1, 0, 1, 2, 0. And we're going to say that this is going to be, I'm going to call it the beginning balance. And it's going to be an increase. I'm going to say 5000. That was the beginning balance in the statement. We'll say now the other side, the question is, well, where does the other side go then it's not income. It was there before. It's going to wash out into equity in some way, shape, or form. So the other side will typically go to some type of equity account. It's a sole proprietorship. It's fairly straightforward. You can put it to the owner's equity or to the investments. I'm going to put it into basically the owner's equity account here. If it's a partnership, then you've got to figure out a little bit more in depth on what partner balances accounts should be. But in any case, I'm going to save that. And then we'll go back to the balance sheet and check it out again. Let's run it again. And so now we're at the 5050, we enter this transaction here. There's the deposit. Other side go into the equity account, which we could see down below. So there's going to be the increase in the owner's equity for it. So now we have it on the books. Now the next problem that you might have is to say, okay, well, what happens when, like over time, the value of my stock goes up or down, and I want to track the value of it going up or down again, quickbooks won't do that like on a day-to-day basis. You don't wanna do that daily in QuickBooks, but you can't use it to do it periodically. Maybe let's look back at the end of the month or something like that. You can adjust your books to the fair market value. So note that investments, you can look at financial accounting on the rules of when you're going to win, you should make these adjustments. So I won't go into that in depth, but just the basic idea would be that like for the fixed assets down here, for example, we don't typically adjust based on the fair market value because it's hard. You have to have an appraisal of an appraisal to know what the fair market value is when you sell any equipment or a building or something like that, because it's unique in nature. But here we're talking about primarily for investing in publicly traded stock trading all the time. So when we look at the stock market and say this is the value of the stock. When we get our bank statement, they give us the value of the stock. They're basically giving us an appraised value. That's pretty accurate based on today, that day because that's what they're trading for. So you would think then it would make sense for us to revalue our investments to the current market value even though it will fluctuate over time. So we could say, okay, I got the current statement, I need to revalue this. I would like to re-evaluate it periodically. Let's say it went up to $6 thousand and it just increased in value. Well, then I would like to write this up to 6000 to reflect my assets here, reflecting the 6000, but then what does the other side go? Now, you'd say it's an its income, it would be income. But really we haven't realized that yet because we haven't sold it at that point in time. And that's where kind of the question comes in. So there's two ways you can deal with the income. You could put it on the income statement as income, or you can put it basically in the equity section as unrealized income. So if you put it in equity, you're basically, that's more conservative thing to do. You're basically saying, Hey, look, I know it's income, but I mean, I had an increase in value, but I haven't realized it yet. So I'm going to put it in here in the equity. I'm not going to recognize it in income until I sell it. And that's when I would recognize it in income. But the easier thing to do is just recognize it in income when you record it. And what I would suggest doing is putting it This is your business account or even if it's your personal account, you're tracking your personal income, you might want to put it at the bottom of the income statement to show that it's unrealized, meaning I'm going to put it into other income. I'll put it in the other income. So it shows up at the bottom, even though it's an income line item. So for example, let's say this went up to 6 thousand. I'm not going to see that in the bank feeds, but I'll see that on my bank statement for Prime America and then I'll adjust this to 6000. So let's see how that would work. We'd say, okay, let's go to my register again. I'm going to, and then I'll pull out that trusty calculator. So we'll pull out the trusty calculator. I have my keyboard's back. My keyboard was out of function and it's got a calculator button on it. And then now it's back. My best good keyboard here. So then we're going to say now it's worth 6000 according to the statement, minus the 50 to 500, we have a 950 unrealized gain. So let's say this happen as of O 731, 200. And I'm going to Sarah gain or what? I won't mark it off you put might want to put the statement date or something here in the memo. And then I'm going to say this is going to be an increase of 950. 950. And then the other side, I got to put to some gain. I'm going to put it to an income account. So I'm gonna make another account to do it. I'm going to call it not just normal income here, but other income. I'm going to put it on the bottom. And then I'm going to say this, they call it dividend income, interests, other investment income, that looks good. But I'm going to call it game slash loss on investment. That way if it goes up or down, I can hit the same account with it. And if it flips to a negative number, it'll be a loss. An otherwise it'll be a gain. In an otherwise, I have to have a separate account for the gains and losses. I don't want a separate account. I want this one to be recording the gains and losses too. So I'm going to say it's again slash law. So I'm going to say save it and close it. And save that and then check it. Let's check that out. So that's not a bank fee transaction, but that's how we can kind of track the investments here. If I go back to the balance sheet and I run it. So now we've got our 6000 here, 6000 and there it is. And I probably should have recorded this one, not with a deposit but a journal entry. But the same kind of thing happens here because really, obviously it wasn't a deposit. It's an it's an adjusting entry. But then the other side is going to go to the income statement. And if I take a look at the income statement now, then we've got the income, but it's down here at the bottom. And that's useful because it's saying, hey, look, this is my income from normal operations up top. Here's my operating income. And then I've got this other income. That's not even really income because I haven't really even sold it. And we might call it instead of gain or loss, unrealized income on investment that would say, hey, I haven't sold it yet. So that could be another indication, but I'm going to put it down here on the bottom for that reason. So then this is going to be my income, including kind of a weird stuff that happens at the bottom. But if you want to value my performance business-wise, then you want to be stopping here at the net operating income. 12. 390 Enter Transaction For Owner Withdrawal or Personal Payment Using Bank Feeds: Quickbooks Online 2021, enter transaction for owner withdrawal or personal payment with the help and use of bank feeds. Let's get into it within two. It's QuickBooks Online 2021. Then here we are in our QuickBooks Online, big feet test file and prior presentations, we set up our bank feeds. We've got some information in the bank feed limbo area which we are now adding to our financial data. Let's check it out in the transactions tab, the left-hand side, which might be called the banking tab. We're going to be then scrolling down. This is the data that we have thus far. Let's open up our balance sheet in a new tab. I go into the tab up top, right-click on it and duplicate that tablets also open up a P and L profit and loss duplicated this tab up top again, right-clicking on it. Duplicate. So we're going to open up then the P&L profit and loss and then the balance sheet. To do so, we're going to go to the reports on the left-hand side, we're going to open up the P and L Profit and Loss report. Then we'll do a date range change up top, changing it from 0, 1, 0, 1, 2, 0 to 12, 31 to 0. Let's run that report. Close up the hamburger hold down Control scroll up just a bit to get to that one to 5%. Then we're gonna go to this second tab on over to the left, open up the reports once again, this time opening up the BS balance sheet reports, then closing up the hamburger range, changing this one starting at a 10120 to 12, 31, 200. We will then run that report. Now we're thinking about a situation where money is coming out, but it's for personal use. So either the owner took the money out directly for personal use or spent the money for something personal. When we're thinking about the business records, how do we deal with that on the bank feeds type of transaction? This can be confusing because it's that separation that deals with the separation between the business and the personal. And remember, there's couple of different ways we can track the business and personal. We want to have that separation between the business and personal, but we might use QuickBooks to track both the personal and business accounting. We could do that with two separate QuickBooks account if we so choose. Or we could do that with class tracking, for example, in the same QuickBooks account. But the idea, whatever we're going to be using is that we want to have a separate business, financials, so that we can then use that for financial reporting purposes, for our decision-making and for the tax preparation, and then possibly have another account for personal for personal decision-making purposes. So what happens then when we take money out of the business? Now hopefully what happens in general is the generates revenue. The revenue results in cash rising up, and then we're going to take the money out of the business, take it out of the checking account and move it over to the personal side of things where we will then write personal checks out of the personal side of things. Doing that then allows us to clearly see the audit trail of the increase in the checking account for the business side of things and then it leaving the business to go to the personal account in the form of a draw, which we'll see down here in the equity section, which will not have any impact on the income statement for the business side. And then it'll go into the personal side of things and then whatever we spend it on, vacation, restaurants, groceries, whatever. Then we track that on the personal side of things. And that's going to be the most straight forward kind of cut between the business and the personal. However, It's possible that you're dealing with someone if you're a bookkeeper or yourself and you're saying, hey, look, you know all my money, I'm not that organized to transfer it over. So possibly I'm making payments out of my business account that are for personal use. What if I took money out of the checking account and I paid for a trip to Disneyland or something with it, which clearly wasn't a business type of thing. What do I do at that point because it's going to come out of a checking account. Well, you could still do the same kind of activity. Meaning you're gonna go into the bank feeds and say, Okay, now it came out of the checking account. But instead of me recording it to an expense called like Disneyland expense or something, we're going to record that payment that was made directly to a draws type of counts gonna go to equity down here in some way. So then it'll come out and go into the into the equity account. So it'll it'll look kind of similar, but but you won't have as much detail that way. There's a couple of problems with that. One is that it's more confusing to do that because then you've gotta go through all of your expenses and kind of figure out if it's business or personal instead of just basically saying everything that's coming out of this account is business. And then everything that I want to be personal, I'm going to take out of the other account, which is personal, and the only transfer between the two will be a draw from one to the other. If you have someone else doing your books like a bookkeeper, it also makes it much, much easier if the bookkeeper does not have to try to determine whether an expense is personal or business, meaning you'll want to set it up so that anything that's a draw, it's going from one account to the other, can simply be put into draws here. And the bookkeepers not trying to have to pick and choose whether or not a particular expense item should be on the personal side or the business side of things. So that also that if you basically pay for like Disneyland or something out of your business account, then you're going to basically put it to the draws account. When you put it on your business account and you're not really tracking that detail. It would be better if you had been under a like a personal QuickBooks file where you're tracking the vacation expenses are Disneyland expenses. If you spend it, particularly on that. Instead of so that you can actually track the detail for it. So let's take a look at some examples of this. I'm going to go to the first tab and we're going to go back into our bank feeds here I'm going to hold Control scroll down just a bit. And we'll start with one. These two, we're going to say that these are drawings that are coming out. And you could have a system like this where you have an electronic transfer, something like that, that's taken money out of your business account transfer and it possibly into your personal account with the assumption that your cashflow is going up, right? We're assuming that our cashflow is going up. We're taking a periodic amount out of our business account. We're transferring it to the personal account so that we can then use it in the personal account to spend on whatever we want out of a personal account. And then if we so choose, we can track the personal account by expense item tracking groceries and whatnot on the personal side of things. And that would make it very clear and very easy for you and or a bookkeeper to track. So that's kind of our first method. How would we do that? Well, we would see it come out of the, out of the checking account on the bank feats here. And we would just say, Okay, that's going to be going into the personal account. So I'm going to hold down. Let's say we've got the transfer here and the amount is going to go to the owner's personal. So notice it guessed the right area here. It's going to go to the owner's personal expense equity type of account, we might call it draws QuickBooks tries to be more descriptive. I think it's trying to basically tell us, hey, look, this is going to be an account that that could be a draw or it could be personal payments that you may that you want to make sure to put to an equity account and not to the income account. Also note that it gets into the, uh, transfer over here. I'd rather just go to the regular category on the first tab and then do our normal kind of expense type of format rather than a transfer form typically. And then I'll put the vendor is not really a vendor. It's going to be us, we're going to be the owner. So I'm gonna say owner. We might put our own or name. We would set that up as a vendor. Even though again, it's not really a vendor, but you've got vendor or customer Azure choices. If I set it up as a vendor that I can kind of track the payments that have been made by vendor as well. And then we have the category over here, which once again it guessed correctly, it's gonna go to the owners pay, which is basically a draw. We don't want it to be going into an expense account. If we make it go into an expense account, it's going to hit the income statement. And we're basically going to be like deducting expenses for tax purposes. It would result in S Basically, I haven't an expense for something that's not an expense which could distort our income statements. So we want to make sure it's a draw type of activity. And so that's going to be it. And then I'm not going to make a rule out of it, although we easily can, because I want to look at the next one and just analyze the next one as we go to the next one. So I'm going to say confirm. And then let's go back up top and say, now let's go to the balance sheet. Refresh the balance sheet. We're going to run it, hold down Control scroll up just a bit, we'll go into that checking account. Then we see the decrease for the draws of that 75. 75 right there scrolling back up, then the other side is going to go not to the income statement, but down here to the draws accounts. So it's coming out of a draws account, which we called owner's pay and personal expense. So there it is, decreasing the equity account, no impact on the income statement. That is the point. So that then once you get it into the personal account, then you can have another QuickBooks file basically that you're tracking your personal expenses on. Or again, you can use class tracking if you so choose to do it in one QuickBooks file. But, and we'll talk more about class tracking in the future. We have class tracking course if you want to take a look at that. So now let's do it again and let's just kind of imagine, well what would happen. I'm going to do it with the same transaction with a seventy-five dollar transaction. But let's just imagine that this was not a transfer. I'm going to hold down Control, scroll down just a bit. Let's imagine I'm gonna go to the Category tab. Let's imagine that it was payment for something else. So let's say it wasn't a payment here. That was a transfer, but we pave like Vaughan's for it or something like the grocery store. Vaughan's that how you spell Vaughan's. And then I'm going to save that. And I'm going to say, well, if I pay Vaughan's, then that's not usually going to be a business expense. That sounds like a personal expense because it sounds like groceries. But I can't put it to like an expense over here because it's not a business expense, it's a personal expense. So we would still be taking it to the owners pay. So that means I paid a vendor but the vendors, not a personal vendor, but I paid it out of the business checking account. The vendor is not a business vendor, but I paid it out of the business checking account so I can't write it off to an expense. I'm just I'm just going to write it off to the draws again account which they call owner's pay and personal expenses. And that basically it's doing the same thing as if we took it out as a draw, amazing cash and then paid it out of the out of the personal account, at least on the business side of things. The problem with this, of course, is that you're not getting the detail. You're not getting the detail of a personal side of things because this will kind of be right on the business side of things. But it would be nice if you took it out as as Draw and then paid it out of your personal checking and possibly tract it in your personal Quickbooks account and then you can kind of track your payments for groceries and stuff if you want. In that way as well. It's also, again, kind of a problem because if I'm a bookkeeper and I don't know if that's business or personal, then I'm going to have to ask and we'd have to call the client and be like, okay, you paid bonds, is that business or personal? So we're not going to make a rule this time either. Let's go ahead and record it and then jump over to our financial statement. So I'm gonna say confirm and we'll have a similar kind of outlook here. We're going to go back to our balance sheet. And then I'm going to freshen up the report, hitting the Run Report hold down control. I'm going to scroll up, select that one to five. And then of course we have the