Xero Accounting Software Bank Feeds | Robert Steele | Skillshare

Xero Accounting Software Bank Feeds

Robert Steele

Xero Accounting Software Bank Feeds

Robert Steele

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23 Lessons (4h 24m)
    • 1. Xero Skillshare

      1:56
    • 2. .10 Xero Free 30 Day Trial

      2:47
    • 3. 370 Add Expense transactions

      24:47
    • 4. 375 Add Capital Expenditures

      10:36
    • 5. 376 Add Capital Expenditures Part 2

      10:13
    • 6. 380 Add Inventory Purchase

      13:51
    • 7. 385 Add Amount Paid for Investment

      7:54
    • 8. 390 Add Owner Withdraws

      8:20
    • 9. 395 Add Bank Charge

      6:52
    • 10. 400 Sales Tax Calculation

      10:15
    • 11. 405 Deposit Loan

      11:15
    • 12. 405 Deposit Owner

      8:50
    • 13. 406 Bank Beginning Balance

      16:06
    • 14. 415 1 Upload Bank Transactions

      11:42
    • 15. 415 2 Add Expenses

      19:04
    • 16. 420 Add Insurance

      9:16
    • 17. 425 Add Payroll Checks

      16:38
    • 18. 430 1 Add Inventory

      9:16
    • 19. 430 2 Add Loan Payment

      11:26
    • 20. 435 Add Draw

      8:31
    • 21. 440 1 Receive Payments On Invoice

      14:50
    • 22. 440 2 One Deposit Two Invoices

      13:18
    • 23. 455 Sales Receipt & Bank Feeds

      15:53
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About This Class

Step by step project for Xero Accounting Software Bank feeds.

Learn how to set up bank feeds.

Understand how bank feeds work and how the data from the bank can be used to create financial statements.

Be able to create bank rules to simplify the process.

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Transcripts

1. Xero Skillshare: zero accounting software bank feeds zero is an accounting software. Very good accounting software comparable to a. QuickBooks, an online based accounting software, has a free 30 day trial currently and typically does have that free 30 day trial. Don't even need a credit card to sign up for it. That's a great tool toe. Learn something like the accounting software and the bank feeds within it. That's what this course is designed to dio. This course will be in a workbook or a problem kind of format. We will have the instructional videos on the right, and then we've got the information that you can use to work through the problem down below . Here is gonna be the bank feed information. The data file includes banking information that we can upload. We have a mock bank statement and then we have the C S V files with the banking information that we will walk through on how that import that information into the zero software so we can practice using the bank feeds. The course will walk through the process of signing up for the 30 day free trial and getting the bank feet set up and then talk about how to connect with the bank feeds, then go through the importing of the information so we could be working along with the same data set than taking those bank feet information out of the import kind of process that kind, like the limbo process within zero and then adding them to the financial statements that will be considering and taking a look at the financial statements with each step along the way. That being the balance sheet and the income statement, we'll do a similar kind of process for the credit card. Information will also take a look at some more specific or detailed bank rules. As we go through the process, please join us for zero accounting software bank feeds. It will be great at the end of the project. Note that you can take the financial statements as your as your end result and uploaded here or that could be here in project for this process. Those financial statements being created from the bank feed information we will be providing 2. .10 Xero Free 30 Day Trial: in his presentation will sign up with a 30 day free trial with X zero accounting software. Here we are on the X zero home page. That's x e r o dot com x e r o dot com. We're gonna go over to the pricing section here, but as we do so, remember that X zero typically has this 30 day free trial that they've been advertising for quite some time to get used to the software. Which is great, because if you're learning the saltwater or if you want to just test out the software or try to practice with it. Before you actually put your company data in there, you could do all those things with the 30 day free trial for our purposes again. It's great because X heroes of really good software and to be able to learn X zero within that 30 day free trial period is, ah, great opportunity as well. So if we go down, then we're going to see the pricing options. You see the pricing options down here, and we'll go over the pricing options a little bit more later. At this point in time, however, we're gonna be trying the free trial. So you note that they pretty much always have this free trial. They've been advertising. That is one of their kind of fundamental test drive kind of options for X zero. So it should be there unless they change kind of their strategy that they'll have this 30 day free trial available. So that's what we're going to sign up for. We're gonna say Enter, Of course, our information here for it. Next, you'll get a screen to check your inbox for your email. So you put your email address and they're going to send you an email, and then we need to set our password, and I'm gonna be sitting being in the United States here. So I'm in the United States going to be adding the password. So then we're gonna add our company information. We're going to say our mock file is gonna be the get great guitars. That's gonna be our company file that we're going to set up. I'm in the United States. I'm gonna be based in this in the United States in the Pacific time zone. So I'll go with the Pacific time zone for me, and then it's gonna be on. Um, I put online retailing for the organization What it does just because I wanted to find something in the drop down that would match it. And what was your previous accounting software? Now, you may not need to put a previous accounting software here because, you know, it might be a first. You know, you might be starting from scratch. However, if you have a previous accounting software such as the ones here and you have previous data , you may be able then to transfer that data in. So then, if I put quickbooks online, for example, it says want to convert your QuickBooks data for free, and and then you can go through the conversion process. We're not gonna do that here. We're going to start a new company from scratch. So then I'm gonna go ahead and say I want to start the trial, so I'm gonna go right into the start the trial. And there it is. Now we have we're into the X zero software. And like I said, we have the 30 day free trial period to kind of test things out and work through as we will dio. I were practice problem 3. 370 Add Expense transactions: in this presentation, and we're gonna add and expense transactions as we go through our bank feeds. In other words, we've entered the bank feed information. We're gonna have transactions. One of them, being on expense related transaction, will pick about how to use those bank fees in order to help us to create that expense transaction that will then be populated or help us the populate and creates the financial statements. Here we go with zero. Here we are in our triple G dashboard. We're going to start off by opening up our financial statements. We haven't added anything to the financial statements yet, but we want to think about what's going to be the effect on the financial State AB statements as we do. So as we enter this information into the bank feeds, so we're gonna go to the accounting drop down, we're gonna go down to the balance sheets of the balance. It's going to be one of our two major reports. Once that opens up, we're gonna duplicate the tab, and we're going to duplicate the tab by going up top onto the tab, right clicking on that tab, and then we'll duplicate it and What will happen is we'll put our reports to the right, and then we'll do our bank feed transactions on on the left and will be able to jump back and forth and kind of see what is happening to the financial statements as we do stuff to the bank feats and how we're gonna go back the left. We'll do this again to the other major reports. That being the income statement going down to the accounting drop down the income statements gonna be in the favorite reports as well. So we're gonna pick up the income statement. When that opens up, we're going to duplicate the tab, as we did with the balance sheet by going onto the tab up top, going to right click on that tab and duplicate that tab. So we have our two major reports or financial statements the balance sheet. If I go into the balance sheet now, I'm gonna just the date we will be working in 2020 so I'm going to select the dates drop down. We're gonna bring this on up to February, February 29th. So there we go. We're gonna update that. And again, nothing's there even though we entered the bank feet because we injured the bank fees and I call them like I would think of him, like in limbo. Right now, they're in limbo there in the system, but they're not in the financial statements. And the same is going to be true for, of course, the income statement. Some nothing is there as of yet. Now let's go back to the first tab where we will take a look at the bank feed transaction. So if we go back to the dashboards, remember, there's a couple different ways you can get into the bank feet. So you might be dealing with people that like to go into the bank feeds by going down on from the dashboard to the checking account down here. Or you could go up top and go to the accounting, drop down and go to the bank accounts, and that'll list out the bank account. So then, if we go into the and remember this bank account just to just to let you know if you have credit cards as well, they're also gonna be here in the bank accounts, even though you think that even knows those like liabilities, which she could seem a little weird at first. But that's because there's bank feeds to them. So they're they're really financial institution type of accounts where we could get bank feet type of accounts. So many kids we want to be in here, and we've got the 13 transactions that we want Teoh or items that we want to records. I'm going to select those items. And then we were left off here last time where we have basically the bank information on the left and then the book information on the right. I'm gonna hold down control and screw up a little bit so that we'll zoom in a little bit at the 1 to 5 with 1 to 5. Now we're on the reconcile tab. There's three times as the bank information. There's the account. Transactions were on the first have this reconcile ing tab. We have information on the left directly from the bank. Nothing on the right because that's the book information and we haven't entered the books. So we're doing this whole thing from the bank. I'm basically a cash basis type of system, and we'll talk about, you know, deviating from that at a later time. So if I look through these transactions, then went on to say Okay, how can I add these to our system? I want to start off with a new expense. That's a fairly straightforward expense that we would expect to see often, you know, something like an Edison. That's gonna be our utility bill. So let's go down to the bottom one and start with this one. What would we do with regards to Edison? We know it's gonna be a utility bill. Now we could We have to enter it into the system. So there's a couple ways that we could do this so we could go over here. And this is kind of like a quick data input screen. It's gonna be a quick, you know, form that allows us to input as we go. So that's one thing we can dio we can go in, and we can actually look at the form that would be used to enter a normal data input, meaning it would be some kind of check or cash going out a payment type form. And then it would match up over here, uh, and or most likely for most of these that we know we're gonna are going to repeat. We can also make basically a rule. I can say it every time I see that. So that next month, when Edison comes up, I want you to basically create this transaction automatically. So let's look at a couple of these methods first. Let's let's think about making the Edison bill as if we were gonna make it with an actual form so you could see what form would typically be used. So let's do that. First, I'm gonna do this a couple different ways. We gonna go up top. We're gonna right click on this tab again. Duplicate the tab again. So now we have our balance sheet, our income statement, and then our bank feeds on the left. And then we're gonna be working on this tab now, Normally, if you were gonna enter in the book side of things, you know, cash going out of the checking account. Ah, it would be something like this. We would go up top here. I'm gonna slick the plus button, and then I'm gonna go down, and we're going to say that this is going to be spending money. So we're gonna use, like, a spend money type of data input form. So this is the normal form that she would have for basically money going out spending money . It would be coming out of the checking account. So it's gonna go out of the checking account. No, no, there's nothing in the checking account this time. At least with regards to zero. There's money in the checking account for our financial statement, but we haven't entered the beginning balances well, and we'll have to deal with that at a later time as well. So now we're just gonna do with the activity. So we're going to say to I'm going to say, EDIs, son, and I'm going to say that this is on. I'm just gonna use the same date Now notice if it was a check, it would be some date before this. If we're relying on the bank, then like normally, I would enter the transaction when it actually happened. If I wrote a check and that would be some time before it cleared the bank, which is March 31st. But if we're completely dependent on the bank, then I'll just use the bank date. It's not, You know, it doesn't happen till it cleared the bank. Because that's what we're what we're using. So I'm going to stay here that it's March 31st. So we'll say that. And we're going to see the quantity and say one, and the price would be for the 620 so I'm gonna say 6 to 0. The account that would be affected would be some kind of utilities. So I'm going to see if they have one here and expense account for utilities insurance that Ah, I don't see one. So I'm gonna put it into I'm gonna make it for the account number. Let's make it. Ah, 6335 is the number 6335633 I'm gonna make another account, That's what. In case you didn't see that up top, I'm making another account so hidden here, I'm gonna make another account as we dio because it wasn't one set up for us. And it's gonna be, ah, code number 6335 I'm putting it kind of in where all the other expenses are By doing that and then the account type, I'm going to say is it extends type of account is gonna be just on expense, type of account. Um, under the expenses, an expense type of account. And then I'm gonna call it you till it Teoh. Still that right? Yes. Okay. Utilities, all right. And it's an expense type key here. Expense, type of account. Then we're going to say save. And that would be our normal type of transaction. Right? This would be us recording it on the book side of things. And if it was a Czech, weaken right, you know, check off it. It's a check number here. If it's an electronic transfer, we could use the same form without checking off the check number. Now, let's go ahead and save this. So if we record this now, we have now recorded it on the book side of things. So there it is. If I go then back to the bank reconciliation, I'm going to refresh the screen by selecting this little I come up top or you can click on like the entire u R L and just click enter on your keyboard. Then I'll refresh the screen. And if I go, then back down it should find that one. So now it's saying, Hey, here's the books at Here's the bank side of things Here's the book side of things they match. Now it's on the first habit saying, Hey, it matches at this point. Is that the right? So it's asking us at this time. Is that the right one? And if it is, we'll just say OK and that will reconcile it. So in other words, if I go back up top here, you'll note we're on the reconcile ing tab on the bank statement tab. This is all our bank information that basically we put in there from the bank feed. We basically did put in there from the basic from the bank feats. Not really. Basically, that's what happened. And then here's on the book side of things. If I go to the account transactions, this is what we have entered on the book side of things, which is just that 620 which we made based on the reconciliation data. So that's one way you can do that. And the reason I wanted to kind of show that is because that's the actual form. This is the actual form you attack you would use if I go to the second time here, um, that you would be using this cash out type of form. And that would be the normal form that would drive the transaction if I went to the to the balance sheet then and if I was to update the balance sheet and I'm going to go ahead and update here with a little update button now and I'm gonna bring this out, Teoh not to February to march. We want to bring the and now update it. Now something should happen. And then I go back down. There is the 620. So we have the 620 on the liability notice. The checking account is under liabilities and not assets. Because it's overdrawn. We'll have to deal with the beginning balance as well. So we'll deal with that later presentation. I'm just gonna do the transactions. The activity which will result in a negative amount Right now, the other side went toe equity. So there's the other side. If I was into to go into that 620 notice the source form, which is like the form that we input is called a spend money for him. So that's the form that we used. That's usually the form for money going out type of transaction. If I go then in to that 6 20 again, we're gonna actually go to that form, which is a spend money for him. This is what we entered the transaction as That's normally how that's the normal form that you would enter the transaction as so Now I'm going to go back up now. On the other side, of course, goes Well, let's go back out to the balance sheet back to the balance sheet and back to the balance sheet. I'm going back again to get to the balance sheet. Now the other side of the transaction will typically be on the income statement. We entered it an expense. So the other side's gonna be on the income statement. If I go go here, update the income statement, then we're going to say, OK, there's there's the 620 expense. We don't have any income yet, and there we have the loss. So that's the effect on the financial statements. Okay, so now what I'm gonna do is I'm basically gonna delete that transaction and see how we can enter it in a different way. So I'm gonna go back to the balance sheet, let's drill back down into it, and then I'm gonna basically remove it. So I'm gonna go back into the chase. That's 620 gonna go back into their and then I'm gonna go back into the transaction by just selecting that transaction. Okay, here is the transaction. I'm gonna edit this transaction now. We're actually I'm just gonna go to the options up top and remove. I'm gonna remove and reduce. I'm gonna remove the transaction up here, and so we'll remove it. And there it is. Now, let's go back to the balance sheet. I'm gonna go back here and back till we get to the balance sheet. And if this going back is confusing you than just opened up the balance sheet again, and then you could get ah, Then you could get back to it. Then I'm gonna update the balance sheet report, and now there's nothing in it again. Nothing's in the balance sheet. If I go to the income statement and update the income statement, it should remove the transaction. Now we're back to nothing in it. So let's go back to the bank reconciliation. I'm going to refresh the screen as well down here before I refresh it. We have this this item, we could match it out. I mean, we could have matched it out, but now I deleted that transaction. So we're gonna go back up top, and I'm going to remove this. I'm gonna refresh the screen, and that should remove that transaction. Now, the other way that we can enter this transaction is we could weaken, use the same kind of process interest than money, type of form. But we can do it in, like a quick method. We could do it just with the items over here. So you'll note we have three taps match that when we saw before. When that When the systems trying to match up a transaction that's already been input into the system or we got to create. And then we have the discuss the discusses a nice tab. If you have multiple people that that used the accounting software, you don't know you know how to match something out. You could say Hey, here's a note I need to ask somebody else. You know that using the system. And you could put that here and someone else that goes into the system that knows about that particular part of the system may be able to answer that note, and you can kind of work with multiple people. With that, I'm gonna go back to the create tab. So then we can use this as kind of a quick create. So we're gonna basically make a spend money form and a shortened way just right in right in , You know, the reconciliation system. So we could we could put the who and the what? Which is the account right here, which would be utilities and a description right in here. Or we can add more details. Let's take a look with the add details would look like if we go into the add details option down here again. We're on the right hand side, entering basically the book information, and and we have a similar field as we would for the Paye pay field, which is going to be I'm gonna put Edison, and you can often times just copy and paste, you know, Edison up top you can copy it down here and put it down into the venture. Oftentimes this item up here will, of course, be the vendor oftentimes. And it's gonna be as of the 31st Remember? That's not when we actually wrote the check. That's simply when it cleared the bank, we probably wrote it. We created it sometime before that. If it was a check, it could've been a while before that because it takes time to clear an intern. Clear if it was an electronic transfer is probably pretty close within, like, three days. And so we're not gonna have an item that item typically deals with, like, inventory items. So if we don't have inventory, we're not gonna typically be doing the item tab. Usually, we have to put a one here because it always calculates the same way. And that's a way for zero to use kind of the same data input form for multiple kind of transactions. So it's kind of standardized, and then we have the 6 20 the account we set up with utilities. Now, remember, when you set up, you might have to set up accounts over here as you go when you do this type of process, Uh, zero will give you a lot of the accounts. So you want to check and see if they're in zero? If they're in zero, then use that account, and then if you want to kind of be in the used these account numbers, you know, or the you know, the code numbers to the right. So, in other words, like we did when we entered this, we looked up. You know what's the appropriate code? Or I want this somewhere in the expenses, the expenses have six something next to it. So I want to find something in the six something area and line up the number here. If you don't use an account number or code number, it's not, you know, the end of the world, but it's gonna be easier to use certain functions if you If you use those code numbers and you want to be basically the way you do that is you basically kind of be within the number scheme, the number arrangement that is here. So we're gonna be put in utilities, utilities and no, there's no tax rate, so that's gonna be it. So there's the 620. And so again, we just basically entered the payment. What does this do it just like it did with the with the other. Input the bill. It's gonna decrease the checking account. We don't have anything in it, so it's gonna go negative. It's gonna create a liability. And the other side's gonna go to the expense account, which will be utilities and the vendor. Then, if we ran a report by vendor would be Edison. So let's say that transaction and you'll see by doing that, we ate. We basically entered the book side of things already. So we entered a transaction. Same kind of transaction in the system, just from a different data input screen. So if I go back to the battle sheet, for example, and then I was to update the balance sheet, then we're back. We're back at that six twenties back, right? So we've entered our side. It's a liability because we're overdrawn because we don't have the beginning balance. We'll talk about that later, so we're gonna have ah liability here. We're gonna go to the income statement, and if I was to update the income statement then once again we're back at that 620. We've increased the 6 20 If we go back to the first tab and we were to select the banking or account transaction information, this would be on our side. We have entered this information on our side. It's unreconciled at this point in time until we match it out using the reconcile process over here. So then if we go back to the first tab, we're gonna go back to the Reconcile tab and going back down again. We have the option now of reconcile in. Okay, so let's do the 3rd 3rd way to do this. Just one more time I'm gonna actually delete this again. So I'm gonna go back over here and I'm going to delete this transaction. I'm gonna go into it. I'm gonna drill down into it and say, Let's say if we could do this one different way and this was this next way is probably the most common way when you have repeated transactions and that's gonna be hey, save the transaction. So when you do the same thing next time, right, So I'm gonna go back in here and I'm gonna say remove, remove this transaction, please. And so now it's gone again. I'm gonna go back into the balance sheet this time by hitting the accounts, drop down accounting, dropped down a balance sheet, and then we'll just go right back into it, and we will update the date bringing it back up to march. So I'm gonna bring this back up to March, March 31st and update So once again, nothing's there. Nothing's on the income statement. If I updated, I'm gonna update the income statement once again. We have no data there. And if I go back to the balance sheet and refresh with this little button right here, or you can just highlight the whole u R l and re enter it and then we're gonna go back down . Okay, Let's do this again. We're gonna do it again, and we're going to say, All right now, there's nothing over here again. Well, what do you normally deal? Edison's gonna pop up all the time, like I want to see it next month. Then what I want to do is I'm gonna go. All right? Let's go to the options down below, and I want to create a bank rule for it. And this is gonna be the thing you'll dio whenever you can. Whenever you could set up a bank rule that's gonna help you as as this goes through. So it's a spend money rule as opposed to receive money rule or a transfer money rule. Because, obviously, you know we're spending money. The money is going out when money spent on the bank statement matches all of the following conditions. Now you could say all conditions or some conditions. You might want to make it more broad. You might say any condition instead of all conditions, because what it's doing is it's picking all of the condition. It's defaulting to the most stringent type of rule. But you may not want the most stringent type of rule you may have, say, every time it goes to Edison. Every time you see Edison, I don't care if it as Edison and something else or Edison 123 after it. If it says Edison, it should be going to the utility. That's basically the rule that we want to put here, and that's a broader rule, then would be the default, because the default here is picking up all the information that it has from the bank feet typically. So this payee field, the payee field, is blink. I'm gonna say that's okay. I'm just gonna remove that rule altogether. I don't need a blank pe e field if it's blank or not blank. You know, I'm removing that rule. The 2nd 1 is the description. So if I select the description field, we want the description field either to equal or contain Now again, I don't care if it's I mean, if you get a bank feet, it might say, like Edison, you know, to five for some kind of weirdness that transferred over on the description. If that's if it says 254 I don't want tea, not pick up the Edison. And so what I want is a more broad category, typically here, and we'll talk more about these when we when we talk about the rules in general at a later time. But generally here, if you're just adding the rule, I was going to say I just needed to contain Edison. I don't need it to be like exact ifit's Edison anywhere in there if it says Edison to 54 you know, I still want you to pick it up. So we're gonna say Edison, and then set the contact so contact will be and existing or new contact. So the payee from the bank or entering during the reconciliation Now I'm just always gonna be picking up that it's gonna be Edison. So I'm going to say I want to contact to be Edison, which is going to be an existing or new contact. So if you don't have Edison set up, it will set up a new contact, which will be a vendor. Basically, you could think of it. And if its existing, it'll pick up that existing contact So you don't want to duplicate your contacts going double check to make sure that you spelled it right and everything. So you'll have, like to Edison's in there automatically allocate fixed value line items. We don't have anything that we need here, so we'll typically leave that because we're gonna have the whole thing going to one account and then with the remainder allocate items to the following on the following ratios, and we're not gonna have we're gonna just have 100% of our ratio. Is it gonna be utilities, you Teoh teas and the accounts gonna be the utilities account that we have set up no tax and obviously again, 100% going to utilities. If we needed to break it out between multiple accounts on a percentage basis, you can see that you can do that here by adding another line and doing that, we may look at that when we get into more complex bank rules. Number five set the reference. I'm gonna keep the default, which is by me during the bank wreck number six, target a bank account. Now we have Here are current bank account that we're on. You could select all bank accounts, which could be appropriate. If you see Edison, you want all bank accounts? Possibly. But we're gonna add a checking account later, and we might want to look at that a little bit differently. So I'm gonna just select this account for now again. You might just want to do all accounts, however depending again, it depends on the situation. But if you got the vendor lined up and you know that's gonna be the same account that will be related to that vendor, each time you may want to do that. Give the rule a title so we can call it, you know, the Edison rule. That's gonna be the name of the vendor. So typically you might. You might wanna name it by the vendor or some other type of rule. Possibly utilities sub rule that you could go back in and see that rule in case you need to adjust it sometime in the future. So then we're gonna go ahead and save that, and then I'll go back down and and we'll see it here now it basically has the create. So it created this item with regards to our bank rule. Apply the Edison. That's the rule that it's applying its applying the rule of Edison. Because that's what we named it. You'll recall, And then we could save you the detail. And there's going to be the detail of it. Utilities one, the 6 20 It created this now, So now we didn't make the form. We're telling it. Hey, you know, do this bank rule every time you every time and it's gonna it's gonna create it for us. If that looks good, we're gonna go ahead and save the transaction. So I like that. You know, we could basically go back in there and check the transaction and kind of and kind of save it in case something goes wrong. Basically. So and then we still have this reconciliation. So now we have the match happening. It's gonna created automatically for us for the rule, and then we could just basically check it off. Now, this is probably the format you're gonna have most of the time with, with, you know, the repeating type of expenses. So I'm gonna say okay. And then we'll check that one off once again. If we go back up to the balance sheet and I update the balance sheets, then we're back to having that 6 20 back in there like we saw before. If I go to the income statement and update the income statement, then again, we're back to having that 6 20 there. It's creating our financial statements now, as we do this. And then if I go back to our bank statement tab, this is our reconciliation. We did that one. We were at 13. Now we're at 12. The bank statement still has our bank statement information on it. However, this item is now reconciled. So the 6 20 we reconciled, meaning we matched the bank and our books. We created our books from the bank and then matched them. And then on the book side of things, we now have one transaction, one transaction that we created from the bank feats. We took the bank feed information used that in order to generate one transaction. So we'll continue on with the 12 other items in future presentations. That's it for now. Let's get out of here. 4. 375 Add Capital Expenditures: In this presentation, we will add capital expenditures using bank feeds. In other words, they're gonna be purchases for capital expenditures or property, plant and equipment PP and e that we're going to record with the use of bank feeds, adding that information into our financial statements. Here we go with zero. Here we are in our triple G dashboard. We're gonna start off by opening up by our financial statements. We're gonna go to the account and drop down and go on down to the balance sheet First will be opening up the balance sheet. When that opens up, we're going to duplicate the tab. I go into the tap up top, right, clicking on that tab, duplicating that tab. We're going to the same thing for the income statement. Go into the tap to the left, opening up the income statement by going to the accounting and dropped down and then going on down to the income statement. When the income statement then opens, we're gonna go to the tab up top, right click on that tab up top and duplicated once again. Let's go on back to the battle sheet which is on the tap to the right this time and we will be updating the date. So I'm gonna select a date so we can update it, and then we're gonna go up to march. We want to be up in March of this time. I'm gonna pick the right date this time as we start off and update that report. And this is all we've constructed so far. Is that one transaction going to the income statement and we're gonna check out. That's all we have in the income statement of thus far. Now we're gonna go Teoh the first tab, go back to the dashboard, We're gonna go into our banking information, which can be found on the dashboard by going to the checking area down below. Or you can go to the account, drop accounting, drop down up top and go to the bank accounts, which is what we'll do here I count in and then the bank accounts. And then we have these 12 transactions that we need to reconcile. So we're gonna be reconcile in these 12 transactions, which means we're basically going to be adding in our case, transactions to the books from the bank feeds. So we've got this information on the bank feed side of things were on the reconcile ing tab or on the bank feet side of things. And this is the information in the book side of things. We're gonna go in and pick and choose what we want to be adding at this time, this one. We want to add Office Depot down here. So Office Depot has 16,000 now. Office Depot is one of those vendors, which is a little bit confusing because it might not be a repetitive thing. We might, by multiple things from Office Depot, for example, we might buy office supplies, which would put in office supplies expense. Or if we purchase something that's like large, like equipment or furniture in this case, then we would put it into a different account. So we can't. It's difficult to make the bank rule that way. We could do that, and we will, like, think of options in the future, meaning, we might say, if it's over a certain dollar amount, put it in a different account, or at least tell us about it. Maybe, And if it's under a certain dollar amount, maybe just put it into office supplies we could do something like that. But for right now, we're just gonna add this as we go. So I'm gonna add this as we go. We're gonna go to the right. I'm not gonna make a rule for it. I'm just going to simply go down and add this. Now we can add this in the quick adhere, which would basically be Who's it from Office Depot and what the account number of the account. And that's it. That's basically all the detail you need. You can have a description. Basically we But we purchase office equipment or furniture, or you can go to the more detail down below and we can have more more details so we can see this again. Oftentimes, you could just basically copy the description up top as the vendor. So this description often times could be copied as the vendor. I'm just going to say, Let's take that, Copy it, bring it down here, and that'll be who is going to? You don't want to set up multiple vendors. So? So if you know, if there's a one spelling error that's off. You want to make sure that you're picking up one vendor so you don't have, like, a whole bunch of different vendors or contacts. Then I'm gonna pick up the date it's picking up the date that came from the bank feed. Remember, this isn't necessarily the date. If we'd wrote a check here, it could be really different that when we'd wrote the check as to when it cleared the bank . If it's an Elektronik transfer, it'll be pretty close. But we're waiting until it hits the bank, so that means that's just the way we're doing it. We're lagging until it clears the bank. We don't really know about it. That's kind of a system we're using. There's pros and cons to that, but that's what it is. So we're gonna be saying all right, that's when it cleared the bank. That's gonna be the date item. There's no item because this is not an inventory item. The description is just Office Depot. That's fine. We might want to put in the description what we purchased office furniture or something like that, and give him or the description on what we got and then the price is going to be the 16,000 now, the account not going to be going to an extensive this time because we purchased a large item and for taxes as force and bookkeeping. Even if you're on a cash basis and we paid cash for it as we did here, you gotta put it on the books as an asset typically, and then depreciate it. So that's gonna be the difference here. We need to put it on the books as an asset instead of an expense account. So I'm gonna go back up top, and I'm going to say, All right, let's look for an asset. Do we have These are the type of assets over here we're looking for, like computer and office equipment. That might work. I could make another one called furniture and fixture, possibly. And maybe we could do that. I'll set that up just to practice it. So this is a count 15. 