checking account here. So now it's been added to the checking account line item going into that, when I hold Control and scroll back down again so that we have our two 75's that are coming out of the checking account have now been included. Other side then back to the summary is going to be in the equity section down here, and we put it to the owners, pay and personal expense. So there we have it. So same kind of process here, but once again, you don't have that kind of ability to track that personal information as you might want to do if you had another QuickBooks file or use class tracking, then you can track basically the bonds that groceries that you spent the money on or something like that. And that might be useful to do. Also, again, it confuses the bookkeeper confuses the process. If you're taking personal payments out of the same checking account and make things a little bit more difficult. Let's take a look at what if we were to use class tracking just to take a look at that and say, well, what if I went back on over here and said, well now, let's look at this last 75 and let's say that I want to use my, my one account and C class tracking. So I'm gonna go back to the category over here. And we could say, let's say this was going to Vaughan's again, let's say this one was go into Vaughan's and instead of me put in it to the owner's equity, I'd rather make basically another column on my income statement in essence is what the class tracking will do. And then we'll base in, then we'll put it into a separate class, and that will then roll into the equity accounts. So we'll see what that will look like. To do that we'll have to turn on the class tracking. So I'm going to go to the tab all the way to the right. I'm going to right-click on it. We're going to duplicate tab. And so we'll work in another tab here so we could just turn on the class tracking just to check this out. We're going to then go into the COG in the upper right-hand side. So COG upper right-hand side, we're then going to go into the account and settings. Account and settings. Then we're gonna go on down to the advanced items, advanced items on the left-hand side. And then we're looking for the class tracking over here. So I'm going to scroll down, we're looking for classes, so I want to turn on my classes. You can also use the locations. I'm going to just look at the classes. We'll talk more about this in a section in and of itself. It's kind of a specialty area, but useful thing to know. It really, really neat tool to have the class tracking on. Turn on the class tracking, warn me when a transaction isn't assigned to class, I will not check that off at this time. One to each row in transaction. So we got one to each row or 12, the entire transaction, I'll keep it on each row so we can kinda, that means we get split up one particular item into multiple classes if we need to, I'm not going to get into a lot of detail on that. I won't turn on the locations at this point, so I'm going to save that. So now we have class tracking on. So closing this back out, the next thing we might want to do is add the class first to see that the class field will show up in the bank feeds fields. So if I go to the COG up top and we go then to the lists, I'm going to go to all lists in the classes is going to be a category of lists. So there's one way you can get in there. I'm going to go to the classes on the right-hand side. So now I've already set up this class and I'll just call it p for personal. And you might want to set up two classes if you were to do this. So you would just simply add another class. You might want to set up another one called B for business. So we've got personal and business. And then I would save that. And so now we've got our two classes. I got a personal and a business. So now if I go back to the first tab, then if I go back to the first tab and we've got our volunteer example here. You might have to refresh the screen so that then you get this class field on the right-hand side. You should have a class field on the right-hand side. Then I can go to Vaughan's and let's set up like another account here. And I'm going to set up an account that's like an expense account and it would be like a one that would be designed for personal use. And this could give you like another double-check because we're imagining what will happen here is you're gonna have another column on the income statement. And you're going to have the personal column on the income statement for personal expenses and then the business column for the business expenses. So I'm gonna make up another account. I've already added it here. It's called groceries. So I just called the groceries expensive. Something that you wouldn't normally find on the business side of things that you would expect to have on personal side of things, possibly something that you might want to do. You might, you probably don't want to group it by the vendor like Vaughan's because you can give them more categorization in other reports to do that. But you might want to group BY like this is my normal grocery stores versus warehouse stores versus, you know, versus online type of shopping, those type of group. It may be useful for personal use. And then over here on the class, this is our new thing. We've got the business and personal. So now I'm gonna say this is personal. And then I'll say Save it, let's confirm it. And then what I can do now is run a Profit and Loss report by class. So I can go then to, let's go to this tab. I'm going to open up another report. I'm going to open up the hamburger and we're going to not do the normal income statement, but the P and L by class now, so you can do this one way is to scroll down and say now I want a profit and loss by class, Profit and Loss by Class Reports. Then I'll change the dates up top from a 11 to 0 to 12, 31, 200. Run that report, close up the hamburger hold down Control scroll up just a bit. Then we have our r p class. We don't have any, anything in a business class. And then the non specified and the total we can see down below now, now you can see the p is broken out here. Everything else we're assuming is business that is now flowing into the not specify column. Note that I would if using classes, try to put everything to a class which is a little bit more burdensome because you now have to assign a class, do every transaction, at least those on the income statement. But then that will help you to see that once that are not classified. And so I would recommend doing that. Also if you set up accounts that are personal, that are separate than the business, such as groceries is obviously a personal account. Or if you had like mundane accounts like telephone, one was personal and one was business, for example. Then you might actually set up two accounts, one with a P in it or something, and one with a B in it. So that you have a double-check that can kind of give you a double-check, although it'll it'll add more problems to the longer income statement that you're going to have to take care of and track a chart of accounts that's longer. Or you could simply have the telephone broken out, of course, between business and personal. And this also is useful at the end of the, at the end of the year when you're trying to break out, possibly what's business and personal. The other way you can do this is I would actually go through all these transactions because if I recorded something that wasn't specified or if I wanted to just go back in and re-categorize all these to business. You can go from here and drill down on them and then go into the transactions within them and basically reassign them. So I'm just gonna go go into this transaction. This happens to be a sales transaction, which is obviously business. And so I'm going to go down here and just assign a class to it. I'm going to call it business. This is the business one. Save it and then close it. And then I'm going to go back on up top and go back to our balance sheet. So now we've got business and personal. So it's as easy as that to reallocate these items to a class if you so choose in that way, then this not specified column should only be items that are messed up. You didn't assign a class and you need to assign either business or personal to it. So that's another kind of double-check that can be useful. Now note what happens here is this whole thing, this 1396534 in this example, will then flow in to the balance sheet in the equity section. So we have, even though we have these categories, the total still flows into the equity section. So if I go, for example, to the balance sheet and I still have my end date. Here. I'm going to say run this report. Then our R there's a 103, 96 in the net income. This net income amount then is going to roll into the equity. So you can see the difference here. It's still on the balance sheet. The last method we used it was in here. It's still in the equity section, but it was in owners pay on personal expenses. Now it's in the equity section under income, which would then roll into the owner's equity, which is like the retained earnings account. So if I was to say, let's go to 2021, then scroll down, we're going to say now it rolled in to the equity, so like the retained earnings account. So it's still proper that it's in the equity section. We just don't have that nice Breakout down here for the owners pay and personal. In this method, it would all just be grouped in to the equity as it rolls into the equity section. So that's another method that can be used. Class tracking is a, is a really neat feature to, to get a handle on because it, it does have applications in many different areas. And you can, once you start seeing the functionality of it, you can see how it might be applicable in different areas. 13. 395 Enter Transaction for Income Deposit For Online Cash Basis Business: Quickbooks Online 2021, entire transaction for income deposit for online cash basis business with the help and use of baked feeds, let's get into it within two. It's QuickBooks Online 2021. Here we are in our QuickBooks Online, bake feed, testfile and prior presentations we set up the bank feeds entering the transactions from the bank into the system. Now we're adding those transactions into the data to be included in the creation of the end-product that financial statements. If we go into the transactions tab, we've got our information which are in what I would call the bank feed limbo. I'm going to close up the hamburger up top, scrolling down, we're now going to be considering some deposit type of activity. I'm going to hit the amount tab on the right-hand side and sort by the deposits up top. So now we've got the items that are going into the into the checking account. And when they go into the checking account, then we would be typically considering these items to be something that would be revenue most likely. So that's going to be what we'll consider now how can we enter this information into the system? To do that, Let's open up our financial statements balance sheet and income statement go into the tab up top right-clicking on it. Duplicating that tab, we're gonna do it again, right-click on that tab and duplicate again. So we can then open up the balance sheet and income statement, then gonna go down to the reports. On the left-hand side, we're going to be opening up first our income statement. So within the reports on the left-hand side, we go to the profit and loss that P and L, the income statement scrolling up top, doing the range change from 0, 1, 0, 1, 2, 0, 1231, 200. Running that report, closing up the hamburger holding Control Scroll and up just a bit to that one to five. Next tab on over to the left, going back down to the reports on the left-hand side. Then we're going to be taking a look at the balance sheet, opening up that good old balance sheet reports range change up top 0, 1, 0, 1, 2, 0, 1231 to 0. Run that report. And then we'll close up that hamburger. And so there we have our two reports now when we're thinking about deposits, things that are going into the checking account, where typically hopefully thinking that those increases are coming from the customer. So then you would think hopefully we'll have the checking account than increasing the other side, then go into the income line item on the income statement in some way, shape, or form. However, we could have deposits for other reasons as well. For example, the owner might be putting money into the business or we might have a loan that's going into the business. Those are probably the transactions that don't happen as often. But when they do happen, we want to make sure that we're recognizing those transactions so that we do not include them in income, but rather record them as loans or investments in the equity section if the owner is putting them in place. So keep that in mind. That's first thing you want to be keeping in mind. You want to be saying, okay, if there's something other than revenue that's increasing the checking account, then I want to make sure that I pick that up and put it into its proper location. Main things that might do that loans or the owner putting money in. Now, we're going to take a look at the flow chart now, and we're going to do that on the QuickBooks Desktop version. You don't need the desktop version in order to follow along, we're just going to be using the flowchart that's on the desktop version. So I'm going to maximize this item here. Taking a look at the flowchart, we went over this a little bit more in the intro to the, to the big feeds. But when now we're going to take a look at it real quick down here, we're down in the customer's section because we're considering the revenue cycle. When we're considering the revenue cycle, there's a couple different ways or it depends on the business as to how the bank feeds will fit into it. Which again, we talked about a little bit more in the intro to this. And we're going to first consider the easiest way that the bank feeds might be put into place. Meaning we're not only going to be on a cash-basis method, but we're going to be dependent on the bank in order to record our financial statements, in order to record our income. In other words, we're waiting until that deposits actually clear the bank before we record them in our system, that would be the easiest thing to do. That's going to be our first method and then we'll add basically levels of complexity to it after that point in time. The next level up in complexity would be something like you're collecting, say, money at the point in time that you make cash sales possibly making then sales receipts at that point, then you even though you're on a cash basis in essence, at that point in time, you still need to go to the bank and make deposits into the system. And you're probably going to be wanting to do a step away from being reliant on the bank statements in order to record the deposits. Meaning you'll probably record the sales receipt here and then you'll record the deposit and then you'll match out that deposit to the bank feeds. And then if you have a full service type of system, meaning you might create an invoice so that you can track who owes you that money. Then you're going to have to receive the payment and then record that deposits. We'll take a look more at those at a later point. When you're going to be dependent on the bank statement in order to record the income in the system. Some of the easiest type of methods to do that with a type of business that would be easy to do. That width would be things like online type of services like gig work or something like that. So if you're getting paid for services like an audible or something like that, they're paying you for the book. So you're getting paid by YouTube, AdSense revenue or something like that. Or you're getting paid from Amazon and you know, those kind of revenue, then once it Through, you might just recorded income at that point in time. You don't have to collect cash, for example, like you would in a restaurant or something like that. You don't have to create the invoice and then track the invoice and track the accounts receivable. So that's the kind of industry that were first considering here that this method, the easiest method, would work easiest or best in. Now just remember like if I look at the bank statement over here, in this bank statement, this is, we're imagining coming from the bank, reflecting the bank statement. And this is not the data that we're going to put in our system, just a mock bank statement. But just remember what we're talking about with regards to the bank feeds. We just have what the bank knows and all the bank knows is that we have an increase in terms of deposits and the amount of the increase and the date. Or we have a decrease in right now where we're focused in on the increases. So and it'll, it'll differ a little bit in terms of the type of transaction. So obviously if you just record cash transactions meeting, you do business, you take the cash and then you record it into the bank at the end of the, at the end of the day, then the bank doesn't know anything other than the date you have deposited it and the amount. So those are the two things you have now if you use then a cash-basis system and you depend on the bank, You wait, in other words, till it clears the bank before we record it in the system, then we can do that, but we're losing some information to do that because all we have is the date that the transaction took place and the amount in our bookkeeping system, we don't have the customer information, for example, in that system, and we're not being able to double-check our sales as easily that we entered during the day to the deposit that was made at the end of at the end of the day. So you can kind of do that and you can make the financial statements, make the income statement, and the balance sheet. But you're kind of losing, you're going to lose some information to some degree. Another kind of system is we might have electronic transfers. So if we're getting deposits from, for example, gig work, like by Amazon or YouTube or other platforms that are just paying this money. Then because it's an IEEE transactions and electronic transaction, then we probably have some of the description information, which is usually useful for us to know who the customer is. So in that kind of situation, which we'll see here, we can have a little bit more data and we might be able to add the customers as we entered in that system. If we're getting paid by check, then if we inter the individual checks individually, then we might have the information in our bank account for the checks like we can go to the bank transaction feed. But usually you have to go to the bank feed in order to open the check to add the detail of who the customer is. In that case. In other words, it wouldn't flow through electronically. If you receive physical checks that you then scanned in or deposited into the system, you might have the canceled checks available to you on the bus. You usually have to go to the banking system to pick it up. It won't just come through on the bank feeds. So the easiest method to use this would be the electronic type of transfers where you're getting paid electronically. So that's going to be the method. And the assumption here, of course, will be that any deposit that we have then is going to be revenue. That's going to be our assumptions. So that means that we're just going to deposit it into the system, increasing the checking account. The other side's gonna go to revenue. If we have any deposit that is not revenue, we want to make sure that we note that things could be money that came from us, the owner, or money like from a loan for example. Okay, so knowing that, let's go back on over to our, our QuickBooks Online. First tab we're gonna go then down to our bank feeds. So we're looking at our deposit side of things. And you can kinda see what