20. I'm going to set up an account 15. 25 Let's say 15 25. So I go back up top, I'm gonna add an account, and I'm gonna say 1525 and this is going to be the account type is gonna be an asset accounts. It's an asset account and it's gonna be a fixed asset. Wanted a fixed asset that's appreciable. Assets, property, plant and equipment all kind of the same, different names for the same thing. And then we're gonna put this into a furniture and fix Jurors account. So there it is, strolling on down. We're gonna save that. And there's our detail. So then once I saved this transaction, it will record it on our side. Right? So I'm gonna save the transaction. And at that point in time, now we have the transaction on our side. So even if I don't reconcile, it's there. But it's not reconciled now. So if I go to the balance sheet and if I was to update the balance sheet even though I haven't reconciled that I say update and I'm gonna see All right, let's go down. Now we have the furniture and fixtures here has been added. So if I go into the furniture and fixtures and check that out, we're gonna zoom into it and see what what's being constructed. As we add these from the from the bank feeds. There it is notices using a spend money form. We didn't actually go into the spend money form. We created basically that that one form that's gonna be the default kind of form as we entered the information. But it's still a spend money form, so it's going to go basically back to that form because that's the form we always typically use. When money's going out going back to the prior screen back to the balance sheet, the other side is going to be in the checking account. Now notice the checking accounts in the liability section. Why? Because it's overdrawn, which means, you know, it's got a negative balance in it. And it will until we enter the beginning balance, which will talk about doing later. And that's gonna be another common issue that people have with bank fees were only entering the data right now, and we had we enter the data before we had the beginning balance. We're gonna have to add the at the beginning balance so it won't be a problem. We'll show you how to do that at a later time, but until that happens, we're gonna have the negative account in the checking account. If we go into it, then of course we will find that transaction once again down here, which is going to be the decrease of the 16,000. So then I'm gonna go back, back, over and there there we have it now in the income statement. No effect on the income statement from this transaction because we put it on the books as an as an asset. When will the income statement be affected? When we depreciate it. So when we depreciate it, then we'll expense it in the form of depreciation. That's how it works with, you know, the bigger assets. If we go back over here to the first tab and take a look at the bank statements, the bank statement still includes the 13 items and only the one reconciled. We haven't reconciled that the equipment yet. One, This one's not reconciled yet. If I go back to the accounts transactions, then we do have the accounts transaction over here, but it's again not reconciled. Now it's reconcile it. We're gonna go back to the first tab, and I'm gonna go back down, and we're going to reconcile it now because we didn't make a bank rule about it next time. If this happens again, we're gonna have to we're gonna have to do the same thing, will set up an account and we'll do the same thing for it. And we're gonna do those for those types of items where we can't really set up a rule. We need to kind of check it each time. And so we'll talk more about rules that might be more appropriate when we have those kind of those kind of areas that we're not totally sure about. Ah, and so we'll talk about that later. But for now, we're gonna go ahead and say, Okay, now it's been reconciled. So what does that do? That means on the bank statement over here. If I go to the second tab, you're going to see it's going to be reconciled now for that uh, 16,000. And if we go to the accounts transaction, it has been reconciled. Now, these two is what we're making. This is what we're making now from the bank statement. Now I think that does This term reconcile is a was a little bit confusing. People think that this is actually what it means. Toe have a bank reconciliation. This is the process of us making a bank reconciliation, and we'll talk about the bank reconciliation report that we still need to process. We still should be looking at the bank reconciliation report that will be created as we kind of reconcile this information. So in other words, you couldn't really print this off, screen out and say, Hey, this is the reconciliation report. We still need to go into the bank reconciliation report. And if you're looking into it like how do you do a bank reconciliation, then this is kind of the process of us doing it as we go. However, this isn't really the bank reconciliation so well. Actually look at the at the report and see how this ties into the doing of the bank reconciliation report as we do these bank fees and as we can kind of check them off as we go. That's a nice feature toe. Help us out with the reconciliation process, but we should still be looking at the actual bank reconciliation. So in the case, we'll talk about that in a future presentation. That's it for now. Let's get out of here and 5. 376 Add Capital Expenditures Part 2: in this presentation, we're gonna add another transaction related to a capital expenditure. A purchase of property, plant and equipment or depreciate ble assets using bank feeds. Here we go. 10 We are in our triple G dashboard for zero. We're gonna be opening up our financial statements by going to the accounting drop down. We're gonna be opening up the balance sheet. Let's open up. That'll balance sheet. We're gonna be duplicating the tab by going on that tab up top, right, clicking on it, duplicating that tab balance sheet on the right. Then we got back to the left list of the income statement. Now, I'm gonna go back to the accountant, drop down. We're going to go back on down to that income statement. So we're gonna go into the income statement and open that up, and then I'm gonna go back up top, right click on the tab up top and duplicate that time I'm gonna open one other report. That's gonna be the reconciliation reports, but kind of get an idea of its reconciliation thing, as we do it actually report related to it. So we're gonna go back to the I count in dropped down again this time like, let's go to the reports. We're gonna go on down on the reports, we're gonna be picking up that reconciliation reports. If I go down, that's gonna be under the accounting section. So it's gonna be down here into the counting as if it's the only the account like the accountants. The only one that cares about it should be like you know, Anyway, it's gonna be a bank reconciliation summary report. We're gonna go to the bank reconciliation summary report. I'm gonna go back up top, and I'm going to duplicate that tab. So now we've got our three reports. We got our balance sheet. Let's go back to the battleship and update the dates. Now, this is going to be going up through March, so I'm gonna pick that sub up through March March 31st and update that report. Here's what we have thus far the income statement. We're gonna go ahead and that one's all up to date. That was good to go. The bank reconciliation. Let's make the bank reconciliation for the chase account. I'm gonna hold down control and scroll up a bit, so we're at, like the 125 zoom so we can see stuff and then we want the date to be march So march the end of March. So there we have it. We're gonna update that one. So this is this is the bank reconciliation and the way your way you're seeing the bank reconciliation. It's gonna be taken us from the balance on our books to the balance that should be on the bank statement. So in other words, we have on our books a negative 16 6 20 because we're overdrawn. That's what's on the balance sheet over here. So on the balance sheet, that's what we That's what we currently have, this negative or liability of the 16 6 20 And then if I go back over to the bank reconciliation now, that's of course, because we haven't entered the beginning balance, and then we're gonna compare that we still have to compare it on a monthly basis. So here's our our bank statement that that the Indian balance, as of the bank statement, is the 1 90 is 17 90,028. So we should be at this number. We're not there. Why? Well, one big factor we haven't entered the beginning balance. We're gonna have to deal with that. T go into that. And then we have to enter all you know, the rest of the transactions now, because we are doing this directly from the bank and not entering it into the books and then doing the banks once we tie everything out the beginning, balances and everything else we should reconcile exactly. In other words, what's gonna happen is these items that are that are unreconciled. They're all going to go away as we start to reconcile them and then are beginning these two balances will be the same the book balances and the balance for for the bank. Now, that wouldn't be the case if we were doing a full service accounting system because we would have outstanding checks and outstanding deposits. Those checks that we've written that haven't cleared the bank yet. But if we're completely dependent on the bake, wait until they clear the bank. These two things will be the same thing. But notice whether whether you're dependent on the bank or not, whether you have outstanding items or not, you still want to do that reconciliation and tied out to the bank statement on a monthly kind of basis and what we're doing when we do the bank reconciliation is we're basically, you know, we're removing all the outstanding items. Once all these outstanding items are removed, then we'll be reconciled again. It'll be exact because we're dependent on the bank were completely dependent on the bank under this method on a cash basis method. But it was a full service accounting method. We wouldn't be We would have a record selling item, which would still be the outstanding checks or deposits that we know we written that haven't clear. All right, so let's see how this is gonna be changing as we enter transaction. So let's go back to the to the dashboard in the first town, and then we're going to be going back to the accounting. Let's go to the county, drop down and go to the banks. So now we're gonna enter another bank fee transaction and the bank feet transaction this time is going to be for Amazon down here, so I'm gonna go to 11 transactions left. I'm going to go into that number 11 and then I'm going to scroll on down and there was one for Amazon is the next one we want to do over a year. And it was a large purchase. Here it is. Ah, 7000. Same kind of thing. If we purchased from Amazon. You may have Amazon that that, like some people, have Amazon, they're getting money from Amazon. But it could be for multiple things. Threat. You might have affiliate marketing. You might get money from, you know, books or audible or, you know, something like that. And on the expense side of things again, we could be spending a lot of different things for Amazon for our business. So it's one of those vendors. It's a little bit more difficult to make the bake rule for We'll talk about different ways . We could think about making bank rules. But for now, we're going to say, I know what we purchased here. It was a large item, and therefore we're going to put it on the books as a nascent type of a thing. So it's gonna be I'm acid account. We could do that by just saying who vendor Amazon will have Amazon. What account? It would put the account and in the description or weaken Gautam or detail down here and say, Let's look at the full detailed form. I'm gonna pick up the vendor by just copying the description. So this is the description which I'm gonna copy to the vendor and I'm gonna add a new vendor. So new contact, which will be a vendor. The dates being picked up from the bank feed. So we're reliant on when it cleared the bait. That's fine. No item, because we're not dealing with inventory. Amazon is gonna be the description. We might want to put what we purchase, like furniture and fixture here and describe that for more detail. I won't do that now, however, and then the account. Once again, it's gonna be that account, furniture and fixture. So it's gonna be going into furniture and fixture and there is no tax. There's our transaction. So then if I was to save this transaction now, it has been saved and we have it on our side, so we haven't matched it yet. It's on our side. So let's just consider what's going on now. If I go back to the balance sheet before I match it, I haven't matched it but I've added it to our books. I'm gonna update our books now, updating here. Then I could go down and say OK, furniture and fixture. Now if I go into it, this is a balance sheet account rather than income statement account. If I go into the furniture and fixtures, we should see our transaction and it's gonna be a money out type of transaction against money out type of form. There's the 7000. So then the other side is gonna be I'm going back with the arrow of top of going back. The other side is going to be in the checking account and it's gonna be down here in the liabilities because the checking account's overdrawn until we entered the beginning balance and it's gonna be a decrease for checking so I won't go into it here. That's pretty clear. And then the equity is the difference between the assets and the liabilities on the income statement. No change to the income statement, because once again it went to an expense account win. Will it affect the income statement when we depreciated? Because it's property, plant and equipment on the reconcile ing items it's still showing his outstanding. Here it is Amazon. It's outstanding. Once we reconcile it, it'll disappear from this outstanding item. And that's gonna be one less transaction for us to kind of reconcile the the bank balance and the statement balance. So the bank, I mean, ah, book balances, right. That's what's on the books. The statement balance should be tying out to the statement. It doesn't typically, it would, when we get all the cleared or outstanding items out of the way, except for the fact that this is the 1st 1 we're dealing with and we have to add the beginning balance, which again we'll talk about it a later time. So if I go back to the first tab then and we say okay and just so you know, on this side, too, if we say okay, what's going on here? Well, the bank statement. If I go to the bank statement tab, it's going to be here. It's here because we uploaded it, but it's not yet reconciled. If I go to the accounting tab account taps our books, we have now added it, but it's not been reconciled. Now we'll reconcile it so it's go the reconciliations Okay, What's gonna happen if I reconcile it? I'm gonna go back down here and say, Let's test this out. Let's say, Okay, I'm gonna go. So let's reconcile that. Bills to match were on the matching thing. Match him out. What happens then? Well, if if I go to the thanks statement time, then it's now there and it says reconciled next to it. Right? So now it's there and reconciled. If I go to the accounts transaction tab, it's going to be there and reconcile. So we're creating this as we go and checking it off as we go, because obviously if we took this information directly from the bank, it's cleared the bank. And then what does that mean for a bank reconciliation? Actual report that we're trying to make for the bake reconciliation? Well, if I go to the bank reconciliation, I could see it here once I update that report, then let's go ahead and update it's gonna disappear, so that's gonna be be gone. So then it goes away. So that's one less kind of difference between us and the books Again. The major difference is not included to be gaining balance, which will talk about, but that's how the bank reconciliation will be created. It might make more sense on the second month of operations when we have to beginning balance already in in place. So that's gonna be it for now. Let's get out of here. 6. 380 Add Inventory Purchase: in this presentation, we're gonna record the purchase of inventory with the use of our of bank feeds. Here we go with zero. We are in our triple G company Dashboard. We're gonna be opening up our financial statements. Let's go on down to the accounting drop down with help it up the balance sheet reboard. I'm going to duplicate the report by going to the tab of top right clicking on the tab up top, duplicating that tab. Doing the same for the income statement. I'm gonna go back to the tab, the left. Then we're gonna be opening up the income statement with it. Selecting the county and drop down going on down to the income statements will open up the income statement. Once that opens up, we're gonna go back to the tab of top. We're gonna duplicated by right, clicking on it and duplicating latte tab. And now let's open up our bank reconciliation Going back to the tap to the left, go into the accounting drop down this time, go into our reports, this report's gonna be under the accounting section. So we're gonna go down to the accounting section and we're gonna be looking at the bank reconciliation summary that I'm gonna go back up top once that opens. Right? Click on the tab up top and duplicate. That's tab. Let's change the dates. Now we're gonna go to the balance sheet tab going to go and bring this date up to March. We want to bring this as of March 31st update that report. So that's what we have so far for the balance sheet income statement looks good. Bank reconciliation. Changing the information bank account being chased as the bank accounts. The date is going to be march. We want to be in March 31st and we'll update that report back to the first tab now. And we're gonna be opening up by going to the accountant, Drop down the bank accounts tab. Then we're gonna be looking at the reconciliation. We have 10 reconcile ing items were gonna go into the reconcile in items. Now we're gonna be considering inventory. Inventory is kind of something that throws a wrench or messes up our our process in some in some cases because it's basically in a cruel type of thing, and we're we've been we're wanting to do a cash basis type of thing. So we're gonna have money that's spent for let's say, inventory. And that's gonna be items such as our EPA phone we so guitars or imagine were buying and selling guitars. So we're gonna buy from a vendor EPA phone and then sell that. Now. If you look at the flow chart, then what would typically happen with regards to inventory by inventory? Typically, we might have a purchase order where we would basically request the inventory. No financial transaction at that point, and then we would receive it. We have a bill and we enter the bill, which would increase the accounts payable and the inventory at that at that point in time. And then we would basically pay the bill, which, finally, that would affect cash. That's when the cash would be decreasing at that point. Then we would take that inventory and sell it with an invoice that would be going into the customer cycle, and then we would receive money at at some point in the future. So when we buy inventory, then what happens is it's kind of like the equipment when we buy it way, don't typically expense it at the point of purchase like other types of purchases, what we do instead is we put it on the books as an asset because we haven't used it to help us consume or generate revenue. And that's a deviation from the cash method. Because it was a cash method, we would simply extensive when we purchased it. That's when we paid for it. We paid cash for it. We would expense it at that point in time. So what can we do about that with with regards to our system? Because we would like to. We're trying to think of a simplified system where I could just wait till everything clears the bank and then use the bank transactions to make the financial statements. So how do I deal with inventory then? Well, a couple ways you could deal with It depends on what type of inventory you have. One. You contract the inventory outside of the zero accounting software, and in that case, then you can. You can use the bank fees toe, put the inventory into the system and go into the asset account of inventory without tracking the actual items of inventory. In that case, for our for our purposes, like the guitars. I wouldn't know which guitars or how many guitars we would have. I just know that I have the dollar amount in inventory of the guitars. Then I could track the actual guitars on a spreadsheet, possibly using some type of method, like a first in first out method or some kind of inventory flow. I can count the inventory that we have at the beginning and the end of the day, or that getting into the week or the beginning end of the month using kind of a periodic inventory system, and then do basically a journal entry to record the decrease of the inventory and the related cost of goods sold on a periodic basis every day, every month, every week or something like that. That's one method we could use, or we could say, Hey, look, if I just buy the inventory, let's say I only by the inventory of the guitars and I sell them very clip quickly. Let's make let's make believe that we have a system where people buy custom guitars from us . They make an order from us. We then order that information from the vendor and then we sell it. We turn around and sell it very quickly. In other words, we don't have a lot of inventory that's on hand, all the all the time. We basically purchase the inventory and then sell it. Well, in that case that the turn around time of the inventory may be fairly small. And you could do you might be able to get away with doing basically the easiest type of thing that there would be to do, which is the cash basis system, and just say, Hey, look, when I purchased the inventory, I'm just going to expense it. At that point in time, I'm just gonna expense the inventory cause I'm gonna turn around and sell it. I'm not holding on to a lot of inventory, and therefore I don't want to track it through inventory and then recorded as an expense. I'm gonna record. It basically has caused a good sold directly at the point of time that we pay for it. And so that would be the easiest method. So that's what we'll do this time. I'll just record the inventory as an expense at the point in time we purchase it and and that that will be that way. We don't have to deal with the inventory. Next month, we'll talk about how we might put it on the books as an inventory and do it in that method so we could see kind of both methods. Here's the cash basis method, the easiest method that you would do. But it's not actually tracking inventory here. We're just expensing it at the point of purchase. And in this something that you would want to consider If you're dealing with inventory, talk to your you know, your accounting professional, your tax professional to help out with that. But this would be like a cash basis type of method. I'm gonna go down here and look for any kind of inventory items. So I'm gonna go down and I'm going to say, All right, these air deposits and I'm looking for the out flows. So I think I missed him all here. I'm going back up top. So e trade? No, we're looking for EPA phone, So this is an inventory item for EPA phone, So I'm going to do the same thing on on the right. I'm going to say, All right, let's do the quick at this time, I'm going to say that this is going to be who I could just copy EPA phone. No, I'm not. I could create a rule also, but I'm not gonna create a rule for these items because we're gonna We're gonna change how we do it in the second component Instead of adding detail, I'll just do this quickly. In the quick kind of ad future, it's gonna be a new contact, the account that we're gonna want to be using. I'm gonna pick cost of goods sold. So I want an expense account cost of goods sold. And then why? And this is gonna be in Vin like I'll say inventory and that's it. That's all we need to basically record, you know, the minimum amount of data that's typically all we basically need. Then I'm just gonna go ahead and add that and then once we add that the same kind of process will happen If I go to the balance sheet then and I go up top and update the balance sheets, we should now have an increase. Teoh actually to the we should have a decrease in the checking account which means it's gonna increase the liability. So it's going to go in the negative direction because we don't have any money in it yet because we haven't recorded the beginning balance, which we will do in a future presentation. So if we go on into the balance sheet, we should see that going down by the 400. Then I'm gonna go back up to the balance sheet. Let's go to the income statement. Then I'm gonna update this. And this is where the difference happened instead of us. Put it on the books as an asset of inventory, We simply extensive because we expect it to be, you know, used in order to help us generate revenue shortly. So it's on the on the income statement as cost of goods sold that way, we kind of skipped the step of going to the balance sheet and then expensing it. We just went directly to the income statement, which is a cash basis, more method and, you know, easier to dio the reconcile ing item. If we see the reconcile ing item here, it's there until we update it. So I'm gonna update this report and it'll disappear because now we reconcile that it's not . It's no longer a difference between our books and the bank books. And then if we go back to the first tab Ah, we know that it will now appear in the accounts transactions over here. So in her accounts transactions. We have the 400 now, and it's reconciled. All right, let's go back up to the first tab and see if we have any more of these inventory items. I don't miss him this time cause I kind of missed him last time here, So I'm gonna go to Hell e trade. This is a deposit. That's a deposit. Gibson, which is spelled wrong, should be Gibson scops in. All right, But that's what How we're going to say it here. So we're gonna say that's another guitar distributor. So I'm going to say the same thing here. I'm gonna copy this. I'm going to say that's going to their new contact. I'm going to say the this is gonna be cost of goods sold. I'm just gonna start typing it in there and there will have it. And then why? I'm going to say this is inventory. And then again, I'm just gonna say Okay, and again we could set up rules for this. We'll talk more about rules later, but this is how you kind of ab this quickly. Now note this one. It's yes, in right now. It said, Hey, you know, it doesn't It didn't create a rule for us, but it's still kind of helped us depopulated here saying, Hey, look, that looks like we've seen EPA phone before. Do you want to create this one here? Do you want to create this transaction and notice it's not matching the transaction? It's saying, Look, I reconcile. I recognized the EPA phone vendor and and you know, you've written something EPA phone in the past and you added something. It's not a rule, but it's a suggestion. So it's suggesting that we're going to Yeah, that's going to EPA phone looks like the right account. And so notice that even if you don't use the rules, it will give you kind of suggestions like this, as you do the second month of operations, usually which will make it a little bit a little bit easier. I like to do the rules when you have the opportunity to do the rules because the rules will make it a little bit more defined. That that you want these transactions toe happen on and it'll create based on your specifications rather than it just kind of matching it up. But if you don't use the rules at all notice, it's still kind of giving you a lot of help here. And you say, Yeah, create that. So it's gonna make it, you know, as we dio. So then we have a draw and then we got the bank charges. So that's it. So we added those items so that if I go to the bank statement Tam, you'll note that those items related to our vendors have now been added. And there there were already added, Now they're reconciled. That's EPA phone, Dobson and EPA phone here and their records out the accounts transactions. Now we added the transactions here and reconciled them at the same time. So that's gonna be EPA phone, EPA phone and ah edisonint not Edison and gab sitting here and godson. Okay, so that if I go to the balance sheet, we update the balance sheet, let's see what happens. We're making our financial statement as we go. We didn't put anything into inventory, but we do have the decrease to the checking account here. So checking account is going down on the balance sheet side because we purchased this inventory items, which we just basically expensed at the point of purchase. In essence, Dean on a cash basis method. So there's gonna be those those decreases. So I'm gonna bring that back, and then I'm gonna go to the income statement. And if I refresh the income statement, we're gonna have cost of goods sold now, uh, will be increasing, given the fact that we paid for these items. So update this report. I tried to update it, but I missed the button, apparently. And here it is. Here's the cross to get sold. So now we're expensive. That notice we don't have any revenue yet. We're basically recording the expense at the point in time. We paid for the for the inventory before we recorded the revenue. Now, all of the deposits that we have on our bank feeds would typically be revenue, and we'll take those deposits and that's what it will. We will record the revenue side. So there is that if I go back, Teoh. The income statement were there. And then if we go to the reconciliation, these items are now in the items that are should be the difference between the book balance . Noticed the book balances that negative 20,000, 24,020 which is on the balance sheet, right. That's what it is on the balance sheet, actually is not because I have to update it. When I updated, it will be the 39 6 18 And then we have these items related Teoh GOPs in EPA phone bills will disappear, which should bring us bring us closer to the reconcile item on the bank statement, which would be this 90,000 here 190,007. 28. So let's go ahead and update this. I'm gonna update this report and you'll see then that our book balance is now at the 39 6 18 because we added those items and reconcile ing items that were outstanding or now are now gone. So that's what's happening to this this report and that's it for now. Let's get out of here 7. 