we're talking about here with the description. So if we have electronic transfers, then you're going to have the you've got the date and you've got the description over here. Oftentimes this is going to give you some more detail that you would have now if it's a transfer from something like a PayPal, then then all I know is that it came from PayPal. Quickbooks Online could have allow us to basically do bank feeds from PayPal as well, which we might check out. That would, that would mean that you can have two sides of that. You can see the transfer coming from one bank feet account PayPal, the other here. You pick up the detail then from your PayPal account, which is a common thing to be using if you have online type, again gig work type of activity. So then you could have mobile deposits. These could be like a check or something like that where again, notice you wouldn't have the information of the customer on the check. But you could probably go into your online check-in and then find find like a check and then and then put the customer. But it's a little bit more work than an E transaction. So if you have like a Google AdSense for example, type of revenue, then you could, you could then tie that out to the customer with the description. So notice again, within the description here, they give us that information and you want to make sure that you hit the COG on the right-hand side. And I'm showing I want to show the descriptions, make sure you're showing all the detailed description. And that'll help you to kind of sort out your description if you're getting paid from something like a Stripe account, which is another kind of intermediary type account. Then it might be a little bit more difficult to determine where it comes from, right? It might come from like your website or something like that. For a stripe that's similar to a PayPal type of thing. If you're getting paid from like an audible or something like that, then again, it'll it'll kinda show you if you're getting paid from Amazon. Then again, it will kind of give you a, give you a help to show you what that is, and so on and so forth. Interest payments. So those are just some examples of the payments that you could have. Now when you start to group the payments, notice that if you do work somewhere like gig work or something like that, you might have more kind of income accounts that you would have then you would have in some other place, meaning normally on the income statement side of things, if I was to take a look at the income statement, I would want to have a limited amount of income statement accounts up top and then and then have the more detailed broken out by customer. Like I can I can break out with other reports like customer reports and what not. But if you're doing if you're doing like gig work, you might want to break it out by basically adding the customers, basically who's paying you kinda, kinda thing here. So you've got your grouping, your major grouping categories. So you might, you might group like who pays you in Amazon, you know, group your Amazon payments together in like an income type account or something like that, rather than just grouping it into one sales account and then searching it by Amazon at a later point. So that's kinda what we'll do here, what we'll group these together. So for example, if I, if I go in here and we'll take a look at an Amazon type of payment. Let's pick an Amazon payments and say, so I'm just going to pick this one and I'm going to say, okay, there's big $3 payment here. And then I can add a vendor. Now note Amazon is one where I have multiple different kind of payments here. Now if I know, like if you have any kind of thing, would you know that these payments are a little bit different, like, you know, they're, they're paying you for a little bit different things. Then you could use one vendor like Amazon and then break, and then break it out. Two different categories with the use of rules. But sometimes it might actually be beneficial to set up a different vendor for each of the different things. So that you have a little bit more added detail when you sort by vendor, because then you can sort by vendor and it'll, it'll be a specific vendors. So even though it's all Amazon, I might make a different one for Amazon that I'm selling books versus Amazon versus other things that I'm selling or maybe by location or something like that. So I'm gonna, I'm gonna say this one. I'm going to imagine this is for like Amazon Prime Video just to, just to put one here. So I'm going to assume that these are like royalties for Amazon Prime Video and just kind of making this up. So I'm going to say Amazon Prime Video. So I'm going to say Amazon Prime Video. It's going to be the vendor. Again, even though it's just Amazon up top, because I happen to know, I'm going to say I happen to know this is for the video and I want to make a different vendor so that it'll make it easier when I populate things to tie it out to a different vendor as we go. So I'm going to say Amazon Prime Video tab. And then I'm gonna, I'm gonna make that a customer. So that's good. I'm just going to save it there. Now. It's going to sales. I would like it to go to another income accounts. I'm not going to just put it all to just the sales item. I'm going to add another income account and say that I want this going to then let's say income account. It's kinda be income. And I'm going to just call it other primary income. And I'm going to call it Amazon. Now, again, we might, we might make it like 11 income account for all of Amazon or I might make it a Prime Video income account. We might break out like our our income from videos versus other types of incomes from multiple different vendors or something like that. So there's a lot of different kind of categorizations you can have here. I'm going to put it once again to Amazon Prime Video. And so that'll tie out of course to the vendor as well, same name for the vendor and then in the name of the account, I'm going to save it and close it. So there we have it. Now if we added a class, we can add a class. You, I'm not gonna get into classes here because we'll focus in on that separately. If someone put a lot of time in on that. And then we've got the memo down below. And then again, we can create a rule related to this as well. Now I'm going to try to add a rule that will add some of these other payments. So let's imagine that I know that some of these other Amazon payments, although the name is slightly different there for Amazon Prime Video type of payments. And again, I'm just kind of making this up. Then I'm going to try to make a rule that will encompass this transaction for this item as well, that some of those other transactions to try to automate this process in the future. So I'm gonna say, okay, let's create a rule with it. Create the rule. I'm going to call it the Amazon Prime Video rule. So now in order to make it more inclusive, I want to say, instead of all I want to say any of these two rules, and I'm going to make it the description so that the bank text, I'm going to make it the bank text. Again, I believe that was the one that was working better than the description. And I'm going to say a contains. Now instead of having this whole thing in here, I'm going to try to break it down to the thing that'll make it most descriptive of this particular transaction. So I might get rid of say, all the numbers. And I'm going to say, I don't need that. I would think that Amazon. Amazon, EDI would might do it later. Maybe I get rid of even the payment and the numbers here. So definitely get rid of the numbers. So I'm going to say, let's get rid of this. And so I don't need the payments. I'm going to say just the EDI. So there we have it. And then I'm going to add another rule that'll be a little bit more inclusive of some other transactions that will be similar. So I'm going to say this is going to be bank text again, contains, and this time I'm going to say Amazon, me the EU because we had that item in there as well. It was all capitalize or not. I don't think the caps is that matter, but amazon, me the EU. So there was another transaction, I believe anything with that description will also be, I'm going to say grouped into our, our Amazon Prime Video account. So those are the two I'm going to pick up. I'm going to say save it and close it. Save it and close it. And so there we have it. So now if we scroll down, notice we got down here, amazon media EU, That's a little bit different. It's got our rule. So the rule has been applied. So I can then check that out. So here's going to be that information and we can say, okay, that looks good. And we can say confirm that one, let's say. So we've got that transaction that we added basically with the rule. Here's the other Amazon, this is for the media EU. And notice it didn't apply out to all the amazon.company payments and I would think of it, apply it here. So what I'm gonna do is I'm going to, I'm going to check out the rule. I'm going to go to the rule up top again and say, okay, let's look at this Amazon Prime rule. I'm going to edit it. And this first one, because I skipped some text, I'm going to try to say what if I just said Amazon.company and see if that picks it up, I'm going to save it. And then go back to the banking tab. And Sarah, little adjustment, we'll see if we scroll down here to our Amazon items. Now we've got Amazon.company now that's being picked up by the rule here. So let's just add one of those, amazon.com. Let's add this one. I'll just add the one here. So that looks good. So I'll confirm that. And then let's just check it out and see what happens. So if I go then to the, to the balance sheet, I'm going to bring it up to that one to five tick up the checking account. Take a look at the checking account and then there we have our deposit, which we should have. Here's one deposits we want, and here's our two deposits down here. Big money, big money coming in. So there we go. I'm going to select one of those items. And it of course doesn't take us to the bank feed but to a deposit form. So here's the deposit form that we basically created when we use the bank feeds. I'm going to close this back out. And then let's go back to the to the there it is. And then let's go back to the income statement income statement tab. Let's refresh this, run the report. And then if I scroll down, now we've got this new category that we set up in the income Amazon Prime Video. If I select that item, there's the two, the two that we then chose that come in from the Amazon Prime Video. Scrolling back up top. We also added a customer. So if I right-click on this tab and duplicate it, duplicate this tab. And let's just check out the customer that we added. Go into the Sales tab on the left-hand side. And then we can go to the customers tab up top. And then we have our information for that particular customer. So there's Amazon Video. If I go into Amazon Video, then we should have the information related to them. Note here, although we have the customer in place and you do want to add the customer, typically, we're still missing kinda some data here because normally the transactions related to the customer would be, if I go back to the to the QuickBooks Desktop just to see the flowchart, either a sales either an invoice or a sales receipt. And we went right to the deposit form. So QuickBooks, although we have the customer in there, doesn't usually use that form to basically track the information. Because again, it would be recorded typically with a create sales receipt if we receive it at the same point in time or an invoice. So even though we were able to add the customer, we are still losing a little bit of data that we can then typically sort by. Which is another reason why if you go back to the income statement here, it might actually be useful under that method then to add a little bit more detail up top such as like the customer name, in this case the Amazon prime as the customer name. Let's do another one. If I go back to the first tab, now we'll do audible and I'll keep these as not added now and we might add will add them probably later just so we have some more information if we need other examples. So I'm gonna go to Audible here and say, let's just go ahead and add audible. I'll add the oldest one. And so we're assuming this is like a royalty payment, which again, it's a perfect thing to just basically add to the system just with the use of the bank feeds, right? And so what we'll typically do is we got okay. Audible incorporated. So you could just copy this in the memo. Typically, put that in the vendor field. Somebody picking up audible vendor field, I'll just add that. I'm sorry, not a vendor. This is a customer field this time because it's a pain us is if I got that terminology wrong, I apologize, this is the customer. And then I'm going to try to do the same thing for the categories. So I'm going to call it another income account by who's paying us typically, because that kinda tells us what we're getting. I might call it, in this case, audible would be audio books. So I might call it audio book revenue. If I have different people that are paying the audio book revenue, I might call it, you know, different people. But if it's all, all my audio book revenue is from Audible, then maybe I just simply call it the audible revenue here. So I might then say add, I'm gonna say this is going to be an income type of account and this is going to be an other primary income. And again, I'm just going to call it audible, not just.com, but just audible. And again, you might want to call it something more generic in case you have other sales that are, that are like on audio books. Let's say you might call it audio books instead of audible or something like that, but I'll keep it at this. I'm going to say Save and Close. Then we could create a rule with it. So I'm going to go down and say I'm going to create a rule. And I'll call it audible, audible rule again. And so notice I I'm copying and pasting that same thing from the description customer. And in the rule same thing we did kinda with the vendor side of things. And then this time it doesn't really matter if all or any, because I'm just going to be choosing one item. So I want to be the bank texts because that seems to work best as opposed to the description contains and then I don't need anything other really then Audible dot I-N-C. So even though they might all be the same here at the end of it, I really only need that. I want to get rid of the numbers and what not because that might that might block future transactions from being added. The transaction type here, it's going to be audible and it's going to go to the to the category of Audible, which is an income account. So I'm gonna go ahead and save that. And then that looks good. Let's check it out. So now we've got all these audible items here that are being added with the rule. I'm just going to confirm one of them for now. So I'll confirm one. And then let's check it out. Let's say, let's go to the balance sheet. Let's refresh this thing, running it. So we have a fresh report, go into that. And then scrolling back down, we now have the Amazon and we should have audible in here. There it is. There's the audible scrolling backup. And then we're gonna get the income statement. Then let's say now we're going to go and refresh this report, running it. Now we have another income line item up top audible income scrolling into that item. There's the 71. If I go into that item, it's not going to go to the bank feed once again, but rather to the form that QuickBooks will then assign to it, which of course is an increase to the checking account that's going to be the deposits type form. So we have that deposit form closing that back out, scroll and backup, then back to the balance sheet. If we go to the customers, then we should have another customer name popping up here, even though we don't have as much on the, on the detail of it, it's still really useful to have the customer names here because when you do sort reports, if I wanted to like sort a different report, then oftentimes that might be able to filter the report by the customer. So you want to add the customers to the transactions when you are, when you're adding them into the, into the system, it just adds a little bit of data that might be useful if you need to sort the data in the future. So that's going to be that one. So let's do another one. I'll go back to the first one and say, let's say we got a Google revenue. So like a YouTube revenue or something like that. So now again, it's perfect because it's coming from a, from an app. So we can just add that I'm going to say, all right, well, let's just add this one and we'll call it. We'll call it. We'll call it. I'm going to grab it from the name down here. I'll call it Google AdSense. That should be enough for the customer. And then I'll just save that. So I just copied and pasted it there. I'm going to add another account and I'm going to call it then. The same thing, I'm going to add it. And I'm just going to call it Google AdSense. It's going to be a revenue account. So we might want to call it something more generic note, you might want to call it like, I don't know, Platform revenue, but probably as it AdSense revenue is probably a category in and of itself in that, in that case, but you could categorize it with other similar revenue you might get from other ad revenue or something like that. But I'll just call it that. We're going to say save it and close it. And so there we have it. So we've got our rule that when you want to set up, then I'm setting up a rule for and I'm gonna say this is once again, I'm just pasting Google AdSense rule. It's going to be money in. It doesn't matter if it's all there any because I'm only gonna have one transaction, I want to make it from the bank text that it contains. And then I just want Google AdSense. I don't really need anything else. Just Google AdSense if it has that, it's probably revenue, it's money in it says Google AdSense, that's where I wanted to go. It's going to go to the AdSense revenue account. Looks good. So I'll save it. And there we have it. And now I'm just going to add one of them. I'll just add 1's ad this one. So let's go ahead and confirm. Confirmed. Let's go back on over to the report balance sheet. Let's run it, run it, and check out what we got in the check-in, check-out, the checking. And so now we've got Google. Google. So there it is. And then if I go back on up top, on the revenue side, into the revenue side of things, refreshing that report. We now have another income line item up top for the Google revenue. And that's got the 892 in it. And so if we go into that, there it is. And there's our deposit scrolling back up top. We also have our customer tab where we should have a new customer Now that being Google. So I'll go back to the first tab. Now we could use, Of course, this rule to add all of these other ones that are applying the rule out to what we might do that later. But in case we need these other items for other transactions, I'll keep them not added yet. So let's add another one Now. Let's say now the other one we have the stripe income now stripe is kinda like an intermediary, kinda like a PayPal, but she might use to collect some revenue and you might have different areas that go through stripes. So it's gets a little bit more confusing for Stripe because sometimes it doesn't come in because it's a third party. It's not coming directly from from from the payer. It's going through Stripe which is like a third party, kinda like a PayPal. But PayPal up top, you can actually use as a banking system and you can actually get the information from PayPal to see the detail. So we might do that, we might do that later down here, we're just going to say, Well, let's just add the stripe item here and let's just if we know where it's coming