385 Add Amount Paid for Investment: in this presentation, we will add an amount paid for investments with our bank feeds. In other words, we have money going out with the bank feeds. That's for an investment in something like stocks and bonds. We're gonna add that to our financial statements. Here we go with zero. Here we are in our triple G company Dashboard. We're gonna be opening up our financial statements by going to the accounting drop down, going on for that balance sheet. Once that opens up, we'll go back up top over it. We're gonna be right clicking on it and duplicating that tab. Let's do the same thing for the income statement back to the tab left. This is good practice, by the way, to do this every time here because this is what you the screens, I would recommend having open all the time of the financial statements and seeing what the effect on the financial statements are of anything you're doing. Then we're gonna go back down and go to the income statement. We're gonna go back up top, and once the income statement opens up, we'll right click on that will duplicate that tab. Well, then take a look at the bank reconciliation report to consider the effect on it. So we're gonna go to the accounting drop down. Let's go on down to the reports, Teoh, Consider the bank reconciliation report. Then we're gonna go down to the accounting information and we want to go to the bank Reconciliation summary report. Once that opens up, we're gonna once again duplicate the tab. Going to the tab up top, right click and on its to duplicated. Now, let's go changed dates. We're gonna go back to the balance sheet all the way to the tap. To the right. We're gonna be updating the balance sheet up to March. So we're gonna bring that on out March and the 31st of it. Then we will update that report. Then we're gonna go to the income statement. It's already set up. We're gonna go to the reconciliation report and we'll take this one for the checking account. That's the one we want. We want the checking account. As of March, we're gonna go toe march and the checking account the 31st and update that report as well. Okay, so then we're gonna go with to our banking and first tab where we're gonna go to our banking information by going to the accounting, drop down and go into the bank accounts. You can get there from the dashboard as well. This is the way I typically go myself. Then I'm going to go into the reconcile. We have these seven items that way still get to play with and reconcile here, which is gonna be great. And then we're gonna I'm gonna hold down control and scroll up a just bit. Here's holding down control and scrolling up. Let's bring out up to that 1 to 5. That's where I like to be in the zoom feature and then we're gonna go down and we're looking for this one. This one, this one is E trade. Now, this is more of an unusual transactions. Note that most of transactions you'll see you're gonna be like expenses like the 1st 1 we did with Edison and those ones you could you could set that bankroll for rule for Or even if you don't like we say this, the system will basically kind of match those up and help you out with them. Often times may not be totally right all the time, but you could match them up. You could set rules for them. Um, or unusual transactions such as this one are ones. You're gonna have to go in there and kind of think about this one. We're going to say All right, there is a money went out and it went out of the checking account and into some other investment, like like stocks and bonds, types of investments. Now, you don't want to be doing this type of transaction all the time in a company that's not in the in the field of or the business set up for investment type purposes. You would rather take the money out and then invested on your personal side of things. However, if you have a short term investment that you have within the within the company you want, it's still in the company. But it's a short term investment. You might have this kind of set up, and that means it's gonna be coming out of the checking account and going into just another investment type of account. So that's what's happening here. So when we set this up, unlike most of the decreases, it's not gonna be going into an expense but another asset account. And that's how we'll set it up here so we can set this up as we go. Once again, we go back over here and say, This is going to go Who and I could I could copy the vendor, which isn't really a vendor. This time it's it's Ah, contact Contact is inappropriate name here. It's not a vendor or customer, because it's our investment company that we're gonna be putting like stocks and bonds and whatnot. And then I'm gonna create another account, which is gonna be investments. Let's see if they have it. It's not an expense. That's the key. I don't need to expenses. I need to put it in the ass. It's somewhere. Do I have anything like investments here? Doesn't look like it. So I'm going to say, All right, let's put it into like an account called I'll put it above the pre payment. So let's call it 12. The account number 12 90. Let's see if 12 nineties open. So I'm gonna go back up top. No, we cannot add an account on this screen. So what I'm gonna do is go out of here and I'm going to say I want to add details. We're gonna go ahead and add details, and now we're going to add detail screen, so we'll have more detail here. We got the description, We got the quantity, and now the account field is gonna be over here. I want to go up top to the account field. Ward says, add the account. And now I forgot the number that I wanted to add. See, that's the thing. Was 12 90 12 90. So that's gonna be up. That's gonna be here. So to 9 to 12 90 12 90 12 90 12 90 12 90 Right there And then the key is that it's gonna be an account type, which is a current asset account, not an expense, but a current asset account. And we're just gonna call this invest men's. Now you might want to have, like, sub categories of investments. You might want to put, like, investment each raid or break out the investments in some way. We could talk about Maura about format in the reports in that at a later time, but I'm just gonna put the investments into the account of investments grouping them all in there at this time. So then I'm going to say save. It's gonna be going into the investments, So that looks good. No item, because that's what the inventory item description, everything. What's good here? So Okay, I'm gonna go back down. Let's say save the transaction. Transaction saved. Then we have created the transaction. Now, of course, we can match the transaction, So I'm going to say okay in order to match that transaction, Let's see what happens now. If I go on over to the balance sheet and our update the balance sheets, then we're going to see that we have an investment shows up now. So it's on the books as an investment because it's an asset type of account. Then if we go on down into the checking account, the other side is gonna be in the checking account. It currently is in the liability section because once again, it is overdrawn. Until we actually entered the beginning balance, which will talk about at a later time. So then I'm going to scroll on down here, and we should have money going out for the investments, which was what was the invent e trade. That's 12,000 up top. So there it is. Then let's go back to the balance sheets and then I'm gonna go to the income statement. Let's update the income statement should be no change to the income statement, because way only did balance sheet accounts and went out of the checking account and into the other asset account. Then if I go to the bank reconciliation, you could see down here in the bank reconciliation, we have the amount related to E trade there that's gonna disappear. And our balance in the balance sheet is going to change the balance in the balance sheet. It's gonna change to what we put in the balance sheet, which is the 51 6 18 and then this amounts gonna disappear. So let's go update that and check that out. It's gonna be neat. So we'll update that. And there's the 51 6 18 and had amount now change. So this is our books, these air, the unreconciled items, and that's the bank balance, which is wrong right now. Until we get this thing figured out, then we're gonna go to the first tab, scroll back up top and we could see that in the bank statement. Information. This is what we have input into the bank statement that well 1000 down here now has been included in the reconciled items. Good. Then in the account transactions, we have now added a new account this account now being added on the book side of things. And it, of course, is reconciled as well. So that's gonna be this account that we included, which is now reconciled. So that's it for now. Let's get out of here. 8. 390 Add Owner Withdraws: in this presentation, we will add owner withdraws with the use of bank feeds. In other words, will have withdrawals that were taken out of the bank that will be seen with the bank feeds . And then we'll be adding those transactions to our financial statements to our accountant within zero. Here we go with zero. Here we are in out where? Triple G dashboard within zero. We're gonna be opening up our reports once again by going to the account and drop down opening up that balance sheet as the balance sheet opens up, We're gonna be right clicking on the tab of top, duplicating that tab, going back to the tab to the left, opening up the income statement in a similar fashion. Going to the accounting dropped down, opening up that income statement in the drop down, then to go in back up top, right. Clicking on that tab and duplicating that tab will do the same for the bank reconciliation . Back to the first tab, accounting dropped down. Going on down to the reports then will be located in that bank reconciliation reports, which is going to be in the accounting section down below. So we'll go on down to that accounting section looking for the bank reconciliation. That summary a report. Once that pulls up, we're gonna duplicate once again. Tab up top right clicking on it. Duplicate changing the dates now going back to the balance sheet tab on the right. We're gonna bring this on up to the march. That will bring it on up. Teoh, March 31st and update. That's Tab. This is what we have in the balance sheet of this farm income statement. That looks good. Thank reconciliation Tab up. Top were going to say that the we're gonna be using the checking account bring that data to March March 31st as well and update that tab. So there we have that item. Then we're gonna go back over to the first tab, and we're gonna go to our banking information, selecting the accounting drop down going into the bake accounts within the bank accounts. We want to be looking at thes reconcile ing items. We have six of them left. So that's the only six we get to play with until we ADM Or next time, we will have the second month, so don't worry about it. We got a lot. A lot of stuff we can we can look into here. I'm gonna bring this on upholding down control, scrolling up to get to that 1 to 5 zoom feature. I like to be in the 1 to 5, and then we're gonna be strolling down. We're looking for this item down below, which is gonna be a draw. Now again, remember, most of the stuff that comes out of a checking account will probably probably the things that will be repetitive. As with the Edison Bill we had before and we'll see more of those in the second month of operation. It's those unusual items that go through the bank, feed that we want to kind of point out as well. One of them might be. What if you just took money out of the checking account? If you just took money out of a checking account like a draw or an ATM withdraw, then you're not gonna see anything on on on the information. Except for basically a draw. It might say draw on it. It might just say money was taken out. The problem with that, of course, when you're trying to do your bookkeeping that you don't want to do that if it was a legitimate business expense, typically because you want the audit trail because you want to use it for taxes. And you'd like the audit trail to be all kind of in your system as much as possible. Otherwise, you gotta be copying receipts in this kind of thing. So typically, you only want to draw money out of the checking account when you're using it for personal use. And then any time that happens, anytime you draw money out, you could put it to it to a not an expense account, but rather a draws account. So that's how you typically want it. However, if you drew money out and you're putting it in the business, then you're gonna have to put it in some type of expense account. So those are the two things that could happen with a drawl. If your bookkeeper you're doing bookkeeper bookkeeping for somebody else, you would like to recommend that. Hey, look, every time it would be the recommendation. Every time you take money out but you draw out, it should be not for personal use because you want the audit trail. I mean, not for business use because you want the audit trail if it's a business use and should only do that for personal items on. But however, if you ask the person the owner and they say no, I took that out and I used it for the business. Well, then you got to go in and say, Okay, well, what kind of account should be hitting? And so this time we're going to say that we're going to hit. Look, that money was taken out. The owner says it was used for business. Therefore, we're not gonna put it in as an equity account, which it would be as a draw, which we will do next month. To show the difference of this time, we're gonna put it into an expense account. We don't know which expense account to hit, so we're just gonna use miscellaneous expense here. So what we're gonna do is we're gonna say who and we don't really know who. So we could create like a miscellaneous vendor. Miscellaneous, Right? Because we don't have any contact information because it was money taken out. What? It might have been the you know, that's that's all we know. So I'm gonna just create a miscellaneous contact. Then I'm going to see if we have a miscellaneous expense here. So we're gonna be in the expenses and I'm gonna say, Did they give me a miscellaneous? I think they do. There's one. There's miscellaneous. I'm gonna pick that one. And then why? And I'm gonna say this was a you know, a draw for business, you know, for the owner, that's gonna be our note, and that's it. So I'm gonna go ahead and add this and like, once again, next month will add this and will create it as a as a draw or equity account this time as an expense account to show the contrast. So I'm gonna add that, and there it is, going back to the balance sheet. Let's see what happens. Gonna update the balance sheet, and then this is gonna be decreasing the checking account, which currently a liability because we don't have that beginning balance into in there. We will be dealing with that later. And that's a common problem when you first start the bank feed feeds, but we'll deal with that at the end. After we enter all these transactions. Once we do the reconciliation process, I'm gonna hold down control and zoom in a little bit so that we could see that 1 to 5. That's where I like to be like that. 1 to 5. And then we see the spin. There it is. There's the $80 notice again. All of these air money going out or all the ones that are money going out, are basically a spend money type of form. That's all we've done. Is the money going out? We'll talk about deposits later. And then if I go back up top, the other side's gonna be on the income statement now. Note. Word is not it is not on the equity. Second, if it was a draw for personal use, then it would be down here in the equity section as as a drop wouldn't be affecting the income statement. If it's on the income statement, then it's gonna be over here. I'm gonna update the income statement. It's gonna be in some type of expense down below, which in our case, we put it into the miscellaneous. That means it's gonna be decreasing the net income. We don't have any income yet, so it's in a loss because we haven't entered the deposits. But it would be decreasing that income and that for taxes that would be lowering taxes right, lower in tax will income generally. That's why you know, if you're if you're doing this mainly for tax purposes, you gotta be careful with those items that are draws versus business. You know, business versus professionals, right? Business versus personal. So if it was a personal draw, it should be on the balance sheet and therefore not decreasing this amount. If it if it was for business, you want to put it here. Which would be like a deduction for taxes, often times. But if you get questioned about it by the iris, you don't have an audit trail because it was taken out by just ah, cash coming out. You need the receipts to support this line item, whereas if you have an electronic transfer or a check or something like that, you would have an audit trail. So you want the audit trail for taxes for the things that you spend money on, because those air deductions you would like to have an auto trail and therefore not be spending cash for those legitimate deductions. So just just a reminder is The Pointer. Then if we go back to the reconciliation, what's gonna happen on the reconciliation when we update this amount right here, there's 51 6 18 will then change to what's on the balance sheet. It's gonna change Teoh what's on the balance sheet, which is the 51 6 98 So that's gonna change to 60 51 6 98 And this amount of the $80 is going to disappear. So let's go ahead and update that and then scroll down. So there's the There's the 51 6 19 and now that amount down below again has disappeared at this point. 9. 395 Add Bank Charge: in this presentation, we're gonna add a transaction related to bank charges using the bank feeds. In other words, we're gonna have the bank fee that was imported into the system for bank charges, charges from the bank, which we will now be adding to our system to affect the financial statements. Here we go with zero. Here we are on our triple G dashboard. We're gonna be opening up our reports by going to the accounting drop down, opening up that balance sheet report. We're then going to go up top and duplicate that report. So I'm gonna be a right clicking on it and duplicating it. Gonna go back to the prior tab, going to do the same thing for the income statement, go into the accounting drop down, then going on down to the income statement and opening it up. Then we'll duplicate that tab. We're gonna go back up top, right click on that tab, duplicated we're gonna do one more for the bank reconciliation. So back to the tab, the left go into the account and drop down. We're gonna go on down to the reports so that we could see the effect on the bank reconciliation gonna go down to the accounting section. We want the bank reconciliation summary. That's the one we want. That's the one will get. We're gonna go back up top, right Click on that one and duplicate of that tab as well. So then we're gonna go back to the balance sheet, will update the dates on the balance sheet, and the dates is getting be a pinto march to want to select that date field and go on up to March 31st. March 31st. The income statement should be OK, So that's good as is the bank reconciliation is gonna be from the checking account or the chase check in date up to the 31st as well. That's update that report back to the first tab, then where where we will be dealing with our reconciliation information or the bank feed information. Let's say we're gonna select the accounting drop down from here, and then we're gonna go on down to the bank accounts, which will be the first time we're not going down to for its right right there. And then we're gonna be looking at the five items left to reconcile. We're going into those five items, lest the next thing we're gonna do is hold down control shift, hold down, control and scroll up to get up. That 1 to 5 is gonna zoom in a bit so we could see this a bit better then. I'm looking for this 15 down here. This 15. It's coming from the bake. So some there's gonna be some charges, possibly from the bake, right? They're going to give us some kind of charges, and obviously we're going to add that to our books in some way as well. Now, what's going to be the information that give on the charges? It depends on the institution. They may call it bank feeds. They may have some a description of the vendor of themselves or no description, depending on what you're given, then you can set up by rule forward, and it might basically memorize these transactions in the future. So we're simply could have set this one up. This is a fee that came from the bank from our bank from chase, so we could put from who we could say chase new contact, which is basically the bank, right with a bank and then We're going to say this is a bank service charge, so we're gonna look at that would be just in expense. So here's one bank service charge that looks good. I'll pick that one out and then why? And you could put a description, service, charge, bank service charge, like so no tax on it, and that looks good. So then I'm just gonna simply add this. What's it going to do? Is gonna add this to our side of of the information, and then we're going to reconcile its to the bank. Pretty straightforward. So we're going to say, OK, let's then go up top and see what happens. We're gonna go to the balance sheet, update the balance sheet, and then I'm going to say that in our cash account, the cash accounts gonna be going down in the hole further because we haven't recorded the beginning balance. Therefore, it's a liability right now, but it will be okay. We do have cash. We just haven't entered the beginning balance yet, and we'll do that later. So we're gonna go back down there is the 15 right there. Once again, it's a spend money type forms you want to be able to recognize these kind of forms when you make them, which is a little bit more difficult to do when you use the bank reconciliation feature or the bank feet feature because you don't really actually generate those forms. You put it in that other kind of kind of quick form type set up, which so you kind of want to get an idea, you know, spend money form. It's gonna be this type of form. That's the document that will typically be used in the form use for the money going out. Then on the income statement side, we're gonna update the income statement, and we should have an expense account down here. And that's going to be for the bank service charge of the $15. So that's gonna be increasing the expense, decreasing the net income. We don't have any income right now, so we're basically how are just increasing the loss at this point in time. But we will have income when we run the deposits. Then if we go to the bank reconciliation side of things, what's gonna happen once we hit refresh, the 51 6 98 is gonna match what's on the balance sheet, which is is Ah, 51 7 13 And this bank service charge is gonna disappear as a reconcile ing item. So let's go ahead and update that. And there we go. So this ties that this is at the 51 7 13 that 15 now disappears. This is what's on our books as of this date. These are the items that have not reconciled yet. This should be at the end of day, what will be on the bank statement, which is going to be this number on our bank statement. Obviously we're not, vary it. So we haven't finished it. Big factor being that we need that beginning balance in place here. Let's go on back to the first tab then and we're gonna go back up top and see what happens that we have the bank statement within the bank statement information. This is the information from the bank. We had that 15 dollars that was in there before now the only change being that it should be reconciled at this point in time. There it is. I found it. I found it. It says reconciled. And then we added the transaction to our side of things, which is the certain third tab, the accounts transactions. We added. Here there's the $15 of course, reconciled on this side as well. Next time we get to finally get to our deposits well, to start to think about the other side of things, the money coming in and how we would deal with that, that's it for now. Let's get out of here. 10. 400 Sales Tax Calculation: in this presentation, we will calculate sales tax in our practice problem. Here we go now was zero. Now, here we are in our triple G dashboard. We're gonna start off opening up our financial statements. I'm gonna open up the accounting tab up top. Go on down to that balance sheet. Once that balance sheet that opens will go up to the tab up top for right, click on it and duplicate the balance sheet, going back to the tap to the left. We're gonna do the same thing for the income statement. Selecting the accounting drop down, going down to the income statement. What's the income statement then opens up. We're gonna do the same thing to it. Going up to the tab up top, right, clicking on that tab, duplicating that tab back to the balance sheet, going to go to the first tab to the balance sheet and changed the date. The dates gonna be on this drop down right here. We're gonna be selecting and going up to march. Gonna bring this on up to march, gonna update this tab. Then I want to take a look at the income statement back on over to the income statement. Not just Ah, this looks good. So we're gonna go down now, Newt, that we entered all of the income items here. If we have sales tax on that, you might think, Well, how would I fit sales tax into this if you don't have a company that has sales tax and then the cash basis system works. No problem. But what if you have sales tax? How could you make that work and still work? Kind of like this cash basis system where you're basically dependent on the bank to think about that. Let's go back to the first half and consider that actual invoice. Let's look at an invoice from what The calculation of sales tax is on it. Normally, if I hit the plus button and I say plus and I was Teoh create an invoice is we're not gonna actually record this where it's gonna be a mock invoice. Say we're selling something subject to sales tax. I'm gonna say this is gonna be one item, 500 $500 subject not $5.500 dollars subject to sales tax. So we're gonna have the tax rate on it at the 9.5%. So that's what that's what the calculation would be. We'd have to charge 5 47 50 So basically what we would want to think of them doing is saying, Hey, look, I'm gonna charge everybody that we have everything. The amount, the amount of the sales, plus the sales tax. I'll just work that into the price, basically that we're going to sell it for and then we'll back out the sales tax. So in other words, every time you make a sale, you're gonna assume it's being sold, including the sales tax, and then back it out. Eso you can do that? Obviously you want to do that consciously and be able to set your price and then include the sales tax. But even if you didn't do it consciously and you just sold whatever and then you've got a bank back out the sales tax, for whatever reason, because the government saying, pay a sales tax or we're gonna do something bad to you or something. So they got a back out the sales tax. So how would that work? If we think about this in Excel, then they're gonna think, Well, that's you know, might be a little bit more complicated. You might think I'm gonna open up, excel and say we're going to format the cells here and let's make it. I like to make it currency brackets and then no dollar sign. I'll keep the decimals, so I'm just gonna format This is gonna make this a little bit larger. And so what? We're what we're saying here is typically on the invoice. We said sales with $500.500 then the tax rate was 0.95 or 9.5%. If I make that a percent, I'm gonna go the home tab number making a percent, and then I'm gonna add a decimal. So it's 9.5%. And then that means that ah, that the tax on it or the tax would be equal to this times. This So that's the tax. I'm gonna underline this. And that means the sales and tax that we actually charge is going to be this Plus this right, that's gonna be the actual amount that we charge. So So now if we like, kind of reverse this calculation, we can take Okay. Well, what if I already have this number and I need to back into the sales number if I don't know what it is because if I know that that I can apply the same kind of method to to the entire amount, So I can I can then go back over, Teoh our system and think about think about the entire amount. If I go to the income statement of sales and say, Well, that whole amount, you know, included sales tax. How can I back out? Basically the tax portion of it? Well, we can think about mirroring the same kind of transaction over here, and I could say OK, but what if I did the same transaction? I'm just gonna copy this and I keep the formula. I'm going to use a little tool within excel that kind of help us out with this. In other words, I've got the same transaction. I'm gonna calculated this way, which is the easy way to know it. And then the unknown here. I know. I know this number down below. I don't really know this number. This is the number I need to get Teoh. But notice I have the same formula down here have the same formula. Then I'm going to use this gold seek just to show you how you might do this in excel that you could obviously use algebraic t figure out the unknown, right? But I just want to show you this little tool within within excel that might make it easier toe to think about as well. So if I go back up top and say, All right, let's let's use this little tool, We're gonna go to the data tab up top. We're gonna go to the ah toothy forecast information notice. I'm not on any cell because some this isn't gonna be a formula in this sale. It's just a tool we're using. I'm gonna set the what if dropped down. I'm going to use this thing called Goal Seek, And this gives us a little thing where we could just say excel. I want you to just do whatever you have to dio to make this number equal to what I know. It should be by changing this number, which is connected to this number with a formula. So we're basically going to say, Hey, excel, would you please set this cell to be some hard coded number. What? I know it should be which I know it is. It's gonna be this 5 47.5 I'd like you to do that by changing this cell, and this cell is connected to that cell with a formula. So right, so we're going to say, Hey, Excel, please change this cell to that hard coded number by just trial and air, putting whatever you need to in that cell so that I'm gonna say OK, and then it figures it out. Right, So that's we can kind of back into it that way. And if you apply that same method than to all your sales, So in other words, if you if you consider all your sales, including sales tax and therefore at this point in time you have sales of the 21 630 you're trying to determine this is, as of the end of let's say, March and I'm trying to give my sales tax calculation that I have to pay me and I have to back out the sales tax component of this which I convinced I have to pay, you know, to the state How would that look? What? We could go back over here and do the same thing. I could say I could say that the same kind of calculation, but But this is this is the unknown and the and what I what? I know that this bottom number should be is gonna be equal. Teoh Ah, what is in the The sales, which should be 21 6 30 So I know that should be 21 6 30 seconds to 1630 is what I know this bottom number should be, so I'll do the same goal seek thing. I'm going to go. All right. Data tab forecast gold. See Gold seek. I'm gonna say Hexcel, would you please set this number to be equivalent to what I know it should be because this is what's on my statement when it wants 630 by changing what's ever is in this cell, make that sell whatever you need to be, right, and then I can say, OK, calculate that. And there we have it. Right, So? So the. And that way you can kind of back into it again. You can use algebra, obviously, to do this, but that's one way you can use gold. Stick to back in and then you could double check going, going this way, right? Like if I had this calculation and then I plug in the bottom line number. That means that I must have had the 21 600. Uh, and I must have had the 19 75342 right, The 19753.42 times. The 19% would be the sales tax. Therefore, off the 21 6 29 If I'm assuming the sales tax was included in it, then 8 1076 57 about its rounded I would have to be the amount that's gonna apply, be applied Teoh the sales tax. And then and then you can pay the sales tax. So when you pay the sales tax, then you could pay the sales tax electronically, or however you want to pay it. And when you pay it, what's gonna happen is you're gonna your cash will go down, which you'll see on the bank feeds, right? Cash will go down, and then the other side, you're gonna actually put to the to the sales line. The sales line is overstated, right? It's overstated by the amount of sales tax which, which, you know, normally would have going through a payable account normally would have gone through a payable account. But here you're on a cash basis. You didn't go through a payable account, so you would just posted here, and you Or you might want to create a Contra income account called sales tax sales tax. Right. And then that would be a negating this sales, because typically you don't record the sales here would go to a payable, and then you then you pay it. But in this system, you could just decrease the sales, backing it out when you pay the sales tax. And then you could figure out the sales tax saying that you imputed it into the sales you calculated, and then you're gonna back it out. So it's one method you may consider if, if again, you want a very simple kind of cash basis method within something like zero, where you're completely on a cash basis and dependent on the bank feeds. But you still have to deal with the sales tax calculation. So that's it for now. Let's get out of here. 11. 405 Deposit Loan: in this presentation, we're gonna record a deposit which was from a loan from the bank feeds. In other words, we can have a bank feed with a deposit, and we're gonna take that deposit added to our system. That deposit from a alone here, we g o with zero and we are in our triple G dashboard. We're gonna be going to our reports. Let's go to our accounting. Drop down. We're gonna be opening up our balance sheet. Once that opens up, we're gonna go over to the tab up top. We'll be right clicking on that tab up top, duplicating it back to the tab to the left, doing the same thing for our income statement. Selecting the accounting dropped down, going down to that income statement or other financial statement, reporter or other main reports. Then we're gonna duplicate that tab by going up to that tab up top right, clicking on it once again and duplicating that one. Let's do this again. Back to the tap that unless we're gonna be opening up our bank reconciliation report by going to the accounting drop down, Opening up the reports this time. Thanks. Reconciliation reports down under the accounting sections. We're gonna go down there because that's where we need to be. Make reconciliation summer and that's the one we want. Once that opens up, I'm going to right click on that tab and duplicate that tab. Let's change the dates, starting with the balance sheet. First, we're going to go from right to left. We're gonna go balance sheet and then on over, and then I'm gonna change the date March. We want to bring this rectum. March 20th 2020 March 31st 2020 then the income statements. Good to go. We're gonna go to the bank reconciliation and change that. That's gonna be in the checking account we're gonna be working with. Of course, the day it's gonna be up, Teoh March 31st March 31st. We will then update that. Now let's go back to the first tab. We're gonna go into our banking information by selecting the account and drop down and go into the bank accounts within the bank accounts. We're gonna have our checking account and we've got these two reconciled transactions with left. That's where we want to be. That's where we're going to go so I'm gonna hold down control and scroll up just a bit. So we're at that. 1 to 5 were considering this item down below these air deposits as well. And remember what you need to distinguish with the deposits is you're gonna We're assuming all deposits are from customers except the ones that we put in there. So if we put a deposit in or some other deposit happens from some other place other than a customer like us or us put us the owner putting money in or a loan, we need to recognize that usually it's pretty, pretty straightforward. I mean, if you see just like a oddball amount that or you know, has a even dollar amount, that's usually a nen vacation. That's something funny. Possibly. So it just depends on your type of organization, what type of sales you have. But you want to be able to distinguish that in some way, and oftentimes that's gonna be well, it's gonna be a even number. Possibly that's going to go in the system. In this case, we're gonna assume that this one is a loan. So we want to just make sure that you're not putting that on the income statement as revenue, or you may be paying taxes on it. And that's not good cause you don't. You don't wanna pay taxes on a loan amount, so we're gonna make sure that that's going to go in here as as alone notice what it's doing right here is it's it's assuming that it's it's a deposit because it's saying, Hey, look, you know, it's a deposit. We don't have anything else to go on other than the fact that it's an amount and it's increasing and it's assuming it's going to this customer deposit and it's and do you want to do you want to create? Do you want to create that? If you were to just say OK, then it would be it would be wrong. It would increase the income statement, and it would not be good, because then you'd be again. You'd be paying taxes basically on a deposit that was from a loan, not income from a customer. So you gotta be a little careful on that when you're recording the deposits in there, so we're going to say no, this is not what we want, and so we're gonna adjust this and I'm going to say this came from the bank. So maybe chase as our as our customer Now. Also note that this you could make a bank rule t try to figure out the deposits and not deposit. So you might say, if it's a deposit that's under a certain dollar amount than maybe it's always revenue. And if it's over a certain dollar amount, then maybe it's something that's going to go somewhere else, or at least something that you want to check on so you might be able to create a rule or something like that could make it a little bit faster. Otherwise, the system is not gonna have a rule, or it's just gonna kind of guess. You got to make sure that you go in there and double check. So that's what we're going to say, and it's not gonna go toe to the merchandise. What it's gonna go to instead is some kind of loan. So it's not going to go to an income statement account, not an expense account. It's not gonna be an asset, some kind of liability accounts. So do we have any kind of loan account down here? so I'm not seeing any loan account. So I'm gonna create a loan account, and I'm actually gonna put it in a long term, so I'm gonna call it. I'm just gonna call it to 700 Now. I can't add the account here, so I got to go then to the add details when I add the details and then I'm gonna create the account down here. It's currently going to merchandise because it's trying to guess where we want to go. No, that's not That's not right. I'm gonna tell it. Want to go back up top now? I forgot the number again. I want to make it to 700 home. Then I'm gonna go back up. Add the new account to 700 to 700 to 700 right there. Then the account type is gonna be a liability. Now, I'm gonna put it into a long term liability that because I kind of break out my loans that way into the long term. You could think about how you want how you want to deal with loans. If you have multiple different types of loans, you may want I would suggest creating a separate loan account for each loan, possibly even having a low number on it so that you contract those loans. And then if you want Teoh, record the short term and long term portion of them periodically into the month or end of the year, then you could make an adjustment for on adjusting entries. So I put them all in t non current liability, and then I make a periodic adjustment if I need to represent it in some other way. So then I'm going to say that this is gonna be a note. Pay Ah, bowl. And I'm just going to say pretend I had a low number. I'm actually gonna attack that loan number on. So then I'm gonna say save. So here's the details coming from Chase. That's what that information wasn't in the detail up above. I didn't know about that. It's just it's just showed up as a deposit. But I know that where it came from, I had to look it up and see where they came from. I'm going to say it came from Chase. Then the the date is gonna be the 13th. We could put a reference for the loan up top. No item we might want a description like alone could say it's alone again here and then it's for the the amount that's gonna pull in. This is the other account it's gonna go to. Obviously, it's gonna increase the checking account. That's what we're dealing with, the checking account, the other side. Then go into a liability account, no tax involved and that's it. Let's go ahead and save that transaction then then, if I go back up, we've recorded the transaction on the books side. Then we're gonna match it. Reconcile in it. So we're gonna say, OK, let's reconcile that. Then let's go up to our balance sheet and see what has happened by updating the old balance sheet. So now we have the checking account is positive. Now that is great. So now the checking account has popped up over here on the asset side, it's still not right because we don't have the beginning balance in there yet or one more deposit. But at least it's not showing up as an overdrawn account as a liability, because that's not fun to look at. So then we're gonna open that one back up and see. We should have a deposit that for the 50,000 and hair. So then we're gonna scroll on down, and there it is. There's the 50,000 increase here. Notice it's received money type form, of course, because it's it's going up, that I'm gonna go back, and then the other side is not going to be on the income statement. That's the point. It didn't go in as revenue, but rather stays on the balance sheet, and it's gonna be a liability that we owe. So here it is, on the liability section Note. Again, I put the liability here with a low number. If you don't want the loan number on there, what I would suggest is you set up all your liabilities here in the long term liabilities so you can you can break them out versus current liabilities is a little bit easier. And then oftentimes, loans have a current and long term portion that you could break out. If you have to show the financial reporting in that format, then do adjusting entries to break that current portion out. You can also format your loans to group them together by using the edit layout option. Just show you that down here real quick If you go to the edit layout. And let's just say that I want to have an external report now, I'm not going to save this. I'll just show you how to do it. But I won't save it so I could go back down here and I said, Well, what if I want to make a group? Let's imagine I had a couple loans here or I just had the one and I want a room. Remove the account number so I can give it to somebody else. Well, then I can add a group. I can select it at a group. I'm just gonna call it notes payable, and then I'm gonna collapse the group so that it Now it's in that group and it has a low number. So that will, if I say done, it'll show up on the balance sheet and it'll show up as a collapsed group. So this will be my external report that I could give to someone else. I'm not saving this as my main report, but I could basically save it as a custom report down here I could say save. And then I could call this external balance sheet and then I can open that one up when I want to give it to somebody else and it'll show no, no low numbers. I can group them all into one category, and then when I open up the normal balance sheet, it'll show those account numbers, which I typically need for my internal accounting purposes. The income statement. No effect on the income statement. That's the point. You don't want the income going up for deposits that aren't or not from customers, because what will happen is you'll probably end up paying taxes on them for your income tax . And that's not what you want to be doing. And then if we go to the reconciliation once I update this this beginning number, the 30,083 will change to what's on the balance sheet, which is currently 19 9 17 and this deposit will go away. So I'm gonna go ahead and update that, and that should make that adjustment. So now we're at the 19 9 17 and the deposit went away. We only have one more reconcile ing item. That's not gonna fix our problem here because again, we're not down. We're not gonna match this number yet because we don't have the beginning balance in there . But that's the last reconciling that item. And then we'll do the beginning balance. We'll talk about that going back up top. We go to the first tab. Then if we go to the bank statements now within the bank statements, we now see that that 50,000 which was input when we updated it, has now been reconciled. So here it is reconciled and the account transactions. We created a new account Transactions. This is our book side of things where we have the 15,000 that has been included now. And of course, it's reconciled as as Well, that's it for now. Let's get out of here. 12. 405 Deposit Owner: in his presentation, we're gonna record a deposit from the owner using bank feeds. In other words, we're gonna have to bank feeds, record the bank, feeds or import the bank feeds will have a deposit which we're going to determine is from the owner. We're gonna record or include that transaction than in our financial statements. Here we go now, with zero now, and we are in our triple G company dashboard. We're gonna be opening up our financial statements, going to the accounting drop down. We're gonna be opened up the old balance sheet reform. And once that opens up to go to the tab up top, right click on that tab up top, duplicate it, then we're gonna go back to the prior tab. We don't really need the income statement this time because we're not gonna be affecting the income statements. Let's not do that one. Let's go to the accounting drop down and just go down to the reports and open up the bank reconciliation report, which is under the accounting section. We want the bank reconciliation summary. Once that opens up, we're gonna go back up top one more time. And, well, maybe not one more time, but again. And we're going to duplicate that tab back to the balance sheet on the right hand side. Let's adjust the dates. Now we're gonna go up to the date and bring that to march. That's what we're working with March 31st and update that report. Then we're gonna go to the bank reconciliation. We're gonna change this to our checking account, and we're gonna put the date here once again to the end of March. That being March 31st update that report, then we'll go back. Teoh the left. We're gonna go to the accounting drop down, and we're gonna go to the bank accounts within the bank accounts. We're looking at those bank feeds of which we have one remaining. So we're gonna go into the bank reconciliation where we've got that last one to deal with. I'm gonna hold down Control, scroll up just a bit. So we're at the 125 on the percentage, and this last one is another deposit. And this is the other scenario that we might have. There's a deposit other than a customer deposit. Maybe it came from a loan which we did last time. Or maybe it came from us. The owner. So we're gonna assume this came from the owner. The same principle applies. If you're going to assume that all deposits air from the customer, then you got to make sure that you pick up those exceptions which might be a loan deposit resulting from a loan or deposit resulting from the owner putting money in. Now, hopefully, as the business proceeds, the owner will not be putting money into the company. The company will be generating money from customers, and the owner will be removing that money in the form of draws for their own personal use. However, in cases where we're starting the new business or cases where we're trying to extend, then we may well have instances where we're putting money into the system. Same thing applies. We don't want to be paying taxes basically on the revenue from the money that we're putting into the system. Therefore, make sure you don't put it into what they're suggesting here based on our prior transaction , or at least what they would normally suggest, because normally we would put all the deposits into the income account and they would be suggesting Here have. This is a deposit. That's all I know. That's a lab to go on, and that would be going to a deposit. Now, here's obviously going Teoh the loan account because that's the last one we entered. But most of the time, most of deposits were just gonna assume all deposits are going in the income. And if we just kind of went down there and check them all off, they were going to income. So we got to say, OK, that's a large deposit. It's a round number. Looks like something funny's going on possibly. And then we look into it say, Oh, yeah, that's the money we put in to to the system. We don't want to be putting it to income. So we're gonna say this isn't coming from Chase. I could say owner, owner as the contact, and then the other side is gonna be going Teoh some type of capital or equity accounts. I'm gonna go down and see if we have appropriate and appropriate equity accounts. So we're in the equity section. Here's the equity type of account. So this is gonna be balance sheet accounts, not income statement accounts, not going to affect net income then. So we have the capital account and we've got to have the owners capital investment so that one looks appropriate. So that's us putting money in the owner's capital investment. So I'll go with that one. That's the one we're going with. We could put a description of, you know, we're putting money in for whatever reason, if we so choose, I'm not going to hear, and that's gonna be it. So I'm gonna add this and then we're going to match it. So I'm gonna go ahead and say, Let's say okay and that will match it out here. So now we've added it and matched it and it says, Great job, because that was the last one that we had to record. Let's in order to reconcile. But we're not done yet because we still don't haven't included the beginning balance. We're not quite done yet, so they're giving us a good job, which is nice with a little a little early, little premature. So now we're gonna go over to the balance sheet, see what happens. We're going to be updating the balance sheet here then, of course, in the checking account in the checking account. We now have a good cash in the checking account and makes it feel good after having it showing as overdrawn for such a long period of time. Which is a bit disturbing. It's not. It's not. It's not correct yet, but at least it's a positive number in cash. So then we got the 65,000 down here in the owner. It's a money received item notice. It's the same item as the customer deposits, but it's a different account. These ones on the other side went to income up here. It's a deposit or money received from different sources. Either the bank or, in our case, this time with the owner deposit. The other side, then is going to be going on down Toothy Equity section. It goes directly into the equity section down here Now. The earnings the current year earnings are basically like the net income that are included in here, that that will roll over to retained earnings and then we're tracking our investment, the money that we put into the company separately in a separate equity account. In this case, that's where the 65,000 is no effect on the income statement. If we look at the bank reconciliation, then we have the bank reconciliation. Once I select update, this 19 9 17 will change to what is on the balance sheet, which is currently the 84 9 17 and this last amount here will disappear. Let's go ahead and update that updating that item, we're gonna say, All right, there's the 84 9 17 That's correct. New reconcile ing items. So now you'd say, Well, if there's no reckon selling items this is the book balance. No record selling items. This should match the statement balance, which it does Not here. Why? Because we haven't included the beginning balance. We just included the activity. So this is often what you have to kind of think about. And when the first start the system in the news in a new system or a new company which you already have a big account set up for, So we're gonna think, Well, how can I add the beginning balance? So that's that's gonna be needed for us to get on track here. Why aren't there any outstanding balances? Is that normal with a bank reconciliation? No, it's not normal wise, and it's normal because usually we don't get all of our data directly from the bank. Usually we enter the data and then we use the bank to double check. And therefore we will have things like outstanding checks that we wrote that haven't cleared the bank and possibly outstanding deposits that we put into the bank but haven't met yet reconciled. We don't have that here because we're completely dependent on the bank. We waited until they cleared the bank. So really, the reconciliation all the reconciliation is doing under a complete cash basis system on which were completely dependent on the bank, waiting for things to clear the bank. All the reconciliation is doing. It's really important to do this, but it'll be a bit different. We're double checking that we entered all the transactions correctly and that we haven't double entered transactions. That's basically what we're doing. And by doing this right now, this isn't enough. Noticed for us to verify that because I need to double check this to a periodic statement. Balance eso. I still need to kind of reconcile it to the statement balance just to see that there's not problems that we current like the one we currently have now, right? This still isn't reconciled. The reconciliation has to match out to the to the statement balance here. And it doesn't until we add some. So that's not quite done yet. If we go back to the first tab, then if we go to the bank statement information and I'm gonna go to the big statement information and scroll on down, we should have everything that we have imported now has a green reconciled item. They've old been reconciled at this point in time, which is excellent. And the one we just did with the 65,000. That's the one we were looking for. And then I believe that, yeah, that's the one. And then the accounting transactions, of course, we added this accounting transaction of the 65,000 and reconcile it it at this point in time. That's it for now. Let's get out of here. 13. 406 Bank Beginning Balance: in this presentation, we're gonna enter the beginning balance of four our checking account so we can complete our bank reconciliation. In other words, we've entered the data into our accounting system with the use of bank feeds. However, we had a beginning balance on place before we entered the bank feeds. And now we need to enter that information in. We can prove that everything looks OK. Looks correct by completing the bank reconciliation. Here we go with zero. Here we are in our triple G company Dashboard. We're gonna be starting off by opening up our reports. Let's go to the county and drop down. We're gonna go on down to the balance sheet, opening up our favor, report that being the balance sheet report. Once that opens up, we're gonna go to the tab up top. We'll be right clicking on that tab and then duplicating it. Then we're gonna go back to the tab. The left. We shouldn't need the income statement this time, so let's go to our big reconciliation report. We're gonna go to the account and drop down. We're gonna go to the reports to do so. Then we're gonna scroll on down to the accounting section where we have the bank reconciliation summary bank reconciliation summary. That's the one that we want. I'm gonna right click on that and duplicate the tab on the top. So now we've got our balance sheet, our bank reconciliation. Let's change the dates balance. She Let's bring the date on up, Teoh March. That's where we are working. I'm gonna bring it on up to Mark bringing on up to march and there we dio and then we're gonna go to the bank Reconciliation second tab. We're gonna be working, of course, with our checking account, and this is going to be for the date of March 2 will bring that one on open as well to the date of march. So now next thing we need to consider is we have our bank reconciliation here. We entered our bank feeds. We've got our bank reconciliation. However, the book balances, of course, right. The 84 9 17 matches. What's on the balance sheet? The 84 9 17 That's always the case because that's where is pulling that number from. However, the bank balance is wrong, because if I tie that into the bank statement it doesn't tie in. It should be this. The Indian balance should be that 90,007 28. What's the difference between the two? Let's bring out the old trusty calculator and do some calculation with it. That's what it's for. That's what a calculator does is calculate. So I'm gonna say this minus the minus the 84 917 That's gonna be the 5058 11 5058 11. Which, of course, is the beginning belt were off by the beginning balance. Why? Because we entered all the bank feeds as of this month, back a month in time. However, when we started, we already had some money in the account, a pretty good amount of money in this case. But in any case, normally that would be the case. If you're starting in accounting system, which you had in another system and then transferred it into this system, then typically you're gonna do the bank feeds to have a cut off date, and then and then you're gonna have to bring in the balances from the prior time period, or even if you're starting a new company from scratch. Often, people will actually create the bank account before they put this information into the system. And therefore again, you'll have this beginning balance, so that's a common kind of thing. So how are we gonna How are we gonna get this beginning balance in place? We've got to get this into the system. All right, let's do that. So let's go back on over. Teoh the R zero and let's go to the balance sheet and what we need to do is an increase. This checking account is checking account needs to go up, and then the other side is going to be going to the equity side of things now. Normally, when you set up the beginning balances, I would suggest trying to trying to, you know, switch your accounting software basically at the beginning of the year and then enter all your beginning. Balance is in the prior year, just to make sure that you don't double in, put anything into the income statement. In other words, if you enter all your beginning balance is, as of you know, in this case, December of 2019 then you'll you'll have less likelihood of entering anything that's gonna be affecting the temporary accounts on the income statement. Everything will wash out, in other words, to the balance sheet because all the temporary accounts will close out to the equity section. So I just wanted that's the best practice I would typically recommend doing now. Here were out in March. We could enter the began the beginning balance as of the end of last year. But we don't really need to in this case, because what we're gonna do is we're gonna increase the checking account, and the other side will just put to the equity account. It's gonna be some place in the equity account down here, possibly into just retained earnings, because we're assuming this is earnings from the past, the point in time before we have this accounting system in place. If it was you put in the money and as the owner into the checking account and you want to recognize that, then you could put it into this account here that Capital Owner investment or if it's from Friar Period accounting system that's rolling forward. You could put it into retained earnings. The point being, it's got to be somewhere down here in the equity type of accounts. So let's do that. First, I'm gonna make this this account correct. So we're gonna go to the first tab, and, uh and we're going to say this is gonna be money coming in. So I'm going to say the little plus button and I'm going to say this is receive money. Now, we're not getting the money right now. We got it at some time in the past before we started entering this information into the system. But we're going to use the received money form so that we can increase the checking account , the other side not going again to the income statement. But Teoh a, um, equity type of account. So we're gonna say, who did it come from? We could say owner like if it was the owner, but we may not know who it's from because it might be from various sources fryer to when we enter the data into this accounting system before the cut off date. So to show that here, I'm going to say this is going to be in, I'm gonna put this in place as of the end of February because we're starting kind of in March now, Look, I would usually start the beginning balances hopefully at the beginning of the year and then enter all my prior data and in the fryer time period in the prior year, Like in December, when we're starting in November of 2000 or in January of 2020. However, I'll put it in in February for this case and again, it shouldn't matter because we're gonna go directly to the equity section. So it would just be kind of like a double check if you were to do so. OK, so we're going to say the check, and we're going to say this is gonna be the description. Beginning balance, I'll say. And we're going to say that the amount is going to be for the amounts here. I'm pulling this from our bank statement. 1058 11 54. So this is 1058 11.54 Is that right? One over. Have 8 11 54 Yes, that is correct. The other side's gonna go to an equity type of account, so I'm gonna scroll down here. I'm looking for equity. So here's equity. Now, if it's you that put the money in like if you're starting a new business and you put the money into the checking account from, like your personal savings accounts, personal accounts, then you might just call it owners investments. Or if it's rolling over from a prior accounting system, it's probably going to go into the account that everything rules over into which would be retained. Earnings. I'll put it into the investment accounts is so we can see how it would break out here. So I'm gonna put it into the investment equity type of account. So there it is. It's going, What's it's gonna do when we input it? It's going to It's receiving money. Therefore, it's gonna be increasing the checking account cause we put it into the checking account. The other side is gonna be increasing the equity section. No effect on the income statement. All right, here we go. Let's say save that and just check that out if I get any kind of ah error messages when I save it and I think it saved it, Okay, everything is green, so we're good to go and zeros. Let's go on back to the balance sheet and let's update the balance sheet. See what happens here. See if our cash account lines up. Now we're at their 1907 to 854 And so that's the 1907 to 854 that matches what's on our bank statements. That looks good. If I go into that account and see what happened from that last transaction that we did, we're gonna have a received payment type of transaction. So if I scroll on down are actually should be at the top. Here it is the 1058 11 and received money going back to the balance sheet going to go down to the equity section now and within the equity section, we see that we have the capital investment now increased by that 1 78 11 Now just realised that this current year earnings that's from the income statement that's going to roll into retained earnings. So just so you can kind of see what happens with retained earnings, let's pull this up to you like 2021. Ah, and you'll and you'll see what happens with that retainer, and they're gonna pull this up to the next year January will just say January 1st. And what's gonna happen when I hit Enter update. This current year earnings is gonna roll into retained earnings. So I'm gonna say update. And if I scroll back down now, where the next year it turned into retained earnings, So just realize that it's still in equity account. But this is the account that the income statement rolls over into, and this account will just be a permanent account that represents the owners investment. They never roll it out like zero doesn't take it and clear that out to retained earnings or some other equity account is just always gonna be there for the life of the business unless you were to clean it out of the investment account. So this is kind of like the investments that you put into the company over the life of the company. So if the beginning balance was from something that you put in, then from your personal account, you might want to put it here and you can kind of break it out. Or if it was from a prior prior work that rolled over to retained earnings from prior business years, then it might be more appropriate to put it into retained earnings. So I'm gonna bring this back. I'll bring this back, Teoh the March 2020 and update that. And next thing we want to take a look at the reconciliation report. Noticed. Now I'm the reconciliation. If I update this, I've got 84 9 17 What happens if if I update this? What happens to the reconciliation report? Scrolling back down. Now it's gonna match this at the 1 97 28 54 Right? And that's what ties out here. The 1 97 28 54 And then it added this reconcile ing item of the 1058 11 because that's on our books now. But it's not on the bank statement. It didn't come in through the bank feeds. So what's that going to do to our our bank feet type of information or a reconciliation reports? Let's go back on over to the first tab and let's go to the accounting drop down, go back into our bank accounts and see if we can complete this reconciliation process. So then I'm gonna go on down and take a look at our transactions. No, we don't have any more down here that are showing that are unreconciled from the bank feeds . So I'm gonna go back up top. I'm going to go to the manage, and what I want to do is go to the account transactions, manage and then account transactions. That'll take us basically into that same screen. So instead of us going into the reconcile screen like it normally would when we're going into the reconciliation information, it just simply took us to the account transactions screen. So here's our account transaction screens. You'll note down here that we have this item that is not reconciled, so it's unreconciled. If I go back up top and I go to the bank statement, I don't see that item right that that item isn't here. So that's gonna be the problem we put. We have it on our books, but it's not on the bank statement now. Normally, when that happens, it might be like an outstanding item, and that's what it's showing that as over here, meaning normally, if something's on our books and it's on the bank statement, it's because we entered in there and it hasn't yet cleared the bank in this case because it's the beginning balance. It's a bit different. It's the fact that we didn't We haven't entered all the transactions prior to the cut off date when we started entering the data. So we need to basically manually reconcile this first amount. This is the only one we should. You really need to manually reconcile once we've done that for the first wreck. Bank reconciliation. We should be all good to go going forward. So the way you manually reconcile, we want to be on this account transactions Over here, we got to go to the little plus button up top, and then there's item down here that says enable Mark as reconciled. So we have to enable that ability to do so. Once we do that, we'll see a new tab that pops up down here. So I'm gonna enable this section and then we see this item down here that says mawr, and that's going to give us our our markets reconcile or unmarked as reconcile. And that's what we need to get this this last piece in there for the for the first bank reconciliation. We won't need this for the next one. So I'm gonna go ahead and check this off. I'm going to say that one is reconciled. I found that on the bank statement where? Well, it's not in the data of the bank statement. It's in the beginning balance, which isn't yet in our system. All right, so we have to check that one off, and I'm going to say, check that off, and then this drop down, we're going to say Mark as reconciled, so we'll mark that one has reconciled. It is recommended that you only markets reconciled in cases where the original bank transaction data cannot be imported from the bag. So that's the general recommendation again, Because it's our first bank reconciliation. This is kind of exception. So we're going to say Marcus reconciled, please, And that should that should do it. So we're going to say we'll go down there now. It is reconciled. So now if I go back to the bank reconciliation once I update this, you would think that this this amount should disappear. So I'm going to go back up top and reconcile and then scroll back down. Now we're in balance. So this is the bank reconciliation this amount matches our books as we saw and also matches now the 7 90,028 54 on the bank statement. So just note that this is the report that you really want. Like, if you were talking Teoh, an accountant or an auditor, they would want this report and you might think, Well, why would I even need? It's so basic. It's just got two numbers that are the same. But remember, if you did, if you did like a full service accounting system and you enter data into the books and we weren't entering the big data directly from the bank, there would be outstanding items. There would be checks that we wrote that hadn't cleared, possibly deposits that are out. That hadn't cleared, and we would have those outstanding items that would be a difference between the bank bounce in the book bounce. However, if you're in a system where you just completely reliant on the bank statement and you're using the bank statement to create your books, which is fine, just recognize you still want to kind of reconcile this report, but it will be a very simplified report and the thing that we're doing is just trying to tie out between, you know, Did we Did we enter into everything into the bank and did we not, like, duplicate er double enter something into the bank? So you still want to check out this report and just realize it'll be more simplified than if you were doing, you know, the full service bookkeeping, but it's still necessary to check against basically, ah, data input error. Also note that if you go back to the prior tab and you go down to that reconciliation item , it will give you a difference. See, it says bank transactions source over here. So if you'll see the ones that were kind of manual in reconciled down here because it'll say user down here rather than imported. Now, once you're done with the bank reconciliation, you may want to go down and say, OK, we've reconciled for March. Let's go ahead and publish it, and that kind of gives us our permanent basically a record saying, Hey, it's it was reconciled, been reconciled at this point in time, so it should kind of save that reconciliation and then if something happens, that kind of changes the data in the future, then you already have your basically saved reconciliation here, and you should be able to basically hopefully used that to see if there's any problem. In other words, if someone in the future back dated something or changes, change something in the past that had already been reconciled, you want to basically show Hey, I was reconciled at this point in time as of this date, and then hopefully you can use that to go back and figure out any problems that may happen in the future. So that's it for now. Let's get out of here. 14. 