from. We could just say if it's all coming from one source, like a website or something like that, we might just be able to add the website. If it's coming from multiple sources, then it might be a little bit more complicated. You might just call it stripe income just to make sure you're adding it into income if you don't know exactly where it is or you might be more specific. I'm, I'm gonna say the vendor here, let's say the vendor or customer, it should be customer. I keep saying vendor because vendor comes first and their vendors slash customer note, we don't really know who the customers unless we go get the detail from striped until we get the transaction over there. So we're losing that information. I'm just going to call it Stripe as the customer stripe isn't who's paying us there, the one that's facilitating the transaction. So once again, we're losing some data by doing this method to taking it directly from, from the bank. But, you know, pros and cons, pros and cons. And then the category, I'm going to add a category for the income type of account. And I'm going to say that this is going to be an income type of category once again, so it's going to be income and we'll say other primary income. Now if you don't, if you don't know exactly where it's coming from, you might just call it stripe income just to make because it might be coming from multiple sources. Maybe you don't want to dig up the multiple sources. You just want to make sure you're adding the income. If it all comes from one source, like a website sales or something like that, then you can safely assume you can just gonna say I'm gonna assume it all comes from a website sales. Just, I'm just making this up, so there's that. So I'm going to say save it and close it. And then of course we can make a rule on that. We can say now I want to rule for the stripes sales and I'm going to call it stripe sales. And then it money in. It doesn't matter all or any. I'm going to make it coming from the bank texts. So I'm going to hit the drop-down here. Want the bank text we want it to contain, and then Stripe transactions. I don't want anything after the stripe. All I really need is stripe right? Transaction find that should be that should be enough. I don't want any numbers or anything because I can mess it up. And then we've got there. That looks good. Let's go ahead and save it. So we'll save it. And now all the stripe items should become synonymous. Going to add one this time I'm going to confirm this one, all these other ones. We might confirm later. And then if I go back on over, we're going to say, okay, balance sheets, let's go ahead and run it. Then of course we got in the checking account, we should see the stripe. Let's go to the income statement because it's more interesting. Income statement run it. And then now we've got the new website sales, website sales and our category of income. If I go into that, we've got our our stripe sale that now has been pulled through. We have another customer that should be added who is stripe, which again, isn't an actual customer, but rather a third party. But that gives us a little bit more detail to track. Bye, Let's go back and do another one here we're going to say, okay, let's say that we had, Let's pick up one of these items we have less. This one looks like it might be like a check or something like that. Right. And I don't have as much details. Just says it's a mobile deposit. So let's imagine we we entered we entered a check that we got paid, someone paid us a check. And then we have less detail here for this system, It's a little bit harder for me just to enter this directly into the system from the bank feeds because I don't have as much information on the memo line. So what you could do then if that's your system, if you're getting checks, checks in the mail rather than electronic transfers, is then go to the bank account online, pull up the canceled check to see who paid you so that you can then add the customer. And I'll just say this is Jones as the customer, make it up. And I'm going to say Save that customer. And then we want the category. Now, if we have to determine, obviously at this point in time, this would be more standard type of process where you build someone for work that was done or something like that. If you build them, you would introduce an invoice that we get a little bit more complex. We'll talk about that later. But you're going to have to assign the category. So it might just be sales. We might have another category. We might say I want to add a category here. Maybe it's income. And I'm going to say this is consulting or something like that. So other income, let's say it's Console team income. So we'll save it. And so there we have it now we can't really make a rule about it because once again, it's a it's a check that got deposited and you don't have any information about the customer information or anything like that. We're just going to assume that any deposit in this format would be then revenue. And if you have a system where that's basically the case, then you might just include all deposits as revenue. And the easiest thing would be not to go online and add the customer, which means you'll lose a little bit more detail. Or you can go online and basically pick up the customer for every transaction, which will take a little bit more time to do. Meaning go online to your baking transactions, lookup the canceled check, see who the customer is on the canceled check, add it to the transaction on the bank feet as we have done here. So we can then confirm it. And there we have it. So that should be added. If I go back to the let's just go to the income statement and refresh the income statement. Now we have Consulting income added. So we've got the consulting income. 14. 400 Enter Transaction for Owner Deposit or Loan Deposit Using Bank Feeds: Quickbooks Online 2021, entire transaction for owner deposits and loan deposit with help and use of bank feeds. Let's get into it within two. It's QuickBooks Online 2020, one, here we are in our QuickBooks Online bake feed test file and prior presentations, we set up the bank feed information. We entered some of that information into the system. We're now continuing to add some of the information into what I would call Bank fetal Limbo to the financial statements or to be a component of the creation of the financial statements. We're going to go to the transactions tab on the left-hand side, going to close up the hamburger up top, sort the transactions down below by the amount so that we can then sort it by the deposit, the increases on top. So in a prior presentation, we talked about the items of the posits we hope to be sales type of items, but we also might have deposits that are going into our system. That would be from, say the owner or say from the bank, or say from a loan like the bank taken out a loan from the bank. So that consider those. Let's first jump on over to our bank statement and imagine we have a bank statement. These are not the same numbers, but let's just imagine we have a bank statement and we've got the increases on the deposit side, and then we have the decreases checks and what not checks and withdrawal side of things. So we're looking at the deposit side of things over here. Now, on the big side of things, we don't have much more information other than the date and the amount that was deposited unless it was an electronic transfer, in which case, we might have some more information for the bank description type of information that we can use to then apply out, say, a customer. If we're talking about something that was us, the owner putting money into the bank. Then we want to make sure that we can have some way to differentiate our deposit into the banking system from other deposits that are going to be from our normal operations so that we don't accidentally pick up our deposit as income. If we were to do so, then we would be including our deposit as income and that would be increasing our income taxes and our income side of things, which would typically be bad for taxes because that would be increasing the income on the tax side of things as well. Similarly, if we take out a loan, which probably doesn't happen too often. But from time to time when it may happen, we might have money going into our checking account then. And of course, again, we don't want to include the loan money in income because we might be paying taxes on that as well. So we need some way to distinguish those items in our system. It might be an easy way to do that. Meaning if most of our deposits come from something like gig work or things like that where we can see where they're coming from. And then we have a deposit that came from like an electronic transfer, like a loan or some other deposits that looks unusual, possibly a larger deposit than usual or around deposit which isn't usual, then we can differentiate those items, but you want to make sure that you have some format to differentiate them so that you don't automatically include them, like I say, in income. So let's go back on over and let's take a look at our financial statements first by duplicating our tabs up top and a right-click on the tab up top and duplicate it. I'm going to duplicate again by right-clicking on the tab up top and duplicate it, we will be opening up then our P and L profit and loss as well as the balance sheet going down to the reports on the left-hand side, let's first open up the P and L report. And we're going to open that up and then we'll do the good old date range change up top starting at 0, 1, 0, 1, 2, 0 to 12, 31 to 0. We're going to run that report, close up the hamburger hold down Control. Scroll up a little bit to get to that one to 5%. Next I'm going to go to the next tab on over. We're going to do the same for the balance sheet this time reports on the left-hand side, opening up the BS balance sheet, opening up the balance sheet date range change up top from 0, 1, 0, 1, 2, 0, 1231, 200. Gonna run that report. Close up the little hamburger once again. So now we're talking about increases to the checking account. That's pretty straight forward. We're going to see that increase on this side of things. The other side, however, if it's coming from us, the owner needs to be going down here, say to an equity type of account, which we might be putting in just simply to the owner's equity type of account. We might add another account that would be recording the increases from us as opposed to the decreases. In other words, if we have a sole proprietorship type of company where the only owner, then we might just wheeling need really one equity account that would roll over all the income in to it. And that would also have possibly draws decreases money that were taken out for personal use and increases money that we're putting into the business for investments from our personal account to the business account. Or we might want to break out some of that information, such as we have here with the draws, meaning we have the owner's equity, which is kinda like retained earnings, which is going to be where the income that's going to roll in from the income statement that hasn't been going out yet. So it's the retained amount of income or it's the accumulation of revenue over time. And then we have the owners pay and personal expenses, which are like draws, meaning that's the amount that we took out of the equity section for our personal use, decreasing the the business account, taken it into then our personal account for personal use. And then we might have another account here which would be like owners deposits or owner investments. And that would be us taking our personal money and putting it into the business, which hopefully it doesn't happen that often, right? We do that at the beginning of the business and then we're hoping the business is generating revenue and we're always taking money out of the business, not putting it back in, but and times are down. We might be putting money into the business. We might be starting the business, putting money in or expanding, then we put money in. You may not want another account to put money in. You might just want to put that into the equity section. Or we can have another account which will add another account here. So we'll track all of the money that we put in a separate equity account, all the money we take out in this PE or personal expenses, and then all the retained earnings or the accumulation of revenue within the business in the owner's equity account. That's how we will see it here. Note that if you are a partnership, then of course, you could have one to three equity type of accounts per partner because you're going to have to track this information per a partner, right? So that's gets a little bit more complex. A corporation is actually a little bit easier in that you just have the retained earnings, which is like this account here. And then when you take money out, it's usually if it's a C corporation in the form of dividends. Dividends are all standardized to stockholders. So you don't need to track by different, you don't have to track like different dividend payouts for different owners. And when the when the owner puts money and it's usually going to be a cash purchase of a stock. So it's a little bit different. And that situation here we're focusing in, of course, on the sole proprietorship. So let's go back in. And what you don't want to have happen, of course, is if you just record the deposits like you normally do just straight from the bank feeds, it might just include it in income over here. And if it includes it in income, including increasing the checking account, the other side go into income, it's going to increase net income. And when you do your taxes, then it might be included down here. And net income, meaning you're going to be paying taxes on money that you put in. That wasn't revenue from somebody else. They don't want that to be happening. So I'm going to go to the first tab here and let's take a look. Let's just pick out deposit. I'm going to pick this deposit here and I'm just going to assume this is us putting money into the business. So we put money into the business. We're assuming we see this deposit here. And now we're going to record it and I'm going to have to have some way to recognize. I could say, okay, it's a mobile deposit. I just happen to know that those types of deposits or that dollar amount or whatever, what I put in to the business or as a loan if it were alone, for example. So I'm going to put in this case, I'm just going to call it the owner as the vendor or customer. It's not really a vendor or customer here because it's a it is the owner. Also note that you already have an owner here, so I might call it owner because that's going to be a customer. I'm going to call it owner for the customer because we have one as a vendor as well when we took the money out. So it really should be a customer type of type of name. So I'm gonna say customer and we're going to call it not it's not going to go to this income account for consulting, but rather, I've gotta make sure to change that. And if I didn't change that, it would have been included in income if I just added it in that way, I need to make it go to an equity account. That's going to be the main point here. And then we could choose the sub account, I'm going to call it owner's equity. And then two, they have another one, partner's contribution. So it's not really a partner, but I'm just going to go ONE owner investments and that's going to be an equity type of account. So I'm going to save that. We'll say Save. And then scrolling down. Now I can't really make a rule for that unless there's some type of deposit that I can basically pull out as always being our money from us. But of course we shouldn't be putting money. Hopefully, we're not putting money into the business on a regular basis. We hopefully are taking money out of the business on a regular basis that has been generated and accumulated within the business. So most likely you can't really make a rule for this. You just got to make sure that it's not being included when you have some other rule. Meaning if there is a rule set up, you don't want it to automatically add a deposit that came from you, right? Because you want to make sure that you're able to break that out. So you want to be careful that your rules are stringent enough not to include deposit that's coming from you that would just be included in income in the income line item. So I'm gonna go ahead and confirm this. Let's go ahead and confirm. Confirm roger that. And then we're gonna go back to the next tab over and say run that report, go into the checking account. Checking account, checking out the checking, and then we put that in. So now we've got that item in there as the owner investment other side then scrolling back up top is not going to go to income, but rather down here in the equity section. Now, notice we've got these multiple kind of equity accounts. We got the opening balance, which is an account that shouldn't really be there. We should take it out of there and put it into equity. But then the accounts that we should have have or the owner's equity, the investment represents us putting money in and the owner's personal expense and then the Income Statement account down here, which is basically coming in from the income statement. Now this income statement really shouldn't be there as well, but it's kinda, it's QuickBooks way of kind of tying in the income statement to the balance sheet to show us it. If I was to go one day and say I go to the 21st, for example, and run this report, you'll see that income statement line item disappears. And if this equity opening balance wasn't there, I'd have the investment, the equity, this personal expenses, and so on. Notice that this account right here is kinda like the retained earnings, that's the account that everything kinda rolls into. So in other words, these two accounts here, like if you did financial accounting, normally, you would you would roll these two accounts into like the retained earnings or the equity account during the closing process. So these would typically close out. You can do that manually if you want to do that. Meaning at the end of the year, normally you would think that these accounts within roll into the the equity account. So just kinda like the, the net income rolled into, into the owner's equity accounts so that you attract this on a yearly basis. It you don't have to do that though. Maybe I maybe I like seeing the investment account for all the life of the company that I have put money into the company and then the equity representing the total revenues, even including the amount that has been distributed and then the amount of the revenue that has been distributed. I kinda, I actually can't like to see that. But just just realize that when you give the information to like tax preparers are or something that, you know, you're usually thinking about. The, you can have to run this report, for example, this report here. You might have to run this report just for the current year, 2020. Just so you see the activity for the current year, for the draws in the investments. So in other words, this will be for the life of it unless you close it out or or if you want to keep it there, you can run the report for the current year to see the activity for the current year on the income statement. This, by definition, are temporary accounts and QuickBooks will kind of force it to close out on a yearly basis and it'll start back up at 0 on January if you have a normal December calendar year end type of business. Now, if this was a lone we'd have the same kind of thing and the income statement, we wouldn't want to see it showing up on income over here. I'd go back to the balance sheet. The only difference then would be that instead of including it into the equity section, we would want to set up another account for a loan account which would go up top. And so we'd set up the other side, not go into income, but alone increase in the checking account. The other side then go into like a loan payable, which would be a liability type of account. So that's going to be the the other the other side or the other format. Those are the two types of deposits that are typical that you might see. Typically not something that happened every, every day during the business, but that happened from time to time that you want to make sure that you're picking up not as income, but either as an equity type of account if it's from the owner or as a liability type of account, like a loan payable type of account if it's from a loan. 16. 405 Sales Tax & Bank Feed Overview: Quickbooks Online 2021 sales tax while recording transactions with the help and use of bank feeds. Let's get into it with Intuit QuickBooks Online 2020 one. Here we are in our QuickBooks Online bake feed test file and prior presentations, we set up the bank feeds. We entered some of the data into the system which is now in what I would call Bank feed limbo and the transactions tab, we're taking that information now, including it into the financial data as we approve the information and add any necessary details, we're thinking about the deposit side of things. And as we looked at in prior presentations, when we think about the deposits with a can, of course, hopefully those are going to be revenue type of items that we want to be including in some way, shape, or form into our system. But what happens if we have to deal with sales tax that kind of complicates the system because then it makes it a little bit more difficult for me to just use a system where I'm going to just say Look, everything that's an increase to my checking account, I'm going to record as a deposit because then the sales tax kinda complicates things there. So let's go over to our flowchart, which is going to be on the desktop version. You don't need the desktop version of follow along. I'm just going to take a look at the flowchart here because it has a nice flow chart. So let's first just think about the concept of a sales tax or is usage type of tax, sale tax or usage type of tax would be theory, the government imposing a tax not on the business, but rather on the customer, but forcing the business owner to be the tax collector, the person that has to enforce the rule makes sure that the customer is then pay in the sales tax. So the idea then being when you make the sale at that point in time, That's when the government wants to charge the customer the sales tax and they're forcing us, the business owner, to make them do that by collecting the sales tax and the revenue that we receive within take the portion that is the sales tax and we have to then pay that and distributed then to the government. So that's going to be the concept. You can kind of think of that logistically. What has to happen when I make the sale, I got to collect the sales tax at that point in time, and then I've got to track it. And then at some point in the future, I've got to pay it to the government. Now in the US, we typically have the sales tax not on the federal level but on the state level. Therefore, it will differ from state to state, but the concept of the state of the sales tax will basically be the same in that when we make the sale were forced to basically collect the sales tax. So the rates might change and so on. When we need to pay it, how far after, after we collect the sales do we need to pay it every month or every quarter or whatnot that could change. We won't get into detail on that, but the concepts will remain the same. What we want to consider here is how does the bank feeds then fit into that type of system? So notice that when you calculate the money that you're going to be receiving, normally if you're going to set up sales tax into a full service system within QuickBooks, you would be using the Create invoice or the create the sales receipt. These are the two documents that generally typically start the recording of a sales process in a normal accounting cycle. However, with the bank feed system, remember, we, we kinda wanted to think about the simplest bank feed system, which would mean we're going to bypass these forms. If we could write and just say that all deposits that we get are going to be, are going to be income. And then if we had a system where we wanted to record income at that point in time that we get the bank feed at the point in time that deposit clears the bank. Then what we have done is we're recording income at the deposit and we've bypassed the sales receipt and the invoice, making it a problem to do the normal kind of kind of sales tax calculation within QuickBooks now, for US companies, if you do like gig work or something like that, and there's no inventory involved, then very likely you don't have sales tax and you don't have to deal with that in that case. And that might make it an easy system to use. But if you have to pay sales tax in the US, possibly that would be when you sell inventory, for example. And you still want to make it as easy as possible mean and you kinda wanna wait till it clears the bank or you would like to do as little data input as possible, then how might we work that system that will be in place? Now we'll talk more about the other, the other problems with a full service system like create an invoice and tracking through accounts receivable. We'll do that in the future. So if you have to track accounts receivable, you're deviating from a cash-basis method. And so we'll talk about that in more depth in a future presentation. And then we'll talk about the create sales receipt in a future presentation. That different kind of systems you might use, that, that would be you might need independent as to whether you're using sales tax or not for other reasons. But for now we want to basically add the sales tax to be in place. So we'll think about a system first. If you create the sales tax and you want to use one of these forms, then you can create the sales tax. And then when you generate the sale, you got to use one of these forms. And that will then charge the sales tax to the customer with the use of the form automatically, which is nice, track the sales tax in the accounts payable that you can then later paid. However, when that means that when you record, say a sales receipt, it's recording either deposit, the checking account or an deposited funds. And then when you look at the bank feeds, you're going to have to match it to the sales receipt. So it's an extra step. We're not relying on something to clear the bank. But rather we were creating this form first, then the deposit will clear the bank and then we will be matching them at that point in time. The other method you might try to use, as you might say, okay, well what if I just sell stuff? And I've tried to include the sales tax in basically the sales price when I sell the item. And then I, and then I wait till it clears the bank. And then I'll try to basically back out. What what was the sales tax on a monthly basis or something like that. And that would be a method where you were trying to kinda bypass these two these two forms but still achieve your obligation of pain, the sales tax. So we'll take a look at those I kind of methods. So let's go back on over to QuickBooks. And if you were to turn on the sales tax, then you've got the tax tracking down below. So you can go the tax tracking down here. You've got to set up your sales tax. And you're going to need the location in the US to do that because again, the sales tax will be different by location. So just for my test file, I'm going to have the 9801, Easton Dr. Beverly Hills 90 to 10, and that's just a made-up address, of course. Do you need to collect sales tax outside of California? I'm gonna say no, I don't. That will simplify things hopefully. And then they're setting it up. Automatic sales taxes all set. So now I can I can create an invoice if I so choose at this point in time, then I can populate it and it'll help me to calculate the sales tax. But before I do that, I'm closing out the invoice now. Then you would need to set up an item that we would be including the sales tax. Here's the sales tax calculation. I'm going to go set up an item now. And I'm gonna do that by going to the Sales tab. And let's go to the products and services. And then if it was an inventory item that I'm going to be setting up, I can I can go to new item up Tom. I would set up an inventory item. That means you're tracking the inventory within the system. So we talked a little bit about inventory in the past you might use, that would mean that you're using a perpetual inventory system. You might have inventory, but you're tracking it outside the system, in which case you might create like a non inventory item or service item. So I'm going to create, say a non inventory item here. And I'm going to say in, so I'm going to call it item 1, item sales tax. That's what we're so and that's the thing we're selling. We're strange thing we saw. And then the description is going to be that and I'm going to make them the dollar amount. I'll just make it 0 for now so I could populate the dollar amount later. It's then going to go into sales. So it's going to be included in the income line item of sales and we're just setting up our item. So I'm going to say save it and close it. And then let's add a plus button. We can either create an invoice which will increase the accounts receivable or if we made the sale at the same point in time, in days, like on more of a cash basis, we're going to record the sales receipts. So for now, let's go to the sales receipt and skip one step in the process, not going through accounts receivable, but we still have to record kind of two sides of the thing if we're going to use this process to use the bank feeds. So let's say this is going to be customer number, let's say three, customer three. And then the day and I'm going to save customer three. I'll put it in some point in the prior year, so it's 07. Let's make it 0515 to 0. We're going to create our sales item down below. I'm going to say it's going to be inventory sales tax. What did I call it? Item sales tax. So there we have it. And then I'm going to pick up the rate. In order to do that, I'm going to right-click on the tab up top, duplicate the tab. Close up the hamburger. And I want to look at my transactions down here and see if we can kinda match it up to a transaction that we have. So we can see a deposit Z, how it might, might fit together. So let's say that we have this deposit of this 690 144. So 690 144 is the amount. So I'm going to go back on over and say I'm going to say it's going to be 658.51 because I'm going to try to have a 5% sales tax to see if I can, if I can get this to work out. It's going to be a taxable item, going to hold down control and scroll down a bit. Now, it applied out the sales tax based on the location, which is great. I'm gonna make it a generic problem however, and just look at and just make it a 5% sales tax just to make it generic. So I'm going to change the math here. And I'm going to go down and say I'm going to just make it a generic five override. And I'm just going to make it a 5%. Then that calculates it. It's going to say, Why do you do that? I'm going to say other confirm. So now we have a generic 5%. If I close that, now we're at the 690 144 total. Does that match my deposit here? 690, 144. So now we kind of tie out to that deposit. So this deposit is separate now from the transaction. We gotta record on the sales receipts so that we can record the sales tax. What will the sales receipt do then? The sales receipt will be increasing the checking account or if we put it into an deposited funds, we might put it into an deposited funds here and then deposit it. But either way we're internet on our side and then the bank feeds are going to be used in order to match. The transaction instead of to record the transaction, then we have the other side go into sales for the 651, six hundred eight hundred fifty one. And then we have the sales tax calculated. So now we have the total of the 690, 144. So that means that we're gonna get cash of this amount I'm sorry, cash for the full amount. And then the sales are only going to go up by the six hundred fifty eight fifty one. The difference is going to go to a sales tax payable of the 32, 93. So if I then say Save and save that, Let's open up our financial statements just to check that out, I'm going to go to the second tab, right-click on it. I'm going to duplicate it. I'm going to right-click again and duplicate again that we can then open up our balance sheet and income statement. So we'll go to the reports on the left-hand side. Now we'll open up the P and L, the profit and loss. In this one we're gonna do a range change up top. Closing up the hamburger range change 0, 1, 0, 1, 2, 0 to 12, 31, 200. Running that report. And then go to the next tab on over and then down to the reports down below. That's one. We're going to open up the balance sheet. The balance sheet. And then we're gonna say there it is, ranging and the changing up top on the dates, 0, 1, 0, 1, 2 0 2 1231, 200. And run that report. Closing up the hamburger, holding down Control scroll up a bit. So now when we make when we make the sale, then if I go into the checking account, we had an increase to the checking account this time, not from the bank feeds, not from my deposit form, but rather from a sales receipt type of form. So here it is. There's the sales receipt that didn't go through the bank feeds yet, so we haven't kind of verify that at this point at time. Now the bag seats would then be used as a double check to verify it if I go back up top. And that would be like the reconciliation. So now we're using bank fees as a reconciliation type of feature. If I go to the to the income statement and then I take a look at the sales tab. We're going to the Sales tab. We have this amount here for the for the sales receipt. It's for the six hundred fifty eight fifty one. Remember that that does not include the sales tax here. So this is on our income statement, not including the sales tax. We're only including what we charged. The difference between what we deposited in what we charged what we deposited as here, what we charge to this is that 30 to 93 and that then is being tracked by the system not on the income statement. It shouldn't hit the income statement even though we're collecting on it, scrolling back up top, back to the income statement, but rather goes back to the balance sheet. And we're seeing it going to be down here on a payable account, like a sales tax payable type of account here, that we will then pay in the future. Now this payable is an accrual type of thing. So that's going to mess up our big feat feature. That's why we would, we could use this system and we'd have to take this extra step and not just simply wait till something clears the bank. But we might be able to work around that if we need to as well. So let's just think then if we did this system, if we go back to the bank feeds, and then I was going to say, all right, well now let's say this one was we're going to pretend this was the invoice or matching to the invoice. Instead of recording that deposit, I would need to match it. I need to go find a match for it at this point in time and look for there it is the match. And then when I tie it out, basically is not going to be recording a transaction. When I do this bank feed, if I was to match this, it would simply be saying, oh, okay, There it is. We're reconciling. We're doing a reconciliation process instead of recording the transaction at this point in time. So I won't actually do it at the end. Let's go ahead and do it if I, if I say save that. So now we've, we've matched it out. So now we've entered that in and we've matched it out. So if I go back to then the financials and I run the report, we didn't add anything new when I when I included that, we just mashed it out. If I go back to the to the income statement and I run the report, for example, we didn't include anything new in the sales line item here or anything like that. There's not a double amount to it. We simply matched out the amount that was on that was recorded from the sales tax item. I'm sorry, the amount that was recorded from the sales receipt. Okay, so now let's think about a situation where I want to depend on the bank feeds. I don't want to have to match it. I would like to wait till something he clears the bank. Now if I go back to the, to the flowchart here, let's assume we have a situation like we make sales, for example, we sell things. And instead of recording the sales receipt every time we make a sale because maybe we saw a lot of them. I just want to collect the payments on it and then and then take it to the bank, deposit in the bank, and then wait till that the bank feeds, come through with it deposits and then just record the sales at the end of the day. I want to do that, but the sales tax or causing a problem, I don't want to record the sales receipts here, but I have to pay the sales tax. So how could I might ideal with that? Well, one way you could do that is you could say, okay, well what if I go over here and kinda figure out what our sales tax obligation will be. And we could do that by taking, say for example, our sales. Let's say we take our sales amount and let's just say our sales was we make a sale of $500, That's our sales price. The sales tax rate, they'll say tax rate. Let's say it's 0.05 or 5%. I'll go to the Home tab per cent of phi that so it's 5%. And if we multiply that out, then this times this. That means we'd have to collect another twenty-five dollars in sales tax. Not the rate, but the actual tax. I'm going to format my whole worksheet here. I'm going to go right-click. I'm going to format the cells so I can see some pennies and what not. I'll make it a currency and negative numbers bracketed. And then okay, and then I'll percent, uh, fi this one again, Home tab number per cent of phi. So the amount we have to collect then would be the 500 plus the, the 25, 50, 100 plus the 25. So we'd have to collect 525 so that we can then have our obligation to pay the twenty-five dollars to the government. So when we set our sales price, in other words, if we want to collect 500 dollars for the sales that we're making, we then would want to increase the amount to 525. So we're also collecting the sales tax that would be in place on the sale, if that will say, for example, an individual sale. So that's the first thing you want to think about. You want to make sure that when you set your price is, you're setting your prices. That would include the sales tax, meaning if you were doing that in the QuickBooks system, as we saw, if we created a sales receipt here. If I go into here and go into my sales item, and I set my sales price. Then QuickBooks figures out the sales tax for us by applying the rate down here for us. If I'm not going to use the QuickBooks system, then of course I need to make sure that I'm including the sales tax in the price that I'm going to be going to be setting. And then, and then we'll then when we make our sales during the day, if I go back on over here when we make our sales were going to be collecting the sales tax when it clears the bank, then we're going to have things that clear the bank that include both our dollar amount and the sales tax amount. When it clears, the bank will simply be recording, most likely will include it in the bank feeds to include an increase to the cash and an increase the sales. So now we're in the easy method, we see a clear the bank. We include an increase to cash in an increased the sale. We don't have the sales tax payable account being broken out here as as we saw before, but everything's recorded the sale and then we're going to have to