415 1 Upload Bank Transactions: in this presentation, we're gonna upload bank transactions for our second month of operations so we can continue on with our practice problem. Uploading the transactions will be much the same as the first month. But as we go through the second month of transactions, that should be a little bit easier because we've memorized some transactions. We have some transactions that are in the system, so it will be a little bit easier for us to reconcile. We want to see what those changes will be as we enter the second month of data. And if we set up a bank rules, then that should make it easier as well for the system to pick up that information and make more of the financial statements kind of automatically for us from the bank feeds that we will be setting up and importing into the zero accounting system. Here we go with zero. Here we are in our I were a triple G company dashboard. We're gonna be going on over to the accounting tab. We're gonna go down to our bank accounts now we are imagining we have our bank feeds set up . If we had our Ben feet set up directly, then the information will be coming directly from the bank into our system. We would take that information and then obviously create the financial statements from it or match out that information as it feeds into our system with what we enter into the field that would have us entering or setting up the bank feeds. We talked about that in a prior presentation. The other way we could do this is, of course, take that information downloaded from the bank and upload that that information which will give us or get us to that same basic spot well, where we will have the information from the bank in the system, which we will then use to take out of what I would call like a limbo where we have it. It's not reconcile. It's not added to our financials yet and then add them and used them to create our financial statements. That's what we're gonna do in our practice problem. So we're gonna go over and we're gonna add the second month of basically data to this practice problem will go to the second month, and as we do so, what kind of see what the second month looks like as we're entering a similar data. But for the second month of operations. Then later on, we'll get into kind of more complex data that we might input and think about different kind of bank rules we can set up as well as look at credit card data. So what we're gonna add this time is going to be this information. So this is gonna be the second month of operations. If we were to consider it in terms of a bank statement, it would look something like this. So we have a bank statement for April now, Beginning balance is gonna match. What was the ending bounce of last period that we input last time, which was March. And then we have our additions and our deductions to upload this into zero. We need this in just a transaction type detail. If we were to download a item from the bank, we could do so in multiple types of formats, like a Q B o type of file QuickBooks type of file. Or you can have kind of ah basic spreadsheet type file, which you can open in Excel, which is called a C S V file. So that's what we have here. We have provided you with the C S V file for the month of Ah, March April. So for the month of April, and then you could take this information and import it into the system. Now, if you go to the file tab in Excel and you wanted to create a CSB file that you can import , you can say browse and then save as and then you're just gonna change the extension. So you have the extension here, which is a C S V, as opposed to an Excel, which is a dot x l s X file. So that's how you can kind of create the data you want when you downloaded stated from the bank, it's usually pretty basic. We just have the date, the amount and then the description. That's usually what we're gonna take. And that's what we're creating our financial statements with. We've got to take that information and basically use it to create our financial statements . With so few dental, this information from a bank, it'll typically have these three line items, and that's that's in essence, what you're constructing the financials with I'm gonna close this back out, and then we're gonna upload this, I'll, I'll save it. And then to go into the transaction were in this checking account for Chase. I'm gonna go to the manage account, drop down, and then we're gonna go into the import a statement. We're gonna be in 14. A statement. Same screen we had for the last month. We did this within. So we have in a new window, go to your bank site, download your bank statement and then upload the bank statement here. These are the file types that you're able to upload. We're gonna be working with a C as V, which is, in essence of spreadsheets, simplified spreadsheet program. Kind of like Excel without all the format in detail so that the format and all the cool stuff that Excel can dio all that kind of format in detail will not mess up the upload projects. So that's why they kind of stripped that away. So it's just a basic spreadsheet. So what? We're gonna go to browse, then and find our files a brow. Now, I'm in our course of data files, so you should have access to this course Datafile if you're in the course and then we have bank data, we want the upload for April. So make sure you're picking up the April information, so I'm gonna double click on that. I notice it looks kind like an excel file, but it has a C as v extension. So here it is. And again, do you see that dot C S V? That means to see as the extension, which is going to be compatible with a file type that we can import. Then we're gonna go ahead and import that information. So here's what we have. So we're gonna match up the line items, basically the headers. So we got the transaction date, the payee, the notes. So he was kind of like an example as we saw it last time, if we were to match it up down here we have the transaction date that's gonna match up to our header for the transaction date. So if I was to look at the headers here in the C S V filed, it's basically just saying, Hey, is that transaction date lining up to what we want here? Yeah, there's the transaction. Date is going to transaction date, then we have the amount, and that's time out to the transaction amount, as we can see here. So that's gonna be that the amount on our Sprint spreadsheet is tying out to their name transaction amount. And then the description ties out to the description that generally all you really have when you get the download, the bank feed information. But you can't have other fields within zero, which means you can actually kind of take this data and possibly doom or two it right. You can actually add more information here before you upload, which might be faster. So if you want Teoh, upload information and add more detail before you take it from here and upload it to zero, because then you can. You can manipulate the information in a spreadsheet type format, which might be a little bit quicker before you put it into the database program. You can consider that so other fields that we don't have included here the payee field not included here. You could go through and and say, Hey, you know, let me add a P e field and basically populate that information Before I imported, you could think about that might be a little faster to do in excel The reference the transaction type So you can you can put the transaction type in there the check number, the account code, the tax type and the analysis code. So those are all added fields that you could consider. But like I say when you usually get the transactions from the bank, If you just look at the bank free transactions, you'll have in essence, these three, these three columns that were the basic information you'll be dealing with. So let's upload this then. So we're gonna say save. We have 17 lines were imported. 00 of them were duplicates. We don't have duplicate information. That's great. We're gonna then say OK, upload that information. So here we have it. It bounces us over to that reconcile tap. So now it took that information from, in essence, the bank, and it takes us to the reconcile tab where we have the bank information on the left. This is the bank information. This is our information on the right. Now, remember, we're doing all of our information on this from the bank. That's kind of like our starting or launching point. And therefore, we don't really have anything on the right that's gonna be matching out because we're independent on the bank. We're gonna be creating our books from the bank. So like we did before, we're gonna match this stuff out now. Notice we have a little bit more detail here, like this one says, You know, this one is trying to match out for us, and it's creating this for us. How? Because it's basically looking at last time and think, Hey, look, this is what we did last time. Is this right? This one's not, you know so but it's not right here. But it could be. Sometimes it gets this right sometimes, all right, if I went back down here. Same thing is trying to pick its trying to pick this one up from a transaction last time and the same thing with that one. So and then if I go Teoh the next, let's take a look at the next transactions and continue on, see if they matched anything else up. Here's another one that they got right, right. Here's Edison and they're gonna match this one out. Now, this one note, they matched out, not by just guessing, which it could have probably would have guessed anyways. But this one we told it, That's Edison with a rule. So we set up this one. It's applying the rule called Edison to tie this one out so that one should be right, because we kind of made a rule to do it. This one's a draw, your recall and this one. We didn't set up a rule, but it's guessing that it should go there because that's what we did. Last time we had. We had that draw. And so it's still, even though it's not a rule, it's still kind of trying to help us out, which could be really beneficial. The bank feed. It's gonna pick that one up as well. So notice. Even if you don't set up the bank rules, it should be a lot easier to do the second month of operations because typically most people have expensive. The expense items will be very similar. And even if we don't know how to set up rules or don't do rules, it will give us these suggestions. Now. If you want suggestions all after you can say Ah, turn off the suggestions here. And then all those suggestions will be removed her head. But except for the one that that was a rule, So this might be a nice format if you were, you know, you want to tell someone else if you're using this with someone else and say, Hey, look, I don't want someone just clicking off, okay? Okay, okay. And some of the suggestions, because, as we've seen, they're not always right. If you're If you're saying Hey, look, if it's if it's something I want to repeat, I will set up a rule for it and therefore the rule will then remain. The rules remain suggestions. Do not. And that might be a way to go. If you're working with someone else in having someone else kind of help you out and you're saying, Hey, look, don't rely on the suggestions. If you think the suggestions air right, make a rule for it. So that your consciously doing that and then and not just passively clicking off anything that says OK, and that might be a good a good policy to work with. But if you have the suggestions on like we'll have here, then we can go through those suggestions and we can think about should we make a rule for it or not, And especially for the first couple months of operations, that could be really useful because every suggestion that comes up is a potential opportunity for us to then say, Is this a rule that I could make some? How universal can I make rules more stringent if I need to? If the rules not working here, and then we can in the wind gettinto to the more specific rules from that point forward. Now, if we go back up top, this is going to be on the bank statement transactions. So now we have the bank statement transactions. More transactions have been included here. We reconciled everything for the prior month. Everything for the current month not reconciled. And then if we go to the trend to the accounts transactions, this is gonna be our book side of things. We don't have the new transactions. All this stuff was for March. We have nothing for April because we're gonna be constructing April's book transactions from the bank, and we haven't approved anything yet to do so. Therefore, nothing has been input into our financial statements. As of yet, we will be constructing that as we go on future presentations. As we take these 17 items and make the account or book transactions from them. That's it for now. Let's get out of here. 15. 415 2 Add Expenses: in his presentation. We're gonna add expenses that we have downloaded with the bank feeds into our financial information to help us to create our financial statements with them. We're looking for those expenses. They're going to be the repeated expenses, Kind of like the low hanging fruit type of items that we can then pick up and create transactions with because their low hanging we can totally grab them, even though, you know, were not that tall. So he's gonna be kind of the easy type of transactions. Here we go with zero. Here we are in our triple G dashboard. We're gonna start off by opening up our financial statements. We're gonna go on over to the account and drop down. We're gonna open up the balance sheet first. Once the balance sheet opens, we're gonna duplicate that tab by going up to the tab up top, right clicking on that tab up top and duplicating it. Then we're gonna go back to the tab to the left. We're gonna do the same for the income statement. We're going to select the account and drop down. We're gonna go on down to the income statement, our second favorite report or other financial statement report. Really? Good one Really great report. We use it a lot. We're gonna right click on the tab up top. Once it opens up, we're gonna be duplicating that tab. Then we're gonna go back to the tab to the left. And let's look at our bank reconciliation report now, and we're gonna go to the accounting drop down to pick that one up. We're gonna go on down to you the reports this time, which isn't that far down. That's when the 2nd 1 I thought it might be further, but it's not. And we're gonna go down to the accounting and we want to be picking up the accounting information for the bank reconciliation summary report. Then I'm gonna go back up top right click on this tab and duplicate that tap. So we got our three reports and then we're gonna do stuff on the left Tabs. Three reports on the right tab. We're gonna do stuff on the left tab. Then we're gonna go all the way to the balance sheet, change the dates. We're going to be picking up the balance sheet and look at the date and the current were working in with, which is April. So let's bring on this one on out to April. There it is, April data. And obviously this is as of a point in time, so noticed the stuff that we put in March is still there in and April. If we go to the income statement and I take a look at the income statement were considering April, which we can think of in two ways, I could say Okay, I want this January through April which which will include the January information on so I can pick that up like so and then we'll still have our activity, as we've done January through through April. If I just want the month of April, then it will differ. So I can say OK, unlike the balance sheet. So if I go to April 1st through April 30th then going back into here no activity because we haven't added any activity yet from our bank feeds for to create the financial statements with As of yet, if we go to our banking and for our bank reconciliation, I want to take that from Chase. That's our bank account. The only one we have right now, so that's when we want. And then this one's going to be in April 30th the end of April. We'll update that. And this is what we have. Thus far we have are obviously are banking information. Nothing's been checked off yet. These are all from the bank. They haven't been added to our side. The book side yet. Therefore, they're all in this reconcile ing items. They will be disappearing as we add them. Now let's go to the bank, feed information by going to the first tab accounting, drop down banking information. Then we're gonna be looking at our account. Down here, we've got 12 items that are need to be reconciled or 7 12 17 items, 79 to look like a 12 to me for a second. That seven look like a to have picked up 12. It's really 17. So I'm gonna then hold down control, scroll up. So we're at the 125 on the zoom, the 125 that's where I like to be. And we're gonna go through here and look for kind of like again the low hanging fruit, those types of things that are repetitive things like the phone bill, the utility bill, those things that I know, who the vendor is, and therefore they should be things that we can pick up repeatedly. So I'll take a look at deposits later. We're not gonna do deposits now. This one's going to it. An insurance company that was pretty basic in that every company has an insurance company. However, it's kind of a problem is or it's a little bit different because we want we need to consider whether or not we want to put it into prepaid insurance or whether we want to just expense it at the point in time of purchase. So I'm gonna put that away for now. We can use a standard rule with that once we decide what we're gonna do with it. But I'll discuss insurance a little bit in more detail in a future presentations. I'm skipping that one. Then we have staples. Now I'm going to set up kind of a general rule on Staples. I'll pick up the Staples item here, and I'll pick it up and say It's office supplies now. You might think, well, staples most of the time, if I go to staples, which is like an office supply store, that it would typically be office supplies. But it might be the case that in some cases, if I purchase something large, it would be like equipment. So you could think of setting up a rule here and say, Well, it's office supplies if it's under a certain dollar amount And if it's over a certain dollar amount, maybe you put it into equipment, or at least have something where you can check it out if it's over a certain dollar amount . So maybe you said it office supplies under a certain dollar amount and then don't apply out over a certain dollar amount and in that way that you can always check it. If it's over a certain dollar amount or something like that, we'll talk more about rules later. I'm just gonna add the transaction over here as we go, and just note that once we do this for office supplies, it won't create a rule, but it'll create those kind of suggestions that you will have it are helpful, but they're not perfect, as we'll see when we see some of these suggestions later. So I'm gonna add this I'm just gonna say right office supplies. If I don't have this one, I'm just gonna copy, You know, the vendor over here. So I'm gonna say this is the vendor office supplies and pick that up in the name. I'm gonna add the new name. Remember, as you do this, you don't want to add too many names over here. So if there's some little difference in the name, like a number or something like that, that's a difference. Just be careful that you don't, you know, have a bunch of duplicated vendors that are basically the same vendor, and then this should be going to office supplies and select a drop down. I'm looking for something like supplies within the drop down. I don't see any supplies. The office supplies no office supplies. It's usually fairly common kind of expense. So I don't see that here, So we're gonna have to add it, so I can't add it in this section. So I'm gonna go to more detail, going to go to the detail down below. And then here's the more detailed data input screen. So everything is the same that dates come in the same bringing over the description. I just need to choose the account. I'm gonna choose the account to drop down, gonna look to where I want to put it. Let's put it somewhere by this that the do's here. So let's make it 61 Ah, 6061606160 Add new account 616061606160 There it is. And then the account type is gonna be an expense type of account. And often times they will be when you have the outflows, when you're when you're thinking about the bank feeds. So we want to have just a normal expense and the name I'm just gonna put off this applies spell that right, and then save that. So we set up that account as we go, and that looks good. So now I'm gonna save this transaction. This is gonna be decreasing the checking account on our actual financial statements and recording the other side to an income statement. Accounts at expense account called office supplies. Then I'm gonna go ahead and create this. I'm gonna say OK, and as we saw in month one, it will create that. I'm just take a look at the income statement, which will now be populating because that's the easiest place to see this. So if I update the income statement, we've now created this transaction, which is the 5000 expense on the office supplies. So I won't go through all of the tabs right now. We'll take a look at them later. But there's the Office of Lives. And if I go back through this next one's Verizon, that's our phone company again. Very common type of transaction. So I can just set up the rise and it's going to go to the telephone company. Most people have one telephone company, one account. You can imagine situations where you might have multiple different accounts that you want different phone bills to be going to. But usually it's just one account, one phone bill, so you may not even need to set up a rule. You could set up a rule and say, Hey, Verizon, whenever you see that, put it to the telephone expense. But if you don't do that, the system zero will basically give you that suggestion now. We didn't have it last month, so there's no suggestion this month. But if we put in this account, then it'll suggested to us next month. Basically. So I'm going to say that I'm just gonna pick up the name. So I'm gonna pick up the name and say, that's going to Verizon, and I'm gonna put this to a telephone, which I don't think they have a telephone here either. Huh? No telephone. All right, so then I'm gonna add the telephones. I'm gonna have to go to add details. Gonna add a new account as we go. Verizon's the name. The date is being picked up rising here. We just need the account. I just want to take a look at the account number I want. I think I set up a utilities accounts before, so let's put it next to that. 63 35 Let's make it 633763376337 Add the account 63376337 And this is gonna be an expense type of accounts. I mean, to select the drop down a top, we're gonna make that an expense type of account. I'm gonna call it telephone and there we have it. So we're set up an account as we dio often times, if it's gonna be money going out, it's gonna be an expense type of account. Kind of want to think about where you want that code number, which is basically the account number. This will be doing what once we save it, decreasing the checking account and recording an expense on the income statement for the 3 62 accounts affected all the time. We're gonna say, save that, that will post it. Then we can reconcile it. Now it's switched from create toe match because now this is on our books. We've actually recorded it now, and this side is the bank side. So we're gonna go ahead and say, OK, match that out. Back to the income statement. Let's see what happens. Let's update it and we go on down. There it is. There's our telephone. So it's been added to our books at this point. That's only one side. The other side happened to the checking account went down, the expense went up. We're looking at the expense account there. Then we have this item Adam Hamilton. That's actually gonna be a payroll item and we'll discuss a little bit how we're gonna deal with payroll later. So I'm not gonna dio Adam Hamilton or Erica will discuss them at a later point in time and then these air deposits. So I'm not gonna take a look at those right now, Chase. That is actually a payment that we're going to say is on alone. So alone that we're gonna have a set up and it's gonna be a loan payment and then fender is a vendor, so we'll discuss the vendors later. Those air purchased purchases of inventory in our case, guitars were going to say and then chase again. I think that's a loan payments, so I'm not gonna deal with that now Then we have this easy window repairs, and that's when some kids threw a ball through a window or something. We had to fix it. And so we had repairs and maintenance so easy window repairs would probably be pretty much all the time going to have repairs and maintenance. So we can set up a rule to say that we probably don't need to. However, if we're gonna be dependent on the suggestions once we enter this vendor into repairs and maintenance every time it comes up, That will probably be a suggestion saying, should this go to repairs and maintenance. So I'm gonna copy this over and say we want a name over here. I'm gonna be putting this to repairs and maintenance, which I don't think we have in here. No. So I'm gonna have Teoh ADM or details so I can add that account as we dio. So I'm gonna go down and I say this the vendor that dates right then I'm just gonna add the account. Let's take a look at the account number we may want over here. And let's put it, Ah, next to like, let's put it on on 63 to 5. Let's say 63 to 563 to 563 to 5 and 63 25 That's what we want. And then it's gonna be an expense type of account will select the drop down. We'll take a look at the expense. We want to pick that up and this is gonna be repairs in Maine, 10 ands, and now not right. And then start right. But there we go. Repairs and maintenance. All right. I thought I smelled that one, right. I thought I could get that one right, but apparently not, but still check fixed it. So it's okay. So then we have this, and that's gonna be decreasing the checking account. Once we record this, the other side go into the expense of repairs and maintenance, we're gonna say save transaction. It'll then save that. Now it's been recorded on the books side of things. And now we can match it if we so choose matching what we just recorded entering on the book side and match that to what's on the bank side. So we're gonna say, OK, let's check that out on the income statement back to the income statement. Let's update the income statement, and we'll see that we're creating the income statement, riel time right now, which is quite exciting. The balance sheet is it would be cash account would be the other side balance sheet going down. So then let's go back on, see what else we can pick up any more low hanging fruit that we can pick up without even getting on our tiptoes. So here's the other one for easy window repairs. Now it's not giving us the suggestion yet. Like if if I was Teoh, run through this again. Let's refresh the screen and see if it gives us a suggestion on this. Ah, so I'm just going to refresh the screen by clicking on it and then refreshing it. There we go. Then it gives us Ah, suggestion. So now notice. It's saying, Hey, look, you know, you just posted one easy window repairs last time. This is the same vendor. You put it to this account last time. Is that what you want to do this time and note the suggestions usually pretty good. The suggestions, right? I didn't make a rule about it. It's not a rule. If not applying a rule, that would be different. That would be us physically going in there and saying I want you to do this specifically. This is this is the system saying, Hey, look, this looks like the same. Do you want to do that? So if you're gonna rely on these, these are things that I would if you want to be more stringent about it again, work with another team, you would use these suggestions to see if you could make in a relevant rule and then I would make the rule for it. And then when someone else works with it, you can turn off the suggestions and say, Hey, just deal with the rules because the suggestions aren't always right. In this case, it would be, but not always. So I would always go back in there and just kind of double check those suggestions quite a few times and then make a rule whether it once, you're comfortable with it. So I'm going to say this one's good. I'm gonna say, Yeah, that's what I want that's gonna happen. So I'm going to say, there we've matched. We've created and matched that one at the same time we created it and matched it. So if I go back over than to the income statement we currently have in repairs and maintenance that 1 23 If I was to update this report, as I will right now, then that would change as it does to the 9 53 37 Let's go back on over and see what else we got over here anymore. Low hanging fruit. This one, Edison, this is a really low hanging one. This one's like almost on the ground like we almost have to like Like, it's right where our hands are. We could we don't even have right Put our hands out there there because we made a bank rule for it. So this time isn't This is not just a suggestion from the system. It's not one of these suggestions. If I unclip this, it doesn't go away like other suggestions would. It's still there because it's saying, Hey, you apply. You made a rule on this last time you said Any time you have Edison here, then it should be going. You're gonna apply this Edison rule, and so this one should be, You know, we made actually the rule for it. So that's gonna be something that we're gonna play out. The rule basically says, Of course, it's editing being our utility bill. Therefore, when you see the utility bill, we want you to create, you see, it's on the create tab, not the matching tab we want you to create on our side the transaction that's going to be going to Edison. So we're gonna build, create and match it, create it on our side and tie it and reconcile it to the bank as we select Connect here. Or Okay, so there we have that. Let's go back up top and just take a look at what happens with that. If I go to the income statement, it's gonna show up. Once I read updated, we're gonna see down here, uh, utilities and update it. And there it is. There's utilities, and we're just totally creating the financial statement as we go. It's just it's just amazing. So then we have over here now we're left with all I think that's all the low hanging fruit here. Let's just double check it up. Top were going to say that we're not gonna do the deposits, so I'm not gonna do those will do those next times. It's a loan. That's our vendors. And that's our employees. So I think that's going to be it. Let's just double check what happens over here. If I go on over to the to the balance sheet, I'm gonna hold down control, scroll up. Just a big get up to that 1 to 5. That's where I like to be that I'm gonna update this report so we will update. We're then gonna go into the checking account. Let's go into the checking account. We should see these decreases now in there. This is the other side of the transactions. Obviously, all these transactions, one side of them will be the checking account, because that's where we got them. All right, great. We got them from the bank feeds. So all of these one side of the transaction should should be and effect on the checking account. All these happen to be decreases. So here's all the ones we just added for April. They're all the decreases for the checking account here. Then I'm gonna go back. Let's go back on over to the balance sheet, and then let's go to the income statement, which we already saw. So these, I think, are all up to date. So it's update this. We've only added the expenses. We haven't added any deposits. Therefore, no income yet, so we have only added these expenses are being created as we go. Then if we go to the bank reconciliation tab, what's gonna happen when I update this? This number right here is gonna change to what's on the balance sheet because that should be changed into this. The 188 267.17 And these amounts that are related to the ones that we that we input, which include things like the Verizon and the Staples and whatnot, should disappear. Let's go ahead and update it and see if that is indeed the case. So we will update this. And so there's the 188267 You could see there's less transactions down here because they have now been reconciled. Now, let's go back to the first time where we have the bank reconciliation scroll on up to the top within the bank statement tab, We're gonna have some items in April. This is what we included when we imported the information. This is the bank side of things, and these items are now reconciled. These ones in April are now reconcile because we totally way matched them up and reconcile . We created and then matched up the transactions. If we go to the account transactions, we're going to see Ah, the the accounts. Now, we have transactions in April. Actually, we've made these transactions from the bank feeds and reconciled those transactions. That's gonna be it for now. Let's get out of here. 16. 420 Add Insurance: in this presentation, and we're gonna add a transaction related to insurance from our bank feeds into our financial transactions. Here we go with zero. Here we are on our triple G dashboard for zero. We're gonna open up our financial statements, going to the accounting and drop down and going on down to the balance sheet. Once that balance sheet opens, we're gonna go back up top. We're gonna be right clicking on that time. We're gonna duplicate that tab. We're gonna go back to the tab. The left to the same thing for the income statement selecting the accounts and dropped down , Going on down to the income statement open. In that financial statement up our two favorite financial statements, the two main financial statement reports. Right, clicking on the tab up top. We're gonna duplicate that tab. We're gonna do this one more time for another report. That being our bank reconciliation, we're gonna go to the accounting drop down, go on down to our reports, and then we want to go down to the accounting section. Take a look at that bank reconciliation. Some Maria or reports once that opens up, will go back up top to the tab of top right clicking on it and duplicate that tab. Let's suggest our dates. Now go into the balance sheet tab. We're gonna adjust. The date were in the month of April. Now we're working in them Were not in the month of April, but that's where our practice problem is. So that's where we're working. So there it is, April. And then the income statement. I'm gonna bring this just for the month of April, so we just see the current activity that will have. So that means we got to set the beginning date. April 1st 2 April 30th. Now, we don't have anything after April, so I might not do this every time. I'll just set the beginning date. So there's April. That's what we have so far. Bank Reconciliation tab. We're gonna set this to the Chase Bank, and this is once again for the month of April. April. So there we have that and update. Then we're gonna go back to the first tab, and we are going Teoh, go to our accounting. Drop down. Let's take a look at our banking information going back into those bank feeds where we have 12 items were gonna go into those of reconciling items. We have 12 items left now. We're gonna consider the insurance information now, so I'm gonna hold down control, scroll up just a little bit to get to that 1 to 5, cause that's where I like to be in terms of the zoom going on down. We're looking for the insurance. Now we have this one for the insurance here. Insurance is a little bit tricky. I just want to point out that I mean, if any type of insurance you have, it's a little bit different than other type of expenses, like the phone of the utility build. Because when you pay for the insurance, by definition, you're paying for it before you get the service. In other words, that coverage hasn't happened yet. It's gonna happen in the future as opposed to the phone bill or the or the utility bill or the electric bill which happened in the past. And you're getting paid for the past use that has happened. Therefore also, and on the insurance you might not pay for it monthly. You might be paying for it like 6 to 12 months in advance. And that means that makes a difference. Because if you were to extend expense, something like this, let's say we paid this insurance bill 12 months in advance in the month of April and we expensive at the time of purchase. Then what's gonna happen is ah in April will have his big expense on it. And then in March, we won't have any expense, even though the coverage does coverage march as well. So when I do a comparison, in other words, from from April to March, April will look worse because of this big expense. But really, that expense was something that helped march and future periods. So typically, if that's the case for these type of things, that's why another reason why you might deviate from from a cash basis to in a cruel paces under that method. And if you do so, you want to think about adjusting entries that you or your accountant might do so you might talk to your accountant about insurance and say, Well, what about insurance? Where should record that? And you might work out a deal saying Hey, look, you record insurance to this account called Prepaid Insurance and then we're gonna periodically go into the insurance account at the end of month or year and adjust the amount out of prepaid insurance and expensive as you go. So that could be kind of, ah, method that you could use. If you set that up, then it would be easy to to set that up. All you would do is set up the insurance every time you pay for insurance. It goes to prepaid instead of an expense and asset account called prepaid insurance, and then you'd have to go in and adjust it, or your account would have to adjust it periodically if, however, you don't want, and once you do that, you could just set up again. The bank feed always go into the same account you always recorded to the same account. But there's this added step that needs to happen by you or somebody else the accounting of the adjusting department at the end of the period. Or you could do the easiest thing, which is just a stick with a cash basis method and just say I don't care that it's prepaid . I'm gonna recognize that it's gonna throw off my matching principle between you know the month of the income statement. I'll deal with that. That's fine. I want to just expensive now and be done with it here. And then I don't have to do any adjusting entry, and that's what we'll do now. Well, just expensive. Either method that you used noticed you could do. You could set up the bank feed to just do whatever. Whichever method you pick, you could set it always to go to the same account. Either prepaid insurance or insurance expense on a cash basis, prepaid insurance, accrual basis or insurance expense on a cash basis. The accrual basis then requires an added step for an adjusting entry at the end of the period. Cash basis does not accrual basis will have a better matching principle. Cash basis will have a worst matching principle, but is easier to deal with. So we'll just use the cash myth method now because that's what we've been going with. I'm gonna go with the safe insurance company. I'm just gonna copy that into the who and see if we then have an insurance expense over here. Do we have insurance expense? Any insurance expense? No insurer. Other tickets. I thought they had won. So 63 to 0. We don't have to set anything up, so we're gonna create this as we go when it closes, we're gonna create this as we go, and we will match it at the same point in time. Next time we have an insurance expense for this vendor, it will probably make a suggestion for us. And that suggestion will probably be right. And we could set up a rule based on that suggestion. If we so choose. So I'm gonna say OK, and there we have that If we then check out what happens going to our balance sheet, I'm gonna be updating the balance sheet and take a look at the effect on it will go into the checking account here. I'm gonna see that checking account should, of course, go down because we just wrote a check for that 11,000 and that's for a year's worth of insurance. So going on in here, scrolling on down, we're going to say there should be 11,000. There it is. All right, then I'm gonna go back to the balance sheet. We're gonna go then to the income statement. The other side once I hit Inter is gonna appear here on the income statement. So if I go back up top and say update, we're going to see the 11,000 here Now again, that's a large amount. 