make an adjustment to break out the sales tax payable. So meaning everything would be recorded to sales. So then if I go back into my my income statement for example, and let's go back on up. So let's imagine that we were using bank feeds. And this sales line is the item that we have to pay sales tax on. And we just recorded the sales and we recorded all everything that was deposited into the sales line. So this includes both our sales and the portion that we owe to the government. So now of course, in the form of sales tax. So now of course the government comes in and they strong arm us and they say, Hey, look, if you wanted to do business in this town and you need protection. And so we're going to charge you 5% sales tax. So we're going to go, all right, so now we've got this nine hundred fifty eight fifty one, and we have to basically do our sales tax calculation to kind of back into the sales tax. So we got the nine hundred fifty eight fifty one. So that's going to be the 958.51. And now I gotta figure out how much of that is going to be sales tax. So we're kinda reversing this calculation. So we're, we're assuming we collected revenue based on this. And now we gotta figure out how much of that revenue we got to pay sales tax. Now you might think you would take that number times 5%. But that's not quite right. Because, because we need to kind of reverse this calculation in an order to get there. And one way you could do this is you can use a tool and that's going to be a Goal Seek tool. So let's simplify this transaction a little bit. I'm going to say if the sales were, were 500. And we'll use the same example as our starting point. And then I multiply it times. What right? Do I have to multiply it times to get up to the amount that we're going to be collecting add. So that would be equal to the 105, 100% plus the 5 percent sales tax. So now I'm going to say 1.05 or a 105%, I'll percent defy that. And this is, this will get down to the collection line here a little bit quicker. So we've got the 500 times the 105 that gives us our 525. So now let's imagine that we've collected all the revenue so we know what we collected, meaning we know the bottom line number. Let's imagine that should be this 958. That's what could be this number. We need to kind of back into what the sales line item is, the difference between the sales tax. So if I collected all the sales and sales tax, then I have to back into the amount that I've gotta pay. I've I've got to pay the local tough guy. I mean the government. Then what we have to do is then say that we got back into it so I know the bottom line numbers. So let's go ahead and do the same calculation. I don't know the top number, right? This is going to be. The yellow number, we know this as 1, 0, 5, we know the bottom lumber I'll put down here should be this 958.51. So I'm gonna kinda back into this calculation. I'll do it this way. I'm going to make up a number up top, Let's say a $100. And then we'll multiply this out. This is going to be this times the 100. And then I'm going to use Goal Seek to tell, tell Excel to kinda figure out what this amount should be in order to get that to what we know it should be the nine hundred fifty eight fifty one. So obviously you can do algebra to do this, but I think there's Goal Seek calculation is useful to know. So I'm gonna go then to the, to the Data tab and then the forecast and then the What If Analysis, we'll do the Goal Seek. And then we're going to say, we want to set, we want to set this cell to be the 958.51. We want to do so by changing this cell. So we're going to use just trial and error within QuickBooks will just do trial and error to figure that out. So if I say okay, do that. So there it has it. So now it figures out that if we collected nine hundred fifty eight fifty one, and that includes sales tax. And if we back out the portion that a sales tax that we're going to have to pay the government, then then that means our sales that we charge, not including the sales taxes than 91287. The difference between the two then is of course, the sales tax. So that means of the 958, 51, we have to pay the government, the 45, 64. So this is a way we can kinda back into the sales tax that we owe without using the sales tax widget tool within QuickBooks. So in other words, if I go back on over here, we're using a system. We're thinking about a system where we have to pay sales tax. But what I'm gonna do is just include the sales tax in the sales price. When I make the sales, then I'm going to make the sales. Wait till the sales cleared the bank. So then I just record the deposits with the use of the bank feeds. Then when I record the deposits, they're going to be increasing the checking account. And the other side is just going to go to sales. But sales will be overstated because it will be including both the amount that we charge for sales and the amount that the government forced us to collect on their behalf. Then we're going to have to reduce the sales when we make the payment to the state for our sales tax obligation by calculating and figuring the amount that should be backed out. And we could do this calculation to do so. In this case, figuring that we owe 45, 64 to the government. We pay that to the government, decreasing the checking account and the other side then is going to go to sales, basically decrease in the sales amount, bringing the sales amount from nine hundred fifty eight fifty one back down to what it should be, 91287, which is the amount that we in theory charged, not including the sales tax that we were forced to charge as basically a tax collector from the government. So that's another way that you can kind of think of this simplify the sales tax. So in summary, then if you have sales tax, It's going to complicate the system to some degree. You could still try to do it kind of on a cash-basis method and back into the sales tax in the method we talked about here. Or you can of course, set up the sales tax and use the sales invoice and to create sales receipt to record the sales tax as you create the sales, which will increase a payable account. And that'll help you to then pay off the payable accounts. Payable account being an accrual type of option. Therefore, if they use this system, then you're gonna have to do some kind of matching type of system with the bank feeds to get everything to tie it out. 17. 440 Bank Feeds Matching Invoice to Deposit: Quickbooks Online 2021, the bank feed matching invoice to deposit. Let's get into it within two. It's QuickBooks Online 2021 there who we are in our QuickBooks Online, big feed test file and prior presentations we set up our bank feeds into some financial data into the system which is now in what I would call being fetal limbo and the transactions tab. Now we're going through these items and adding them to the financial data. So the information down below, we're now thinking about the deposit side of things, typically the sales cycle side of things. Let's go on over to our QuickBooks Desktop just to consider the flu chart. You don't need the QuickBooks Desktop in order to follow along here, we're just looking at the flow chart. We're in these customer or revenue cycle. And now we're going to add some levels of complexity to the revenue cycle here. So before we thought about a situation where we are reliant on the bank feeds and that would be over here. So we're just going to wait till stuff clears the bank and then we have a deposit. We're going to record that in essence as revenue and then an increase to the checking account at that point in time. If you need to deviate from that system because you have a little bit more complexity. For example, you need you have as type of business where you do work, you invoice the client and then you get paid at some future point, like a law firm or a CPA firm or bookkeeping firm, they often have this type of motto. Then you've got to track accounts receivable. Accounts receivable is an accrual account. Therefore, you can't just simply rely on the bank feeds typically in that situation, what would happen then? Well, let normally we would start with the creation of the invoice, so it would do the work, then we would have to build for the work creating an invoice. The invoice will record an increase in the accounts receivable and the other side then go into sales or revenue. There's inventory involved. You have inventory issues as well. We won't go into them in detail here because we talked about them in the past. The main thing is that accounts receivable goes up at this point in time in the sales are recorded, then we expect to receive payment in the future when we get the payment, that means the accounts receivable is going to go back down and we record the other side, either to the checking account or to an deposited funds. So between these two items here, we have this accounts receivable that we're tracking in. And that's going to be important because we want to make sure that we're collecting on the work that we're doing. And we do that in QuickBooks, at least with the accounts receivable account. Now when we get to hear the receive payments, we might put it directly into the checking account from this point, or we might put it into an deposited funds and then go to the bank and make the deposit at this point, taking it out of and deposited funds, putting it into the bank account, why would we do that? Possibly, if when we receive the payment, we have multiple payments, for example, that we're going to group together, possibly cash payments than, for example, that we then go to the bank and deposit into the bank. We want to group them in the same format that they will be shown on the bank statement, or that they will then show on the bank feeds so that we can easily match them up. So that's going to be the typical process. Now the issue here, of course, is that the invoice then creates this accrual system, which means it has an accrual component to it. So we can't just simply rely on the big feeds to then just record the deposit and the record the sale at that point in time. Now note that some people still want to do that. You might say, Well, yeah, I can, I could just why don't I just build the client, but I don't want to record the revenue or the cash until it clears the bank, right? I'll just build a client or invoiced the client. And then when they pay me, That's when I'm just gonna wait till it clears the bank. And then I just want to wait till that point in time and clear the bank and record that the deposit and the income at that point in time. You might be able to do that. But just realize that if you create the invoice within QuickBooks, then the invoice will record the transaction to accounts receivable. So if for example, if you want to invoice the client, but then you still want to wait to record it on your books until you get paid or something like that. To kind of simplify the process, then you can't really make the invoice from QuickBooks unless you make it and then delete it. Because because the invoice is going to record it to accounts receivable. So you could use QuickBooks or some other system to invoice, possibly a Word document to invoice the client and then track who owes you the money, possibly outside of QuickBooks in like an Excel worksheet or something like that to make sure you're getting paid rather than tracking within QuickBooks in the accounts receivable. And then once you get paid, wait till it clears the bank account, and then simply record the deposit in a similar kind of way, increasing revenue and increasing the sales at the point in time you get paid. So you could do that. But normally if you're invoicing, you want to track the accounts receivable within the QuickBooks system. And when you create the invoice, that's when the accounts receivable will typically go up. So how would the bank feeds fit into this? Then the bank feeds will typically be kinda like a matching type of transactions or they'll compliment one of the transactions so you could fit the bank feeds in possibly at any stage here, meaning I could create the invoice, for example, and then and then wait until I receive the payment. Instead of recording the receive payment, I just simply wait till the deposit clears the bank. And then I match up that deposit that clears the bank to the invoice. If I was to do that, then it's going to when I record the deposit, it will record a transaction, but the transaction will be a decrease. The accounts receivable and the other side then go into the checking account. It'll be similar to the receive payment transaction, rather than that like the normal transaction we would think of, which would be increased the checking account the other side go into sales. Or we can record the create sales receipt and then record the receive payment and possibly put it into an deposited funds or into the checking account. If we put it into an deposited funds here, then we can match this out to the bank feeds wait till it then clears the bank instead of recording the deposit. And then the deposit will be matched up against the received payment, which may record a transaction decreasing and deposited funds putting it into the checking account. Or we can create this sales receipt, received the payment, and then record the deposit on our side, independent from the checking account, independent from the bank feeds. And then use the bank feeds to match out our deposit that we recorded at the end of the system to what cleared the bank, which is just a matching transaction. In that case, it doesn't record anything new, but it helps with the bank reconciliation process. So we'll take a look at each step along the stage just so you can get an idea of what we're talking about here. Let's start with the Invoice. Let's create an invoice and then try to match out the bank feeds to the invoice. So I'm going to go back on over and see if we could test this out. And let's just pick, pick a deposit. And let's say we're going to be depositing this this stripe item. So I'm going to I'm going to make believe that we had an invoice before the bank feed cleared here and then use this to kind of match out to the invoice. So let's see what that would look like first, let's open up our financial statements balance sheet and income statement. Going to go back to the first tab, right-click, I'm going to duplicate this tab. Go to do it. I can right-click and duplicate it again. I'm gonna do it one more time so that we have two tabs that we can work in, right-click and duplicate one more time. And then in this tab, I'm going to create then the profit and loss or income statement by going into the reports down on the left-hand side. So reports will open up the good old P and L, the profit and loss, the income statement. And then we'll do the range changing of the date range up tops of the good old range change. And that's going to be from 0, 1, 0, 1, 2, 0 to 12, 31 to 0. Let's run that. Run it. Close up the hamburger hold down Control scroll up just a bit. Go to the next tab to the left. Let's do the balance sheet. That good old BS report, the balance sheet report. It's got good information even though it's the BS report. And we're going to go up top and say this is going to be 0, 1, 0, 1, 2, 0 to 12, 31, 200. And we're gonna run that. And then we're going to go to and close up the hamburger up top my initials or B, S and I still have useful information every once in a while. But any case, now we're going to then create invoice. So let's go back on to the to this tab. Which tab? This all the way to the right. And we're going to be creating our invoice now. So let's go to the plus button and we're going to create the invoice. So I'm going to add an invoice here. I'm going to hold control and scroll down just a bit to get down to that 100%. Let's call this customer customer number for new customer number 4. And then I'm going to save that. And then we're going to say that the invoice date, Let's bring it back to some point in the year. So let's say 0, 0, 615 to 0. So invoice date, Let's make a new item. So I'm going to say item 15 just so I can remember, this is going to be our item. We'll say it's a service item. So we don't have to deal with inventory or you could be a non inventory item. I'll say it's a service item here. And we won't be dealing with the sales tax, but obviously, if you have the sales tax issues, we talked about that in a prior presentation on how that can complicate things a bit. And we'll say then the amount here is going to be the 195.47 and I'm going to save it. It's a non-taxable items, so we don't do what? The sales tax, and I'll save that. So there we have it. So now that's for this amount and that amount then is matching what I'm going to tie it out to the bank feeds 195, 47 so that we can practice with that. This then is an invoice, so it's going to increase the accounts receivable. The other side then going to the sales item. So that looks good. Let's save it and check it out. I'm going to save it and close it. And then we'll check it out, save it, closed it, checking it out with a balance sheet. I'm going to refresh the report so we can check it out here. Hold down Control, scroll up just a bit to that one to five. And then in the accounts receivable, there's that 895. And the one we're looking at here was was this 195? So there it is. On this side on the accounts receivable. Let's go back on over. And then on the income statement, we recorded the sale at that point in time. So it should be in sales in here. If I refresh it, which I didn't do, but there it is. Now at Refresh. There it is. So now the sales number will be changed. So now we have the new and updated sales number, which is this number. And then of course we could have another report tracking the receivable, or you could track the receivable in the Sales tab over here. And you go to the customers. And now this customer's field is doing something because it's tracking the receivable. For these customers. So now we can see who owes us the money. And the next step, of course, would be to get the payment. Now if we're getting the payment and we get it ourselves, we can then go to the receive payment here and record the payment. But if, for example, we get it and we collect it with an electronic transfer or something like that. And for whatever reason would rather see it clear the bank and then tie it out just to skip a step of us recording the receive payment and then tying it out. So we'll do that first. Let's see if we can just use the invoice. Say we got a payment now. So the invoice we're imagining happening first, then they paid us That's going into our checking account. They pay us like invoiced by invoice, meaning the amount of the payment needs to tie out to the amount of the invoice, obviously. So QuickBooks can match it because that's basically all it has to match these things up. So then I can go over here and say, okay, now they paid us. So let's go back on over to the bank feeds. Note that the bank feed didn't pick it up when I checked it because the date was backwards, meaning the bank feed was on 57 and the invoice was at a later date. So I'm going to go back to the invoice. And if you've recorded the invoice, one way you can find the invoice is going to go to the sales item and then you can go into these sales. And then I'm just going to adjust the invoice to make sure it's before then the date of the deposits. So I would go into this item here. And then for me I made it on 415 this time so that it will then be before that deposit dates so that it would make sense going forward, we invoiced before the deposit happens. So now I've got it on 415. Closing this back out, going back then to our reports up top. Then I'm gonna go back to the first tab and see if we can find it here. So I'm gonna go then to this 195. Notice that it found it itself. So it kinda found that and said, hey, look, it looks like there's a match. So if