11,000. Because when I when I compare, say, April to the prior month if I didn't have the 11,000 there, maybe it was covered by something was paid in the past last month and and now I have this big expense which makes net income goes down. And then if I go to May, I'm not gonna have an insurance expense because I didn't pay for it in May, even though May is benefiting from the insurance that I paid in April. That's what we call a problem with the matching principle. But as long as you recognize that, you see that you could say, Oh, well, that's why my insurance that my my net income is low because of the insurance expense that I paid that's gonna be affecting multiple periods into the future. You can kind of still make decisions based on that as long as you kind of recognize that. But that's gonna be the problem with the Akash versus a cruel method. And you also want to think, Well, how are you going to report that for financial statement or tax purposes and what not? And for that again, talk to your accountant with regards to any kind of pre payments and just see what they think would be the best system. Work out a system that works best for you. Then we're gonna go back up to the bank reconciliation tab. What's gonna happen here is we're gonna update this one that's going to change this bank that or book balance to what is on the balance sheet on the balance sheet We current on half 1 77 to 67. If I go back over here, it's also going to be removing that 11,000 as a reconcile ING item. Let's go ahead and do that. I'm gonna update this report, and I think that's right. Although this should be as of the end of ah, I should have Ah, April. I'm out in May. It won't make a difference here because I don't have anything in May. But if I update this report for the month of April, then same thing we got the 1 77 to 67. So 177 to 67 we no longer see that 11,000 as the reconcile ing item. If we then go back to the first tab then and we scroll back up top on the bank reconciliation tab. Now, this is what we uploaded from the bank feeds. Within that information, we now see that 11,000 should be marked as a reconciled. Now it was already there. Now it's just marked as reconciled. If we go to the accounts transactions, this is our book side of things. These the transactions that we have now created. So there's Theologian 1000 that we now created and have reconciled basically at the same point in time. That's it for now. Let's get out of here. 17. 425 Add Payroll Checks: in this presentation, we're gonna add transactions related to payroll related to payroll checks that has been received through the bank feeds within our accounting system. Here we go with zero way are in our triple G company dashboard. We're gonna be opening up our financial statements, going to the accounting drop down, going on down to that balance sheet. Once that opens up, we're gonna be right clicking up top, and we're gonna be duplicating that tab by right clicking and duplicating. We're gonna go back to the tap to the left, then opening up the income statement, selecting the accounting drop down, going on down to that income statement so that we can open it up and then duplicate that tab as well That financial statement. So we're gonna go back up top to the income statement tab or right click on it and duplicate that tab. Then we're gonna go back to the left. We're gonna do this again. We're gonna go to the account and drop down this time to the reports, the second option under the account and drop down. At this point in time, we're gonna scroll down under the accounting section. We're looking at they think reconciliation summary. Once the bank reconciliation summary opens up, we're gonna right click on that tab up top, once again duplicating that report. Then we're gonna go to the balance sheet tab on the right. We're gonna change the dates, the dates that we are working in with, and that's gonna be up. Teoh April were in April, so I'm going to go into that one, and then we're gonna go into the, uh, income statement. Now, I'm only gonna change the beginning day because we don't have any data past April anyway, So I just want to move the starting point. So we only see the April data and not the data that we input in March. So here we have the April data just for the month of April because we haven't entered anything after that point. Then if we go to the bank, reconciliation were going to say that we want this for the checking account here, we're gonna be picking up the checking account and once again, that date we're working in April. We're working in April here, and we're gonna update that. And there we have that one. Now let's go back to the first tab and we're gonna be going to the accounting drop down. Looking at our bank accounts were looking at the reconcile ing. We're creating our financial statements from the bake feet information. We have 11 left down here. As you can see it, we're gonna click on that reconcile 11 items and that will take us to our bank reconciliation. I'm gonna hold down control, scroll up just a bit, bringing us up to that 1 to 5, 1 to 5. That's where I like to be so that we can see. And then I'm gonna go down and we're looking for these two items now, these two, I happen to know our payroll items, and that's another one. I just kind of want to point out if you have payroll and you're dealing with the bank feeds and our goal here is to just basically wait till everything hits the bank feeds and then entered into the system well paid role kind of throws a a problem at us him with that with that as well, because perils a bit more complicated for us to be processing now with payroll. When you're considering payroll, there's a couple options you have with zero. You could be going and setting up what zero recommends to kind of have an add on. And that's gonna be the payroll with gusto here. And, um, we're not going to do that because it's gonna be an add on features you have to pay money for. Basically, add on. That's how it would be with most accounting software systems. In other words, even if it's done within the accounting software, it's usually going to be in add on type of features gonna cost more, in other words, to process the payroll so you could do that or you. And if you did that, then you'd be processing pay through the zero system. In other words, you wouldn't be on a cash basis system where you're basically totally reliant on the bank feeds. You'd have to actually process the payroll through zero. And then when you go into this point, you be matching up that transaction, so that's one way you could do it if you have the employees. The other thing you could you could think about doing is what if you had 1/3 party payroll that was gonna take care of nothing but payroll, something like an 80 p or a paycheck. They might take care of payroll outside of your zero system and then give you that information periodically, and we'd have to enter it into the system. So, for example, if you have something like that, that's how we're gonna imagine this is set up. Let's say we had someone else third party doing our payroll for us, and they basically we're going to be tracking all the information. What looks something like this we have are two employees, Adam and Erica. Someone else's processing the payroll, and they're going to calculate all that information that the employee needs, including the growth pay, what was taken out, including, like Social Security, Medicare and income tax, which would would result in the nets. Check. So there's the net check. So in this case, then the net check for Adam is what would actually be process through our system. So if they've been processed that transaction through our bank account, what would actually come out of our bank? Account the net check 5 3039 33 so we can rely on the third party say, to give the employees everything they need, which is, Ah, paste up each time telling the employees, Here's the gross pay. Here's what we took out for payroll taxes on a check by check bases and a year to date basis and do with any other kind of human resource is payroll kind of stuff that needs to be provided and then on our side. How can we then enter this into our system so that we have the data to make our financial statements? So what we're considering under the most basic kind of system is to say, Hey, look, if you need more detail on the financial transactions on a person by person, employees by employees paste up by pay stub bases go to the third party payroll reports and they're gonna take care of that. If you need the financial information, what's the effect on the bottom line financials. Then we're going to try to include that on basically a cash faces into our system using the bank feeds. So that's how we're gonna work it. And then we have the employer portion, which means that we have to pay over and above these two amounts. So what happens from a transactional standpoint. Typically, if you were gonna enter this in, you would say, like, if I was gonna enter this transaction for the for the payroll, I'd have to say that we have the payroll expense would be increasing by the gross amount and then we'd have the payroll liabilities that we took out, which was the 1044. And then the actual check that's gonna be decreasing. The checking account would be the 3539 33. So we could enter this, basically detail information on an employee by employee basis and then match that out. Match that out to what we do, What we see here in terms of the net check, right, The 3539 I think that 3539 is here so we could enter those three accounts. But then we're still kind of on an accrual basis because we're dealing with this payroll liabilities payable. So if you want to be completely on the bank feeds, then you'd say, Well, I'm just going to record what has actually been paid. So in this case, we're going to say that the checking account has been paid the 5 3039 And so we're just We could just record that. Basically Teoh payroll expense or wages payable or whatever the expense account is now, it's not exactly right on an accrual basis, right? It's not exactly right because they actually earned 58 4083 and the reason we didn't pay them 5 4083 is because we took from them there with holdings and we have to pay that to the government. But that's being tracked hopefully. But that's gonna be tracked by 1/3 party payroll professionals. And what we're gonna do is say, Well, we'll just record the net check right now. Possibly this would be the cash basis method of doing that, and then when they take this money, when they take this money and pay it to the government, that's when it will. That's when that amount will clear the We'll see it in the bank feeds, and that's when we'll pick up the rest of it. That's when we'll pick up the other amount that's gonna go to the payroll expense when they actually pay it. So you'll see there's a timing difference here, so you can. You can work this out, be on a cash basis, but you still need. You'll be dependent on the third party Teoh process. The payroll reports that nine forties and the 9 40 ones, and you might want to be dependent on the accountants at the end of the year to make any kind of adjustments that might need to be made for financial statement purposes or tax purposes to tie out the payroll to the financial reports. So that's that's what we're going to say it Now we're going to say that the check went out for these two amounts. This is the Nets check. We're just going to record the net. Check the payroll. We're not gonna report the liability that was withheld. If you want to know about it, that detail go to the payroll professionals. We will record it on our side when it clears the bank when it's actually paid. So once we pay it, then we'll record it on our side on a cash basis as well as the employer. Abortion. Once we actually pay, it will put that all toe one account, which is basically payroll expense, right Pedro expense, including payroll taxes and the wages. So that's how we're That's how we're basically thinking about that is that payroll is one of those one of those areas where you do want to discuss this with your accountant and your SEPA and see what? What's the best system that you can set up both logistically for these purposes and, of course, to take care of the payroll, It can't be somewhat complex, Not on area. You can you want to really mess up on because it could get kind of messy. Once things get out, get out of whack with the payroll. So we're gonna be adding this to the payroll. So I'm gonna say, Adam, I'm just gonna copy Adam over here and new contact. I'm just going to say it's a new contact. We're going to see if we have any payroll. So if I scroll down here, we've got something I think it was Yeah, here it is. Wages and salaries. So wages and salaries. I'm gonna pick that up, and that's gonna be the one. And I'm gonna call it, You know, this is payroll, we'll say, and that's just on a cash basis method. So this is going to be creating a transaction which will decrease the checking account, record the other side to an expense account for the payroll on the net check method, and we'll deal with it, will deal with this basically as it comes through on a cash basis rather than having a payable. I'm gonna say, OK, I'm gonna do the same thing with Erica. So I'm gonna copy Erica, that's or other basically employees and we're gonna pace this year. And obviously this is that if we do this method, then we can clearly just take this information directly from from the bank feeds and just always be posting it to payroll. And once we see the payroll taxes being paid taken out and go into the government, we could we could pull stills out in a similar fashion that will make it easy for us to just take this directly from the bank feeds and the on a cash basis method. We can memorize these transactions in that way, So I'm gonna go ahead and say OK, and we've added those two in a similar fashion we've seen in the past. If we go then to the balance sheet and update this. We're gonna see these coming out of the checking account. So if we go into the checking account, of course, the checking account will be decreasing by these amounts that we have included. So if we scroll down here, we have Erica. We should see Erica. And there they are. Erica's here, and Adam that I'm gonna go back to the balance sheet, go to the income statement, and once I update this, we're going to see the wages expense down here. So we will see that I'm going to scroll back up top and update that, and then if I scroll back down, we see wages then popping up, so there's gonna be the wages for the month of April. It's on the net check basis, which isn't exactly right. It should be the gross pay. But we're gonna wait till the other amount clears the bank. You know, until we make the payment for the payroll taxes and then we'll record those as an expense for going or not, including the accrual of component, which is the payable component. And then we're gonna go back to the to the bank accounts here once I update this of this number right here is gonna be matching what's on the balance sheet to the balance sheet, which is the 1 73 097 And then we're going to see it disappeared. The amounts that are going to Erica and Adam. So it's update that, and so that should bring the balance to the 1 73 097 balance sheet. Is that what's on the balance sheet? Yes. So we're good there. Those two amounts gone ending balance. This should match what's on the bank statement. At the end of the day, it does not yet. Here's our bank statements at the end of the date should be at this amount. Once we reconcile everything, then then we should be. That should be the case down here. So we're gonna keep on adding these and that should be the case. So if I go back over currently it's at 1866 23 08186 It's actually tying out right now, but that's because these items that happen to be the reconciled items, they shouldn't be the reconcile items. They're gonna be included. What he should be is not reconcile in but included in this balance up here. So we're gonna basically you could see the two sides of the transaction. We're going to remove it from here, and then we're gonna add these transactions. Teoh, what is actually in the book side and therefore have no reconcile ing difference items because these air all items directly from the bank that we're just gonna add onto our books in some way, shape or form. Therefore, have no reconcile ing items which usually our outstanding transactions that that should be in here if we're doing If we're doing more of, ah, cruel method and not being completely dependent on the bank feeds to create the financial statements, then if we go to the first tab, let's take a look at the first tab and scroll back up. We look at the bank statement, information on the bank statement information. We will see those two paychecks which were already there before for Erica and Adam. But now having them the reconciled. So we have these two items down here. Erica and Adam have now been reconciled. Now, note I just noticed. Here we have another transaction up top for Adam and we could reconcile that as well, you might say. And you might ask, You know, why is Adam here twice? And Ericsson? Erica is only there. Once. Note that if you're actually giving the check to Adam, Adam might have held onto a check from the prior payroll and didn't didn't deposit them until the current payroll period. So since we're waiting until it clears the bank, there could be some lag in terms of when it actually clears the bank. Because if we wrote the check, it would be sometime in the past. So it's quite possible that Adam, you know, cashed two checks in the current month, even though you know, for two payroll periods. And that's kind of that's kind of timing difference that could happen with when you're using the bank feeds and you're depending on the bank feeds, you're not going to see it until it clears the bank. So let's see if we could find that other one over here and post that one out. So I'm gonna go back. Teoh the reconcile. Let's go back to the reconcile and there should be another one that's unreconciled for Adam here. So let's go down through this and we see, then this is Fender Chase. Here's the other one for Adam, so same process noticed. Now it's remembering it so the payroll can be remembered. And it's pulling this information over because it's the same information. It's gonna goto wages and salaries. That's it. That's OK. That's what we want. Both of these air happening in April, which shouldn't be the case if we were entering this. The payroll as the payroll happens because the payroll happened sometime in the prior month and one in April because we're doing it monthly. Those two things happened to clear in April because Adam held onto his check and didn't deposit it until April. So since we're dependent on the bank for this to clear, it didn't happen until until April. We have two of these things happen. That's the timing difference between, you know, process it on the cruel basis or when the actual transaction happened, even in the cash basis when the transaction happened versus when it cleared the bank. Those two things, they're gonna be another timing difference even if you're on a cash faces. So I'm gonna go ahead and add this one as well, and then we should see that then clear. And so now that will be included in the balance sheets. If I update the balance sheet now, we're at the 1 69 5 85 on the balance sheet, the income statement. If we update the income statement, then we are at the wages at the 7682 If we update the bank reconciliation, this amount will then tie out to the new balance on the balance sheet. So let's go ahead and update that. So there we have that item. So 1 69 585 which is what ties out here. 1 69 585 back to the first tab up to the top. Then if we go to the bank statement information, we should have all of the payroll items that have been reconciled and cleared. So there's Adam there and the two down below. And if we go to our accounting transactions now, we've added those three payroll items. We've both included them and, of course, reconciled them at the same point in time. That's it for now. Let's get out of here. 18. 430 1 Add Inventory: in this presentation, we're gonna add an inventory item with our bank feeds. In other words, we're gonna have a purchase that's coming through the bank feeds for an inventory item for us being the guitars. We're gonna use that in order to record a financial transactions in our books. Here, we g o with zero. Here we are in our triple G dashboard. We're gonna start off by opening up our financial statements. That's gonna be going to the accounting drop down. We're gonna go on down to that balance sheet first, opening up that balance sheet that we're gonna go to the tab up top right click in that tab and duplicate that tab. Then we're gonna do the same thing for the income statement going to the first tablets. Just go. Actually, to the reconciliation report. We're going to go then to the accounting drop down, going on down at the reports this time scrolling down Teoh the accounting section, looking at that bank reconciliation summary. Once that opens up, we're gonna go back up top, right? Click on the tab up top. Duplicate that tab. Then we're gonna go to the balance sheet on the right within the balance sheet. We will update the date to the month of April, the current month that we will be working in. That's gonna be April 30th. We're gonna update that sheet so that we have our balance sheet. We're gonna go then to the bank reconciliation. We're gonna be working, of course, with the checking account changing the dates to the month of April as Wells, That's gonna be April 30th and update that rub board. Then we're gonna go to the first tab and take a look at our banking information going to the accounting drop down. Looking at the bank accounts within the bank accounts were looking for those bank feeds, of which we have eight remaining. We're gonna go down to those eight remaining items within the bank. Reconciliation. Once that opens up, I'm gonna hold down control, going to scroll up just a little bit to bring us up to that zoom point of the 125 That's where we like to be scrolling down. We're gonna pick up items that are gonna be related to purchases of inventory now, so we have this one being fender. That's one of our vendors that we purchased from We purchase guitars and then sell guitars . So now we're gonna do things a little bit different than we did last time. Let's just consider our flow chart that is gonna be the QuickBooks desktop home page just to consider the flow chart here. So typically, we have the vendor section. If for purchasing inventory, we may have a purchase order, which would be a request, and then we would Then we would record the inventory, which would be an increase of inventory and an increase of possibly accounts payable. And then we pay off the bill for accounts payable at this point in time. Then we would have the inventory on the books as an asset until we sell the inventory. Now, that's gonna be in a cruel thing. That's in a cruel thing, that a non cash transaction. That's a problem for us if we're trying to depend basically on the bank feeds in order to create the entire financial statements. So last time we did the easiest thing to do, which is the cash basis thing to Dio, which is to just say, Hey, look, I don't have that much inventory. I'm gonna just by the guitar turn around and sell it. Therefore, instead of recorded it as inventory. We took it right to an expense called cost of goods sold at the point of purchase instead of first recording it as inventory and then recorded it. Two cost of goods sold at the point of sale, which is typically done at the point you create an invoice or a sales receipt. So now let's consider a bit more complex method and say, Okay, well, what if I want to track inventory? So are other options. Are we contract inventory? But maybe I don't want to track the actual items in zero. I don't want to list the number of guitars I have and the price and cost of those guitars. I'll do that outside. I'll do that in Excel, so I'll count my guitars periodically. I will record the inventory periodically, and I'll make an adjustment to adjust my inventory according to my physical count on a periodic inventory system and then with regards to the bank feeds. When I have when I purchase something of inventory, then I'm not gonna make items to track it in the system, but I will record it as an asset deviating from the cash basis system, recording it as an asset when I make the purchase. So then it'll be increasing the inventory account and that the supplementary information I have to back up that inventory count, not in zero. That will be an Excel spreadsheet or something like that. And then I'll make an adjustment periodically at the end of the night of the end of the week according to my physical count, that will reduce the inventory and record the related cost of goods sold. So what's gonna happen here? We're gonna increase the inventory as we see the purchases go through the bank feeds when we record the sales will record them with a sales receipt. We will not be recording the decrease in inventory using the sales receipt. We will then make a periodic adjustment, decreasing inventory to the physical count that we had and recording the other side to the expense cost of goods sold. So that would be that the second method that we could use if we did that method, Then we're gonna go back over here and say, this is our purchaser of guitars were just gonna add this to an inventory accounts. Now, we can't use the inventory account, Possibly that set up within zero, because they're going to try to tie that to the tracking of inventory. So we need to set up the type of account as just another current asset type of account, Not is like a inventory specific account. Because then then the software is going to say, Hey, you need you need to tell us what other inventory types. What kind of guitar did you purchase in our case so that we contract out? We don't want you to track that. We're tracking that outside. Therefore, we just need an account for inventory that's basically in the form of another current asset account. All right, so to do that, we're gonna go to the add details down below. We're going to say that this is gonna be offender, which we should already have down here, that we already have Fender. No, we don't. That's the new vendor fenders, a new venture. So we're gonna add that that's what we buy guitars from. That's gonna be the 25th. We don't have an inventory item again. We're not adding the items. That's what you would need to do in order to track inventory in the system. It's much more complex to do that. And so we're going to try to be in on the simple simplified side here, And I'm going to say we need an account then and we're looking for an assets type of account. This time we're not gonna expense it as we did last time and cost to get sold. We need an acid, and we don't see any asset account for inventory here. So let's pick one up. I'm gonna I'm gonna name it. Let's put the number in there at, like 12 95 Let's say let's say 12. No, this isn't best. 12 95 will go back up. Add new account code is gonna be 12 95 and this is gonna be the type of account which is gonna be an asset type of account. I'm gonna call it a current asset type of account. It's gonna be inventory on the name inventory is the name, and then we'll scroll on down and save that one. That looks good. So we're gonna record this. What's gonna happen? It's gonna decrease the checking account like all of these transactions that are decreases , the other side's gonna increase and asset account not be recorded as an expense. So I'm going to save that transaction. It will then create the transaction. Now we have this little match item up top. So it's on the books and the bank. We can then say OK, those are the two need to be reconciled or matched up. Then we could see what happens if we go over to the balance sheet and update the balance sheet. We are gonna have a decrease in the checking account. I won't even go in there because we've seen this a bunch of times gonna decrease the checking account. That point is, the other side went into this account called Inventory, So inventory is now increasing instead of it going to the cost of goods sold. This isn't a cruel transaction because we're not expensing it at the point of purchase. What we're gonna have to do in the future, then, is count this inventory in some way, make an adjusting entry either at the end of the night or the end of the week or the end of the year based on our physical count of what we know. Inventory should be at that point in time and will make it on adjusting entry, which will reduce inventory, record the other side to the expense of cost of goods sold based on our physical count of the inventory. That's how I would another method that you can dio. If you go to the income statement, then there would be nothing there. We haven't entered anything into the income statement. It won't be entered into income until you do in adjusting entry to remove it out of the balance it into the income statement Baked reconciliation report. If we go to the bank reconciliation once we update this, this will then be adjusted to match what's on the balance sheet and the amount that's related. Defender here will disappear. Let's do that. We're gonna update that report and see if that is indeed the case. So here we're now at the 1694 17.13 Balance sheet 169417.13 Back to this reconciliation, the fender reconciliation item now gone, Then we're gonna go to the first tab back up top. If we go into the bank statements. Then we will have the item for offender which has should now be reconciled. It was already included. Now it should be reconciled. Here it is. And then if we go to the account transactions, we will have added an account for Fender. So Fender has now been added and reconciled at the same point in time. That's it for now. Let's get out of here. 19. 