I go into it, I might want to check it and say, now it's on the second tab automatically. Instead it found a match here on the second tab. Here's the match they found and we can link to that invoice. So I could confirm it or if I want to check out other matches and say, Hey, is at the only one, let's open this back up. We have then this is the invoice. So it's a hey, look, there's an invoice that we can match this deposit out to. So what happens when we match something to an invoice? It's still recording a transaction, but the transaction might be a little bit different. We're not assigning the other account that would be recorded. It's going to be recorded because it's basically doing a receive payment transaction here by tying it to the invoice. The invoice, in other words, increase the accounts receivable. So now when we match it out, it's going to decrease the accounts receivable. The other side, of course, go into the checking account for this 195, 47. So I'm going to save it. And then we can take a look at that transaction. If I go back to the bank feeds then, or back to the balance sheet and I run this report refreshing it. Then we should see in the checking account. Now if we go into the checking account, we're going to see the deposit and I'm going to make it go down again. See that deposit for the 195. So there it is. There's the deposit now notice it didn't do it with a deposit form, but rather it made a payment form because of course, that's the second step that you would have even though it's an increase to the checking account, it made a received payment form and then recorded it directly to the checking account with that with that form as opposed to going through and deposited funds with it. So then if I close this back out and scroll back on to our balance sheet, the other side is then going to go to the accounts receivable. So here's the accounts receivable. It should then be going down. So there it is. Now it's going down with the payment type form that we've recorded automatically with the bank feeds that now links to the invoice going back up top, if we then go to the customer field over here, so we have the customers section. And if I go down to this customer that we are working on with the customer for. Now, we've got this invoice has now been paid, right? With a payment form so we can track that information by customer. And in so doing, we're kind of tracking then the accounts receivable who owes us money, which is important if you want to do that, obviously within the QuickBooks system. So in that system I'm, I'm jumping back over to the flowchart. What we did here is create the invoice, which is the accrual step. Then we jumped in with the bank feed right in there to basically record the receive payment. So instead of us manually record in the receive payments and the bank feed kinda took this step. Now next time we could think about, well, what if I want to create the invoice and then I want to record the receive payment and then have the bank basically verify or or check possibly at this point or, or, or we can record the receive payment and then make the deposit and then used a bank fees to basically double-check that deposits. So we'll take a look at those options in the future. 18. 445 Bank Feeds Matching Receive Payment Form to Deposit: Quickbooks Online 2020 one bank feeds matching receive payment form to deposit coming through from the bank feeds. Let's get into it within two. It's QuickBooks Online 2021. Here we are in our QuickBooks online bank feed testfile. In prior presentations, we set up the bank feeds and we enter some data into our system. It now been in what I would call Bank feed Limbo, which is going to be in the transaction stab over here until we add it as we have been doing, picking up this data and then adding it into our creation of the financial statements. Now we're going to be considering the process of the receivable cycle. So let's go take a look at our flowchart to consider our process here. We're going to go back on over to the desktop version. You don't need the desktop version of follow along. We just want to take a look at the flowchart. So we're looking at the revenue type of cycle here. We started off with the easiest cycle, that meaning we just relate or wait until something clears the bank in terms of a deposit and then we record it as revenue. But then we have a more complex system at this point where we want to track the receivable. And if we track the receivable, then we can kinda insert the bank feeds into various components along this cycle that we have here. Last time, we inserted the bank feed after the invoice. Meaning you might set up a system where we create the invoice, billing the client for something that we did recording revenue and the accounts receivable. Accounts receivable representing the fact that a customer owes us at the point in time we create the invoice. Then we said, when the bank feed comes through, meaning we're not recording the receive payment. We didn't record the received payment last time. We just waited till the receive payment cleared the bank. So possibly they paid us electronically or something like that. It went into our bank account. It's fed through have with the bank feeds, and then we used the bank feeds to match out to the invoice. However, we might want more control over over the receiving of the payment. So if we get payments like by check or something like that, then of course, we might want to actually get the check and then enter it into the system and then use the bank fees to double-check that check that has been received. So we might do a system where we got the create the invoice and then we receive the payment. And so we're going to record the receive payment, not what the bank feed this time, but we're going to record it ourselves and then we could use the bank feed to match up against this transaction. Now this transactions a little bit confusing too, because we can put this transaction, we know this transaction is going to decrease the accounts receivable because we received something for the invoice we sent out. But the other side could go directly into the checking account or it could go into and deposited funds. Why would we put it into until positive funds and not to the checking account? Couple of different reasons. One, we might put it into deposited funds. The main reason being because we might have multiple kinda payments that we're getting. For example, if we get cash payments or something like that, and then we go to the bank and deposit it into the bank. And if we have multiple kind of deposits going in at one time from multiple different customers, It's going to show up on the bank feeds and the bank statement. Same kind of thing, right? Same grouping because it's on the bank side. It's going to show up there as one lump sum. And so therefore, we need to be able to match out our information to the bank. And the way to do that, we would need to go through and deposited funds so we could we could do the matching process in order in that kind of situation. Or we could just put the well, the other reason we might want it to go to and deposited funds might be another double-check. Meaning if I put it into an deposited funds instead of the checking account, then it hasn't really hit the checking account yet in if I want to use my matching concept with the bank feeds, and then the bank feeds match out to the items in an deposited funds. Then when I match it, then it's going to take it out and deposited funds and put it into the checking account. So that can be kind of another verification step we could put in place as we do the matching process to the bank feeds, or we could put it directly into the checking account at this point in time. And if we did that, then when we do the bank feed to match, it will still match it to what we put in the system. But the bank feed transaction won't actually do anything. It's just going to basically help us in our reconciliation process. Checking the fact that the bank has the same thing on it as our books in that type of situation. So let's consider those. Let's go back on over and we're going to say, all right, let's pretend that this invoice down here, let's manage it with the amounts that we're receiving. And we want the stripe payments. So let's pick up this stripe payment for this one I'll 619, let's imagine this one. Will 619 Stripe payment is the one we're going to work with. I'm going to create an invoice, imagining the invoice is going to happen before this payment. And then and then we'll have a received payment on it, and then we'll match it out to this 1, 0, 69 here. So we're kind of working in reverse, but hopefully that makes sense. Let's first open up our financial statements and then another tab to work in. I'm going to go up top right-click and duplicate this tab. I'm going to do it two more times, two more duplicates, right-click and duplicate again, right-click and duplicate again, the tabs are multiplying like crazy like rabbits. Little rabbit tabs are duplicating. And it was then we're gonna go down. I'm going to go to the tab to the left here. And then let's open up our P&L profit and loss income statement and the balance sheet, of course, going down to the reports on the left-hand side, opening up the profit and loss, the P and L, the income statement. And then we'll do a date range change up top date range change 0, 1, 0, 1, 2, 0 1231, 200. We're going to go ahead and run that report. Close up the hamburger hold Control scroll up to get to that one to 5%. Then we're gonna go to the next tab to the left. Let's open up the BS balance sheets. That BS balance sheet, not everything with initials of bs are. The balance sheet is good information, good information. So the balance sheet will range, change it up top, 0, 1, 0, 1, 2, 1, let's say 0, 1, 0, 1, 2, 0, 2 1231 to 0. We're going to go ahead and run that one. Let's close up the hamburger up top. Now let's create our invoice. I'm gonna go to the tab all the way to the right. We're going to create our invoice to do so I'm going to hold Control, scroll back down to that 100%. So the invoice doesn't do anything kinda funny, will open up a new invoice. So we're going to invoice the client. So we did work. Now we're invoicing and this is our bill that we're sending out to the client we're imagining here I'm going to make a new customer, customer number 16. Couple of customer 16. Take a number of customer and we'll save that. And then I'm going to say that this happens sometime. I'll say 0 to I just want to make sure it's before the date that the deposit clears. So I'm just going to make it in February to make sure this time because I messed up on that last time. And then so there it is. And then I'm going to make a new item down here. So I'm going to just call it, I'm going to call it item. Item. Let's keep it 16 again, we'll make items 16. Item 16. We're not going to deal with inventory, so I'm not going to track inventory on a perpetual inventory system or deal with the sale tax. We talked about that in the past. So it's just going to be Item 16. We're selling here description. And then I won't put the amount. I'll say it's non-taxable, so we don't deal with the sales tax on this example because that's not what we're doing. And then the rate's going to be 1, 0, 6.19. And there we have it. So what's this going to do with an invoice? It's going to increase then accounts receivable by the 10, 6, 19, and the other side then it's going to go to Sales 1, 0, 6, 19. Let's save it, close it, check it out. So here's the saving and closing part of that process. And now we're gonna go to the balance sheet to check it out. And let's refresh the balance sheet up top so we have a fresh report we're working in. I don't want to be working on a stale report. Go into the checking account. It's not on the checking account. Accounts receivable should be going up for this item on February this time. So there's the 10, 6 there. The other side then go into the income statement, the P and L, the profit and loss. So that's the next tab on over. And then we're going to run that report. And then in sales, we've got this item here so that we've got this item on 215. So the next step, so that means in this process, back to our flowchart is to consider this. We're going to say OK, so now we did the invoice increase in the accounts receivable and the other side go into sales. Now we're going to imagine the receive payment and we're imagining the bank feet thing didn't happen yet, so we didn't have it hasn't cleared the checking account yet. That happens in the future. Now we're going to get the payment. So we're going to imagine we got basically just R are one payment that we got from the customer at this, that means the amount of the payment should match basically what we have on the invoice. Remember that if we have multiple payments that are going to go and be deposited at the same time, then we're probably going to have to take the next step and record that deposit in order to make things work. But if we get one thing at a time, like a check, we got to check and we put that into our system. Then it then when it clears the bank, it should be able to match it. Once again, we could then put this two and deposited funds or directly to the checking account. If the payments are one at a time, you could just simply put it directly to the checking account and then use the bank feeds is kind of a double-check. So that's probably the most common method or what would be the fastest, easiest thing to do. So let's go to the tab to the right again and say, okay, now we're going to receive a payment. So we got payment, received, payment, invoice payments now being received, we're imagining so we're gonna say now this is customer customer number 16. Again, customer number 16. Let's make it two days later they paid us let's say it was a check that they paid us. So they gave us a check. Their check number. Is that so they gave us a check. We can put it into the checking account or we can put it into some other the deposited funds. But if the check's going to match out directly and will show up on the bank side for the same amount. We might simply want to put it into the checking account. Now here's the invoice down below, and it didn't show up because I scroll down a little bit to a 100 percent or 90 percent and then it showed up some picking up that invoice and that's the payment that they're getting now to receive payment, What's going to happen then? It's going to increase the checking account because that's what we told it to do. The other side, then it's going to decrease the accounts receivable. Note that this is not going through this, this is not going through the bank feed, so it hasn't double-check the bank yet. The bank feed will then match out to this amount that we're putting into the bank. So we put it into the bank first. This time, bank fees will just be double-checking that transaction, no new transactions. Then what will happen when we do the matching on the bank feeds? It'll just help us with the bank reconciliation process. So let's save it and close it and then check it out. So we'll save it and close it. And then let's check it out. So by going to the balance sheet and refresh the balance sheet. So we're working with fresh stuff. And then we're going to go into the accounts receivable. And then, and then there it is, 27. Now this is going back down in accounts receivable. That's what we would expect. And that then the other side is going to go into the checking account, up top. Checking account then increasing. So checking account then increasing. There it is. Now it's already in the checking account. That means the bank feeds not going to add any more detail to our system because we already have it in the checking account, but we want to double-check it in our reconciliation process with the bank feeds. So if I go to the bank feeds, then I'm going to, I'm looking at this transaction now, this 106, and I'm going to say that we got it. So I'm going to say let's match it in our system now is to match it. So if I go back to our flowchart, in other words, we got the invoice, we did the received payment, Recorded it directly into the checking account at this point in time. And then when I'm over here, I can say, okay, let's say that match this, let's find a match for, find a match. And there it is. So there's the payment. It may find it automatically because the payment should be exact. Notice that that's really all it has to go on with this deposit is the fact that the payment is exact. So if you have a lot of payments or deposits that are going to be the same amount, then it can kind of get confusing and you may need to, you know, you want to make sure that you're able to match out the proper payments and so on. But in any case it, it's going to tie that out. And what's this going to do when I record it? Will nothing. Right. It's not going to record it to the checking account again, it's already in the checking account. What's the point then? It's helping us with the reconciliation process. It's helping us double-check that what we recorded was recorded by the bank. We're doing more of a full-service accounting system in this case. So I'm gonna go ahead and save it. And so there it is. Now. Now we've kinda tied those two things together. Now let's do this. Else jump over to our flowchart here. So we did the Create invoice and then the receive payment, received payment, putting it directly into the checking account at that point, then we can tie it out and double-check the reconciliation process with the bank next item then, which we'll take a look at next time situation where we take the receive payments and we put them into an deposited funds. And this might be most useful once again, if you have multiple payments that you're going to group together, possibly cash payments or like credit card payments or something like that from multiple different customers or multiple invoices, rather than like one check by one check where you can easily kinda tie these two things out. And then therefore when you, when they clear the bank, they're going to look different than the grouping in terms of the amounts that are going to be grouped together as they as they were when you basically made the invoice because you're not going to get payment by payment that are going to basically clear the bank for whatever reason. Because possibly their cash payments that are grouped together, a credit card payments or something like that. Therefore, what you'd have to do then of course, has had the received payment, put it into the and deposited funds. And then you kind of need to make the deposit at that point so that you can deposit it in our books. So we can deposit it in our books in the same way that they're going to appear on the bank, which means the same grouping they'll show on the bank feeds as well as the bank statement so that we can properly match out. And of course, that method will once again not be recording the transaction when we clear the bank, but rather just matching it out. It'll be a process of a more full service bookkeeping system. We're we're recording the full service process were recorded that deposit into the checking account the bank feeds are helping us with the reconciliation process. 19. 446 Bank Feeds Matching Deposit From Customer: Quickbooks Online 2020 one, bank feeds matching deposit from customer to bank feed data. Let's get into it with Intuit QuickBooks Online 2000 21. Here we are in our QuickBooks online bank the test file and prior presentations we set up the bank feed, entered some data into the system which is now in what I would call Bank feed limbo. In the transactions tab to the left, we're going through the process of taking these transactions out of bank fetal MBO to add them into the glorious location of the financial statements and other reports. So we have our information down below focusing in on the deposit side of things. Let's jump on over to our flowchart with a desktop version, you don't need the desktop version in order to follow along, but we're just looking at the flow chart here within it. So we're talking about the sales cycle. We looked at the simplest kind of process where we just take the deposit, whatever that may be, and then record it as sales when it clears the bank. Then we said, okay, what if it's more complex and we need to have a type of business where we're issuing an invoice and then having to go through accounts receivable, then we can insert the bank feeds into various steps along this process. So we looked at the first step or we create the invoice increase in the accounts receivable, other side then go into sales. Then we inserted the bank fee basically right there, meaning it deposited to the bank, matching out then the deposit to the bank, to the invoice which would decrease the accounts receivable and record the increased to the checking account with the help and use of the bank feed at that point. Or we then said the second item which we did was to have a Create invoice and then we are ourselves record the receive payments. When we recorded the receive payments, we deposited it directly into the checking account at this point, the received payment that we recorded not with the use of the bank feeds, but independently was going to then record a decrease in the accounts receivable and then we put it into the checking account. And then we use the bank feeds to match out to what we put into the checking account directly here. The bank feeds at that point then helping with the matching process so that we hope with like the reconciliation process. Now we then have the next step or the next level of complexity where at this point in time, when we receive the payment, possibly were receiving payments that we're going to have to batch together. And it's going to show up on the bank statement in some format that will be different than than like invoiced by invoice amount. In other words, we're getting paid for multiple invoices, possibly with cash, for example. That would be one example where we would then take that cash and have to deposit it into the bank. And it'll show them on the big feeds as well as the bank statement because those are coming from the same source as one lump sum, whereas it will be in our system when we created the invoice in an invoice by invoice system. Therefore, we're going to have to record the receive payments, take it through and deposited funds to make it easy to reconcile by then record in the deposit in a similar fashion as they will be seen on the bank statement and on the bank feeds, and then use the bank feeds to basically tie out what we have recorded bank feeds then helping us with the reconciliation process. So that's what we're gonna do now. We're going to imagine then we have multiple invoices that are going to get paid. And we're gonna have to group them together. So we're not going to put them directly into the checking account at this point, but rather put them into an deposited funds, then do another transaction, taking them out of an deposited funds, putting them into the checking account in the same grouping that we expect them to clear the bank in as so that we can easily then use the bank feeds to double-check and help us with the reconciliation process. All right, Let's do it. We're gonna go back on over. Let's open up a few tabs. We're going to open up Three more tabs. Right-click on the tab up top, duplicate it. We're going to duplicate again, right-click and then duplicate again. And then we're going to right-click and duplicate again. So the three duplication then I'm going to go to the second tab here and I'm gonna go down to my reports on the, on the left hand bottom side, we're going to be opening up our favorite or one of our favorite reports, the Profit and Loss report, the P and L report, otherwise known as the income statement. So there we have that and then we'll do the date range change up top. I'm going to make this as 0, 1, 0, 1, 2, 0 to 12, 31 to 0. We're going to go ahead and run that report. Close up the hamburger, hold down Control, scroll up a bit to that one to 5%. Then we're gonna go to the next tab to the left. Same thing but this time balance sheet reports on the left-hand side, opening up the BS balance sheet, down here, balance sheet report. And then we're going to go up top range, change it from 0, 1, 0, 1, 2, 0, 2, 1231, 200. Run that report. Close up the hamburger. Alright, now let's record our transactions. We'll start off with an invoice. So I'm going to make two invoices this time. And then imagine where receiving the payment on both of them go into an deposited funds. So we'll create two invoices here. So I'm going to say our end to end voices holding down Control, scroll down a bit. I'm going to say new item, invoice, new invoice. And then I'm going to make another customer just so we can customer. So I'll make it DOM or number 12, Let's say, Oh, I want less like 20, customer 20. And then this one is going to be, I'm going to say on, let's say 04, 01, 200. So I'm want to make sure the invoice date is but before the bank feed transaction. So it'll work out properly as if it was happening in real-time here. And then I'll say this is going to be item, let's say 20. Matching that out. It's not going to be an inventory item. I'm not tracking inventory, just Item Twenty I'll say description. There it is. No sales tax and will not be dealing with sales tax here, save it and close it. And this one I'm going to say is for, let's say $100 for this one. And there we have it. So what's this going to do? It's going to increase the accounts receivable 100, the other side then go into sales for 100. Let's do another one. I'm going to save it and new, Save and new this time. So I'm going to do that drop-down, which is really a RAW zone because the thing is up top, so it's a rise up. So I'm gonna say this is going to be a Save and New, Save and New. And then let's do one more of these. And these two will match out one of my deposits here. So I'm going to say this is going to be a customer. 21, save it. And then this one happened. We'll keep it. Let's make it for two just to make it a little different. And then I'm gonna say this is item number 21. And obviously you don't need an item number the same as your customer number, but that just helped me to memorize this stuff as we worked through it. And so there we have that. And then I'm going to make this one for 4417 because the 14417 is going to match one of the deposits that are going to clear that I'm going to match these things out too. So I've then I'm going to say save it. Save it, and close it this time, save it and close it. Poor 500 or now note that I could, if I go back to the first tab and I wanted to kind of match this out to the deposit. In other words, if I if I see now I've got my Create invoice on the flowchart. Now I'm going to receive the payment on it. Now if I wanted to kind of wait till they cleared the bank and then wait till they cleared the bank feeds and then match it out as we did in the prior presentation, we could do that, but we're assuming that those that those two deposits are gonna go lumped together into one amount on the bank feet. So in other words, if I if I see if I was happened to know and I say, hey, I know that this 144 17 is from two invoices and I wait till it clears the bank. I can select this item and that I can match it. I want to make sure that the beginning date is back far enough so that I can do the matching process here. So I'm going to say, there it is. And then I can check off these two items. And that and that should these others the right to those aren't the right tool. I can check off the right two items, which are these two. And that will add up to the 144 and it will record the transaction. But notice that's a little difficult for me to do because now I had to I had to see these two invoices that add up to the deposit that clears. It's going to be more difficult to kind of figure that out because the invoice amount isn't going to tie out to the amount of the payments. If if the two payments or got lumped together, say they got paid with cash and therefore they entered into the bank with this one lump sum. I'm going to have to figure it out how to do it in this way that would be more problematic, so it would probably be easier not to do this. So I'm not gonna do that and instead do more of the full-service accounting process as we go through. So what we're gonna do is we're going to say, okay, I did the invoice. Now I'm going to save receive payment. But because I'm getting cash in the same day, I wanna go through and deposited funds so that I can then deposit it so that when it hits the bank and I do the matching process, it'll be the same amount. I don't have to add two things together to match what's in the bank. So let's see what that looks like. I'm going to say, all right, let's let's say what happened at this point in time. We've got these two invoices. If I go to the balance sheet, we've got the invoices increase in the accounts receivable here. So we've got the invoices on for one, there's the two invoices. And then if I go back on over obviously on the income statement, we've got the two invoices. Income statement, sales item here. We should have the two invoices in here as well. So here's here's the two invoices there. Now we're going to receive the payment on both of them. So I'm going to go back on over and Sarah, now we're going to get paid. And let's imagine we're getting paid with cash this time because that's a typical way or like a credit card that groups it. That's when we need to use the and deposited funds. Oftentimes let's say we got customer 20, customer number 20. And let's say this happens on 45. And the payment method is cash. Let's say we got cash. So now we're going to take it to an deposited funds this time rather than go into the checking account. So I'm going to put it into an deposited funds is that's still going to be the new thing. That's what's different here. So then I'm going to record that. I'm going to match up the invoice. What's this gonna do? Decrease the accounts receivable. Other side not go into the checking account yet, but two on deposit funds. We got the cash in her hands. We're gonna go to the bank with, but we're not going to go to the bank at the end of the day with just that 100, we're going to go to the bank with whatever money we have that we have collected at the end of the day. So I'm going to say save it and knew it this time. Save it and knew it and we'll do the other one too. So this is going to be customer 21. And this happened on the same day that we got paid also cache got paid cash on that day. So we're gonna put that to and deposited funds and select the other invoice. So this is going to do the same thing. Increase or increase and deposited funds, not the checking account, other side decrease in accounts receivable. Let's save it and close it. Save it, and close it, save it and close it. And now we'll check it out, go onto the balance sheet, freshening up the report. And then we're going to say, all right, so now we've got the accounts receivable went down, AIR decrease on 45 for these two payments. And then an deposited funds then went up. It didn't go into the checking account, but rather on deposited funds that clear in account one that's going to go up and down. This is how much money we have at the end of 45 in cash in our hand, which we're going to go to the bank and deposit. When we go to the bank and deposit, it's going to be in there not as two separate deposits, but as one deposit unless we try to deposited separately, but we probably wouldn't want to do that because that's kind of a pain. So now we've got the Create Invoice and now we received payments. This time we put it into an deposited funds. Now I'm going to take it out and deposited funds, put it into the bank. And I'm just gonna, I'm not gonna try to make multiple deposits. I'm just going to group it in one deposit to the bank. Here's the money I got today, deposited in the bank. It's going to show them on the bank feeds as the lump deposit, not as two separate deposits, but we should be able to match it out then because it's going to record on our side, at least in the checking account with those two deposits grouped together. So let's check that out. So that's going to be the next step. Let's go to the item to the right. I'm going to say I'm going to do a new thing here. I'm going to say now we want to deposit it. So let's deposit these items. We're going into the bank. The bank at the end of the day. Now it's going to go into the checking account and we got these two items in and deposited funds, and we're just going to select those two items and deposits. Also note that before I do that, that it is possible that, that you can use the bank feeds at this stage, meaning, meaning, now we're here and we put it into an deposited funds. Instead of us recording the deposit, you could use the bank feeds, but you'd have the same kind of problem. Like, I mean, you could go back on over here and say, okay, what if now tried to go down and say, well, let's say I'm going to match it to the payments that we got. Now. I go to the matching system and then I want to make the date range go back a bit to one. And so now it, now you've got these two items that are payments, but you'd still have to check them off. So, so if, if for example you wanted the same kind of method that we did last time, you get you get the invoice and in the same payment amount. And you'd rather have it go through and deposited funds, invented the checking account with the help and the use of the bank feeds, you could use that method, but if you have multiple payments that are going to be grouped together, you still have this problem of having to check off these two payments to tie out to one deposit, which you can fix by basically record in the full-service thing within QuickBooks. So I'm going to uncheck those and say, all right, it'll be easier. If I have a lot of transactions, at least then to do this full service thing, I'm going to take these two amounts out of an deposit funds with a deposit form, put them into the bank, separate from the bank feeds as the lump-sum of 144, 17. Therefore, it'll go into the checking account as one lump sum, which is the same lump sum that we expect to see in the bank feats and on the bank statement, and it's going to come out of the deposited funds. So now I'm going to save it and close it. And then we'll check it out, save close, checking out back to the balance sheet, run it R9, and then now under positive funds back down to 0, if I go into and deposited funds, then it's back down to 0. Notice it did two separate transactions, even though it's with the same deposit here in an deposited funds. So we could do this nice ticking and tying within an deposited funds. But if I then go to the checking account up top into the checking account, then we see it should be in there as one lump sum. We see it here as one lump sum. And that's good because this is on our books, which should match out exactly to what's on the bank statement and on the bank feed. So now it makes it easy for us to match to the bank feeds. So now we're, now we are here. We've done the whole process, create an invoice, received payments for two invoices, deposit them into the bank and the same format as they expected to see in the bank feeds in the bank statement. And now we can simply go here in the, in. It will often then take this up automatically because the amount will be the same. So if I go into the find the match and then and then let's say at bringing us back. So I see the dates are a little older, and so now I've got that one deposit. So now it's easy for me to make the match. And again, the system will often do it electronically because the deposit should match exactly exactly on both sides. So I can then check this off. Once again, this will not record any transaction. Now it's not going to record it an increase to the checking account because we already increased the checking account. What it does do is match it out. So that helps us kinda with our reconciliation process. It's part of our reconciliation kind of process that we'll do. So we're going to go save it and close it. So that's the, that's the last kind of method there that we can use. Again, no new change to the financial statements at that point in time. But we helped with the reconciliation. So that's the full, full process that we have. We've, we've kinda inserted the bank feeds to every point in the process. Now the other methods you might have on the sale side is you create a sales receipt and have kind of a cash-basis system mean and you get paid at the same time that work is done like here, possibly do in cash sales at that point. Say you're at a store or something that you collect, cash at that point in time that you make the sales and whatnot, then you go to the bank and deposit that information or that money. And you might have that type of system, how to bank feeds fit into that type of system. We may take a look at that in future presentations. 20. 449 Bank Feeds Matching Sales Receipt: Quickbooks Online 2020, one big feeds, matching sales receipts with the bank feed data. Let's get into it with Intuit QuickBooks Online 2020. Here we are in our QuickBooks online bank feed, testfile and prior presentations, we set up the QuickBooks online bank feeds. And when we entered some transaction, some data into the system which is now in what I would call that bank feed limbo down in the transactions tab. And we are in the process of taking it out of bank fetal MBO, bringing it to the promise land of the financial statements being part of the actual financial statements. This time we're continuing on with the deposit side of things as we go through our process to think about where we stand at this point, let's look at the flowchart on the desktop version. You don't need the desktop version to follow along here, we just want to take a look at the flowchart within it. So we talked about the idea of the deposit side of things. The easiest way we could do this, wait till something clears the bank and then record that deposit using the bank feeds. But we might have a more complex system. For example, if we had an accrual system, we needed to track the accounts receivable. We talked about that process, invoice to receive payment, to record deposits in how the bank feeds can kind of fit in each one of those steps. Now, let's think about a system where we have a cash basis system. But it's not one in which we can just rely on the bank feeds. In other words, if we had something like a gig work type of situation where we're just waiting to get paid by like YouTube or something like that, or Amazon or something on for our audio books. Or we can just wait till it clears the bank and then we can use the bank feeds to record the sales at that point. But if we have something like we're making sales during the day, like a food truck type of system would imagine anything where we're going out, we're actually selling things, are providing services and we're collecting, say, cash or some other forms of payments. And then we're taking that money and go into the bank and depositing it at the end of the day. We don't typically then wants to wait until something clears the bank, but rather record the transactions when we make them if possible. And that situation, you could think about anything where you have like a cash register in front of you or something like that. And you're recording the information, say with a sales receipt as a point in time you make the sale. And let's imagine it's cash sales or like a food truck or something like that. Yeah. Make the sale you'll record the create the sales receipt. At the point in time the