430 2 Add Loan Payment: in this presentation, we're gonna add a loan payments using bank feeds. In other words, we're gonna have payments that were processed through using the bank feats that are decreasing the account related to loan payments that we are making. We're gonna use those transactions from the bank feeds in order to create the transactions to create the financial statements in our accounting system. Here we go with zero. Here we are in our triple G dashboard. We're gonna start off by opening up. Our financial statements are balance sheet first going to the accounting drop down, going on down to that balance sheet report once, and it opens up, we're gonna breed going up to the tab up top, right clicking on that tab up top and will duplicate that tab. We don't really need our income statement now, so I'm just gonna go back to the first half and open that reconciliation toe reconciliation in rough boards by going to the account and drop down and going down to the reports, the second item within that accounting drop down and then we're gonna go to the accounting section down below. When we're looking for the bank reconciliation summary report, then we'll right click on the tab up top. We're gonna duplicate that tab. So we got our bank statement on our bank. Our balance, it our bank reconciliation. And then we'll enter data on the left. Let's go back to the balance sheet. Let's update the date on the balance sheet to the date we're working on. And that's gonna be April 30th. April 30th updating that report. Then we're gonna go to our bank. Reconciliation were going to say that this is going to be the bank of, ah, chases the bank, and the date will be in April's will. Bring this on out. Teoh April 30th update that report. Then I'm gonna go back to the first tab, and we're gonna go to the accounting drop down, take a look at our bank accounts, so accounting drop down bank accounts, then we have seven items that have not yet been reconciled. We're going to take a look at those seven items and work with, I believe two of them. At this point, I'm gonna hold down Control strobe up a little bit. So we get to the zoom of the 125 so we can see it a little better. Then we're gonna scroll on down and we want to pick up the items to chase. Now, these two items for chase they cleared on the 25th and 20th are actually loan payments. So they're gonna be loan payments that we're gonna make on a loan. So if we have a loan payment, So, for example, if we purchase something, we're financing it and we're taking alone. If I got a loan from the bank, we have to make the loan payments in the future. Then we have a question. Couple questions We have to deal with one. How do we get the initial loan on the books? Because if I'm just using bank feeds and I look at my balance sheet, then I don't have a loan on the books yet. Why? Because the low and I took out sometime before sometime fryer to the point in time that I started using the bank feet. So I don't have any loan on the books yet because that was included, basically, in my beginning balance in cash at some point in the past. So one is the case. Well, how do I put the loan on the books. And two, if you're dealing with most loans than the payments are usually standardized, and you would need to break out the interest in principle to record them properly. Ah, and record the interest component. To do that, you would need an amortization table so the amortization table might look something like this. So in our case, we have the loan. 72,000 isn't on the books, and we're making these payments of the 1359 which we see two of them Right now, however, there's a break out between the interest and principal. So the portion of it that we should be pulling out each time we make the transaction not only that, but that break out between interest and principal will differ with each payment. So we cannot really just remember. This is really kind of a problem with the bank feet, because I can't even if I get this set up and I had was able to record two accounts at the same time, they're going to record it. I can't, you know, memorize the transaction because there's gonna be a difference between the allocation of interest and principal, even though the payment will be the same. So the question is, then how could I do this as easily as possible? And this might be some methods you wanna work without, So just working with your accounting firm on C p A. For impossibly. One method you might say is, Hey, look, I'm just going to record the payments here. I'm just gonna record the payments, and I'm gonna record them to the loan decrease in the loan. I'm not gonna break out the interest. Ah, and the principal, I'm just gonna take the whole thing, and I'm gonna record it to a decrease in the loan. And then I would like you. I'm gonna give you the loan document at the end of the year. You accountancy P A. I'm gonna give you the loan document, the in your tax preparer, and I'd like you to basically, you know, put the loan on the books, which would be a no adjusting entry which would increase the loan a credit to the loan, and then the debit then would have to be going to the equity account at this point in time , most likely right to put it on the books because it's something that happened prior to the point in time we started putting the bank feeds in. In this case, if it wasn't something prior than it would possibly be on the books if we took the loan out Ah, as as as a bank loan, because we would have seen it go through the bank fees and we would have to increase the loan amount. So in any case, we're basically going to say, I'm you're gonna have to make the amortization table to do that and then break out the interest in principles. We'd like you to put the balance of the loan on the books according to our loan agreement and then break out the interest in principle. We're just gonna be recording everything to the principal. So you need to work with in adjusting department if you're going to use basically this method which will be the easiest method for the data input to reconcile and do the bank feeds and then will require an adjustment periodically at the end of the month or year, breaking out the interest or principal. So that's what what I would suggest there One method that might work to make the bank feats as easy as possible. But like I say, you still need some kind of help, you know, or some other process other than the bank feeds to kind of to deal with that break out. So what I'm gonna do is I'm gonna create this. I'm just gonna put this to a loan account even though the loan isn't even on the books, right? It's not on the books yet, and we'll do that. Well, put the loan on the books and in adjusting entry with the help of the accountant, possibly. And then we'll do a periodic adjustment for the interest in principle. That's how I would imagine or consider breaking this out. So we're going to say the name then is going to be, and I'm gonna have to add more detail, See? So I'm gonna add more detail down here, and we're going to say then that I'll just copy the name. So a copy, the name that's gonna be the vendor. So it's gonna go to the vendor and there's the date not gonna have an item, and then we need ah, liability accounts. I'm gonna go to some kind of liability account here. So I'm gonna select the drop down and see if I could find a good account number. These air expenses, assets here the liabilities. So there's no loan account that we have set up yet, so I'm going to say, Let's make it a liability. I can. I'm gonna make it along or we do have a notes payable. Here's the notes payable accounts. I'm gonna be putting it into the notes payable. Actually, this isn't the same note. So maybe I want to put another loan account that's gonna be close to that one. So let's make it 27 10. So 2710 I'm gonna make it. I'm gonna go back up top, and I'm going to say this is going to be, Ah, the account of 2710 and it's going to be a I'm gonna make it a long term liability. I'm gonna put all the notes into that long term liability. So not current liability. I'm going to say it's a note payable, and I'm gonna put, like, the last four digits of the account number on pretending here, and then I'm gonna say save so there we have that. And there we have that set up. So I'm gonna then say, save and save transactions. So we've actually have recorded the transaction, and now I'm gonna match it out. I'm gonna match out that transaction, and there we have that. Now the other one is going to be the same. If I update or refresh the screen up top, it'll probably give me a suggestion to be able to do that. So I'm going to say, refresh up top and then it will refresh the screen. If I scroll back down, it should give me an indication. Now it's saying, You know, we have this transaction. It's the same as the last one and it's giving us, Ah, help with it. So it's not. This isn't a rule. It's a suggestion, but it looks good And note. If you use this simplified method, then the data input will be really easy. You'll say. Yep, that's what we want. I'm gonna say, OK, then go to the balance sheet. What happens on the balance sheet? If I go back up top update the balance sheet, then obviously it's coming out of the checking account so we don't need to check that it's still a decrease to the checking account. We're making a payment on the loan. If I go down to the loan noticed it's down here as a negative liability. Why? Because this is a different lone up top. This loan down below is another loan that we had that isn't on the books. We made the payment on that. What? We didn't put the loan on the books. And that means we're gonna We're gonna ask her accountant basically for help at this point in time and say, Hey, you know, we took this loan out before. You need to help us to put the loan on the books and they can do the transaction and we want you to Basically periodically, we want you to make an amortization table if we don't have one based on our loan document information and periodically making a Justin entry at the end of the month or the year breaking out the interest in principle which would then tie out the loan balance. Teoh this amount. How would that be done? You put the original loan on the books, Basically, bye bye. Debit in or crediting the loan for the 72,000 in this case and debit in, uh, the probably the equity account retained earnings. Possibly because it's something that happened prior to this point time, uh, starting this information in zero. And then we would have to basically make the adjustment to break out the interest, basically debuting the interest for in this case, the two payments, the 5 96 and then crediting eso We were debit. And then we would credit the loan for the same amount, which would bring the loan balance to this 69 8 78 So we should, at the end of the day, be able to tie this to the 69 8 78 with those kind of adjusting entries. But the point is going forward for just the accounting side of things for just the data input taking us directly from the bank feeds. If you use that kind of adjustment method, you can always just say I'm just gonna keep on posting this to the loan and then rely on a periodic adjusting entry to tie out to the amortization table, most likely with some help from an accounting firm tax preparer or C P. a firm so that if we go back up top and we take a look at to the bank reconciliation note that this 166699 13 that's what's gonna be this number once we update it and then we see that the loan payments will disappear down here. So let's update that, and we're going to see that the bank balance then is going to be adjusted to that 166699 All these are going to disappear once we complete this and there'll be no kind of reconcile ing items and then we're going to go to the first tab and scroll back up top. And then if we go into the bank statement information, this is what we got from the bank feeds. It was in there before, but now we have reconciled the items related to Chase. So this Adams are now reconciled back up top in the account transactions. We then have the account transactions that we have added related to chase and reconcile them at the same time. That's it for now. Let's get out of here. 20. 435 Add Draw: in this presentation, we're gonna add an amount related to draws using bank feeds. In other words, we're gonna have a transaction decreasing the checking account that we have with regards to our bank feeds, which is gonna be a draw from the owner. We're gonna use that bank feed transaction to create the transactions in our financial statements. Here, we g o with zero. There we are in our triple G dashboard. We're going to start off by opening up our balance sheet by going to the account and drop down going on down to that balance sheets. Once opened, we're gonna go to the tap up top, right click on that tab up top so that we can duplicate it will duplicate that tab. Then we'll go back to that one to the left. We don't need the income statement again. So we're just gonna be opening up that bank reconciliation and summary report, go into the account and drop down going to the reports to do so. Then we're gonna be under the accounting information down below. We're looking for that bank reconciliation summary. Then once that opens up, we're gonna right click on the tab of top. Duplicate it as well. Then we'll go back on over to the balance sheet. We're gonna change. The dates were gonna be up in April, so we're gonna select the drop down, bring that on up to April April 30th and then update that report. Then we're gonna go back to the reconciliation. I'm gonna be picking up the checking account here, checking account and the date once again in April. Somebody bring that on upto April. And there we have that we will update that report as well. Back to the bank reconciliate or the first tab and so that we can get into the bank accounts. We're gonna go to the county and drop down. We're gonna look at the bank accounts now, and we're gonna be, of course, going into those reconcile ing items, which we have five of them now. And we're gonna go into that and see our reconciliation items. Gonna update or zoom in a bit now. So we're gonna hold down control, Zoom in to the when. 25% 1 to 5%. Then we're going to scroll down and let us see the draw. There's a draw now The draw is going to be something that was going to come out of the checking account. It's coming through the bank feet. It might be called withdrawal. It might not have any kind of transaction because it's a cash that was taken out directly by the owners. And we have the owner taking money out when you saw last time. There's a question as to whether the owner takes money out. The best practice would be this. When the owner takes money out, it should only be for personal use. If it's for business use, you don't want to take the cash out. What you want to do is have the audit trail of it, because really, you want to use this for taxes to, and it's so if there's a question about something in taxes, you'd like the audit trail. You want to know what you spent it on, and it's more information if you spend it Elektronik clear with a credit card, so you don't really want cash transactions to track your outflows. If you're looking at it from a tax perspective, you typically want an audit trail. If you draw money out for personal use than that's fun, And that way, every time we see money that's being taken out just for cash purposes, we would assume it to be a draw. If that's not the case, if the money was taken out for cash purposes and we have to ask and say, Well, you know what is that A for the bookkeeper and we're asking, like the owner or something, you know, What was that for? And if they say, Well, I'm spending cash on this, that and the other thing, then the question is, Do we want to get receipts and kind of tie that out? Or should I just basically assume that all the draws air gonna be going to miscellaneous or office supplies or something or something like that? And we did that last month. If that happens, then what happens is it's gonna go on the income statement as an expense, and it might not be well categorized unless we have all the receipts that we're gonna tie out, which we really don't want to do. It defeats the purpose of having the training the bank transfers to make this a nice, easy process. If we have to, then go through the receipts right, So that's gonna so we're gonna do it the way we would like to see it this time. Which is we're gonna assume that this draw money being taken out of the account was taken account from by the owner for personal use, which is fine. And then we could just assume every time that money comes out as cash, just cash being taken out is typically going to be a draw by the owner. And we'll put that to an equity account. So note it's trying to memorize for us again. It's going to take a look. Last time, the system saying you put it to miscellaneous and you called it miscellaneous expense. And that's not right this time because we're going to say this time it's going to go to an equity account were changing this transaction. So we didn't make a bank rule the systems trying to help us out here, and we're gonna say, No, that's not right. And this is where these kind of suggestions down here may not always be right. If you're doing this yourself, you just kind of want to double check all the suggestions so that you don't just to say OK through the whole thing and pick things up that are wrong. You want a kind of double check those, and then if you once you get that double, check down. If you do it yourself or if you have someone else do it, I would once again recommend you make those suggestions into rules, and so so you could just make a rule about it, and then the rules, you know, that are pretty solid. They should be pretty solid. And then the suggestions that further come up in the future you can see whether they're good or not, and whether you can make a rule about them or not. If you have to do things such as this and change the accounts each time like the suggestion is coming up with something that's not quite right, then is it possible that you could make a more complex rule that might be able to distinguish when something should be, in this case, a draw versus the miscellaneous expenses? There's some way you could make a more complex rule so that it can automatically kind of pick that up so we'll talk more about rules later. But now we're gonna change this and I'm gonna keep it to the miscellaneous. We could put the owner. This is really the owner that's taking the money out. And this time I'm not gonna put it into the miscellaneous. We're gonna put it where it should but go typically when money is taken out in just cash and that's gonna be in the equity section. So within the equity section, we're going to see if the owners draw. We're gonna say equity section owners draw. That's the one we want. We're gonna go ahead and add this and reconcile it at the same time. So I'm going to say, Okay, there we have it. Let's go to the balance sheet and see what happens and update the balance sheet. We know, of course, it's money going out, so it's gonna be decreasing the checking account. I won't go in there again. We've done that plenty of times the other side not to go into the income statement but directly to the equity section into this account called owners. Capital owners draw. So this is the money that's coming out. So no, what we have in the equity section, we've got the current year earnings that current year earnings. If we go into the next year, will roll into the retained earnings account, then we have the investments and the draws, which the zero set up a separate account for these never roll over. They never closed these out, so it will always just be there. These are always going to be the investments that you've entered over the lifetime of the company. If you always enter your investments, you putting money in will always just be in the equity section, and this will be draws that will always keep going. It's never closed. Announce to retained earnings. It's always gonna be increasing. So these are the stuff that you put into the company. This is the stuff you took out of the company. These air the earnings that are currently in the current year and will roll into an account called retained earnings over the life of the of the company. Obviously, this amount down here, too, and the investments we put a large amount in there for the beginning balance. When we set up when we set up the account which could be here or two retained earnings, no effect on the income statement because it went to draws. If we go to the bank reconciliation, once I update this, this number will then be tied out to what is on the balance sheet, which is the 1 66 5 99 13 And we will then no longer see the $100 for the draws. Let's go ahead and update that and see, hopefully if if I'm correct on that, I'm pretty confident. I'm pretty confident that's gonna happen. So there it is, and the 100 is now gone. So let's go back to the first tap. If we go back up top and look at the bank statement, the bank statements should have that $100 in there because we have that on the bank feeds. But now it's reconciled. If we go to the account transactions now, we've added an account and reconciled it at the same time. For that $100 there it is. That's gonna be it for now. Let's get out of here. 21. 440 1 Receive Payments On Invoice: in this presentation, and we're gonna record a received payment on an invoice with the use of bank feats. In other words, we see a deposit that's coming through with the bank feeds. We're gonna imagine how we would set that deposit up to tie into an invoice if we needed to go through the invoice in process. The invoicing process increasing the accounts receivable and increasing sales at the point of the invoice. The deposit then happening at some future point in time when the payment is received. Here we go. With zero, we are in our triple G dashboard. We're gonna be starting off by opening up, but I wear financial statements going to the account and drop down. We're gonna open up the balance sheet. Then we're gonna go back up top. We're gonna duplicate that tab right clicking on it and duplicate in it. We do need the income statement this time, so we're gonna go back to the first tab and we're gonna then open up the income statement going to the accounting drop down and on down to that income statement. Once that income statement opens up, we will be duplicated it by going to the tab up top mousing over it, right, clicking on it and duplicating that tab. Then we're gonna open up the reconciliation report back to the first tap to do so. Accounting dropped down. We're in the reports. That's gonna be the second item under the accounting drop down. We're gonna go down to the accounting section within it and choose the bank reconciliation summary report, bank reconciliation summary. Then I'm going to right click on that tab up top and duplicate that tab. Then we'll go back over to the balance sheet will be adjusting our dates now and we're going to select the eight. Drop down for the dates. Bring this on up to April. That's the month we're working in April 31st and update that report. Then we'll go to the income statement and check out those dates. I just want to change the beginning date down to the beginning of April, so we'll bring it out on up to the beginning of April and we don't have anything after April so we don't need to change the end date. Then we'll go to the bank reconciliation. We're gonna change the date here and we're gonna make that Teoh chase and make this as of April, the end of April as well The end of April and update that report. Then we're gonna go to the first tab, and we're gonna go to the accounting and drop down. We're gonna look for a banking information back to the bank account information, and we want to then be looking, of course, at these last four items that we have to reconcile. So these are the reconcile ing items that we will be considering at this time or now moving and shifting our attention. Teoh the deposit side of things. I'm gonna hold down control and screw up a little bit to get that 125%. So we're up that 125%. Now, we're gonna look at this first deposit. We're gonna assume that's from an invoice. So we got an invoice first and then the deposit to think about this. Let's look at our flow chart. We're gonna go back on over a flow chart. This is in the QuickBooks desktop, and we're just looking at it so we can see the flow chart here. So they got a nice little floater So it were in the customer section. Now last. The typical flow of the flow chart would be the long flow would be that we have an invoice that would increase accounts receivable, the other side recording sales at the point of the envoys. Then we would receive the payment. And then if we have to group that payment some way Teoh record the deposit, then we would basically record the deposit. Now, in the prior month, we said, How can we simplify this if we're on a ah system where we don't need accounts receivable? We don't need to invoice if we're in the type of industry where we don't have inventory or and we don't need to invoice, but we just need to record the deposits at the point of time. They clear the bank, then perfect system for the bank feeds on a cash basis. We could just, you know, not deal with all that. And just when we have the deposit at the end of the system, we just make the deposit. However, if we do need to track accounts receivable, if we need to enter the invoice, if I have to actually send an invoice to somebody and then wait for them to pay us. You know, when a track who owes us money question then is this is a non cash transaction. How can I fit that into our like processor? Because this needs to be tied out to the bank feet thing. That's gonna happen, which is going to be over here in terms of the deposit. So this is gonna be a deviation if we need to do that, we need to deviate in this point. This is one of the major points that many companies need to deviate so that we can tie the invoice that we need to make in order for us to do our billing process and track us who owes us money, do the deposit that we're going to see later, which we might wait to see it clear and then match up those two things once it clears the bank. The bank, which we'll see in the bank feeds. So let's think about first, we're gonna try this out, will say, Hey, what happens if we just make an invoice? Will we be able to tie that out to the deposit? So let's try that. We're gonna say. All right, let's pretend we had an invoice in the system. I'm gonna make an invoice in the system and see how we could then tie that out to this deposit that we have seen. This deposit should match up in a couple different ways. One way, at least by the dollar amount. That might be the only way. So that we have a dollar amount of 996 45. If we had an invoice that was outstanding for that, that same amount, then it might just take out one piece of data and be able to tie it out just based on that one thing. And so now what we're gonna do is we're gonna make an invoice and see if zero then picks up that invoice based on the deposit amount. Note that this would typically happen in the flu process. Before this clears the bank feet. We're imagining this one happened in the past. We would make an invoice that would then increase the accounts receivable. And then we'd have the deposit happening at a later time that we would match out to it. To do this, I'm gonna go back up top I'm gonna right click on the tab up top and make another duplicate of this so we can have another worksheet. Taps. I'm going to duplicate this tab. I'm gonna go back to the tap to the left. Then we're gonna make an invoice. I'm gonna go back up to this little plus button up top and we're gonna make an invoice. I'm gonna hit the drop down. More say invoice. Now we're gonna have a client. I'm just gonna add a client, Adam, I'm gonna add, not our employee. I'll just say Adam is gonna be our customer. I'm going to say that this happened. We could say, Let's keep this in the same month, Someone select the drop down states. It's happening in April 1st. So this is the invoice happening in April 1st that were later going to receive payment on its I'm gonna say the due date, I'll say, is Mase. Let's say that may 1st for the due date and now the items. Now, I'm not going to set up the inventory items. You could set up the inventory items here or service items that you would have. Ah, I'm not gonna go into the process of setting up items here. I just want to match out the invoice, and then I'm going to say that this is going to be one and I'm gonna say that I'm just gonna give the full amount, which is 996.45 And that's gonna be the folder out amount. Now, note that if you're dealing with sales tax, you could add the sales tax here when you do the invoice and record the sales tax on it. Obviously, if you have the sales tax, it would be included here. And then when you get payment, the payment would then include the sales tax portion that would be included in the price. Now, when we were when we record this, what's gonna happen? It's going to be increasing the accounts receivable because it's an invoice. The other side is going to be going Teoh the sales in our case, ah, revenue type of account of sales type of account. And if you had inventory and you were tracking inventory, it would also be recording the inventory account decreasing. However, we're not doing any inventory here. We're only recording the sales side of things with Thean voice. So I'm gonna go ahead and approve this and it wouldn't let me approve it. I need a description. They're gonna make me have a description, and then I need the other account, which is going to be a sales account. So I'm gonna put it to sales, which is like, the default income account, so I could put it to sales or I might want to put it to I think we've been putting him to merchandise so I could put it the merchandise, even though I'm not recording sales tax on it. And I'm not gonna recorded any sales tax because it's just kind of a practice problem here . If you had sales tax than you could apply that out, I just want the dollar amount to tie out. So then I'm going to say, approve and see if it looks made record at this time. There it is. We are successful. We're successful. We're gonna go into the balance sheet now. If I go up to the balance sheet and update that, then what's gonna happen now? We're gonna have on accounts receivable show up here and note I had mine on march, so you have to be up through April 30th to have the accounts receivable. So make sure you're on April 30th and then you've got the accounts receivable. So that's the A R. This is an accrual account. So this account isn't accrual accounting down on accrual basis on the income statement, the revenue is going to be recorded even though the cash hasn't been received a two point in time. We made the invoice, So now we're gonna say, OK, now I'm gonna wait until it clears the bank. So whatever payment we had, if we're collecting payments, were just gonna put those payments in the bank. We're not recording the receive payment. Then, as would typically be the next step, say, I'm not recording the receiving payment. I'm just gonna wait till the payment clears the bank and see if we can then match that out to the invoice. So to do that, let's go back to the reconciliation tab. Here we are. There's the 996 It's suggesting owner right now let's see if I refresh the screen. If it could pick up the dollar amount for the envoys, I'm gonna refresh the screen and you'll note that it did it here, right? So there's the 996 Here's the match. Now it's not going to create anymore. Says Hey, there's an invoice open that happens to be for that same dollar amount and again notice. That's the only thing. It's it's picking this up from its picking up the dollar amount to match it out. Says, Hey, there's an invoice. Here's the invoice. It looks like it matches out and this is true. This is actually the one we want here. If it were not the one we want, then of course, we could still go through our item Teoh to create a transaction. Or we confined the match by using the find item Over here. We'll talk about that in a future presentation. Now note. Even though it says match here, it's matching up to an invoice. So if I matched a deposit, which is on the bank side to an invoice, then it is matching it. It's matching the deposit to the invoice, but it's also going to be creating the deposit. What's that gonna do? It's gonna decrease the accounts receivable, and it's going to record the increase in the cash account so it is a matching transaction, but just be careful here because it's not like it's a matching a deposit. If it found another deposit and I was matching deposit to deposits, then it would just simply not duplicate the deposit would say, OK, that deposit is already made. This is matching a deposit to an invoice, which is saying, Hey, I'm tying this out to the invoice and recording a transaction that transaction decrease in the receivable and recording the amount to the bank account. So I'm gonna say OK and will record that out and check it out. We're gonna go to the balance sheet then and let's update the balance sheet and update. And then if we scroll back down, noticed the accounts receivable has now disappeared. So it's now gone because that we've received the payment on it. And then if we go into the checking account, we're going to see the deposit, the deposit that has been created from, you know, from that transaction and that deposit was for down here. Where is that deposit? It's gonna be that 996 45. Then if I go back then on the income statement, If we go into the income statement. We do have the income as recorded in the income statement. If I update the income statement, let's update the income statement. So there's the income being recorded. However, it's not being recorded with the deposit. It's being recorded at the point in time of the invoice. So just know there's a timing difference. If that invoice have been made like in the prior month and we didn't deposit it until this month, there would be no amount here in April, right? It would have been in March. So So this is here and you can see it. The receive payment item up top, and then we have the invoice. So this is being recorded by the invoice. If I go into this item, then you'll see the invoice of the transaction. That's when normally it would be recorded on an accrual basis, which is basically the default basis we will have for the accounting system going to go back, and then I'm gonna go back, and then I'm gonna go to the big reconciliation. So if we take a look at the bank reconciliation once I we do this this 16659 is gonna then change to what is on the balance sheet, which is now the 167595 58. So let's do that. And then what's gonna happen is that deposits gonna disappear. So I'm gonna update this and let's see if that is indeed what does happen. So 16759558 deposit disappears. Then we're gonna go back Teoh the bank reconciliation tab. And let's take a look at the bank statement within the bank statement. We already have this deposit in place because we we downloaded it from the bank. But now it should be reconciled. So this is gonna be a received money. So that receive money was that there it is. And it's reconciled. And then on the account transaction, we have added the transaction so again, it didn't match it in that emit as if the transaction was already there. It matched it to the invoice, and it created a transaction here for the deposits of the deposit there. This wasn't there before it matched it to the invoice. But now it's it's recorded as a deposit to the bank and, of course, reconciled at the same time. So next time you might say, Well, that works great. However, what happens if we, you know, have multiple deposits that we put into the bank from invoices that we that we have received? In other words, if we go to this flow chart, we had an invoice that we kind of just waited till the deposit cleared and then tied it out . What if I had a couple invoices that I've been grouped together and then deposited into the bank? Well, then it's gonna be more difficult to tie out to the invoice, so note. If you have the invoice, it would. It might be beneficial to record the received payment, then record the deposit in the format that you expect to be received on the bank statement . And then when you do the match, all you're doing is matching deposit to deposit. In other words, you'll basically be on a full accrual basis for the receivable cycle because otherwise and we'll take a look at this next time. If you have. If you have the invoice and then you wait for it to be deposited and you have a couple of deposits or a couple invoices you got money from a few different sources that you deposited in the bank at the same time, it's going to show up on the bank side as grouped together. And then you're gonna have to figure out which grouping is gonna tie out to the to the invoices. Gonna possibly have multiple invoices that resulted in that one deposit that's gonna make your reconciliation more difficult. So if that is the case, then you might be better off just doing the full service here and saying, OK, I'm going to record on invoice, then record the receive of payment on it, tracking the receivable, and then actually group the deposit, as I expect to be it to be seen on the bank statement. And then I could just match it out to the bank transactions to the bank feeds at the end of day. So we'll take a look at a situation where we have that problem where multiple invoices are going to result in one deposit. How we could match that out, But that's it for now. Let's get out of here 22. 440 2 One Deposit Two Invoices: in his presentation, we're gonna record one deposit that's related to two invoices using the bank feeds. In other words, we have a bank feed that came through, which is a deposit. And we need to tie that deposit to multiple invoices. Here we go with zero. Here we are in our triple G dashboard. We're gonna be opening up our financial statements, go into the accounting drop down on down that balance sheet. Once opened, we will duplicate by going to the tab up top, right, clicking on that tab and duplicating that tab. We're gonna go back to the tab and left through the same process for the income statement. So we're gonna go to the accounting drop down, go on down to that income statement. Then once that opens up, we will once again duplicate that report. Mousing over the tab up top, right, clicking on it and duplicating that tab. Then we're gonna open up the reconciliation report back to the first tab. Accounting dropped down. We want to go to the reports, which is the second item under the account and drop down. We're then going to go down to the accounting section and it's gonna be the second item in the accounting section Bank reconciliation summary. So we're gonna open that went up, then we're going to duplicate that tab, right? Clicking on the tab up tap to duplicate it. Then we'll go back on over the balance sheet. Let's check out our dates so you can get the dates. Correct. This time, if I can, I'm gonna go to the dates. I wanted to go up to April. We want to be in April this time. April 30th update. April 30th Income statement. I'm gonna leave the in date. I wanted the beginning date to be April 1st. So April 1st and then we don't have any data after the end of April, so that will be basically good. Will be good to go there. Then we're gonna go to the bank reconciliation. We want to be taken us from the checking account, of course. And the date once again being in April the 30th of it, and we'll update that back to the first tab. Now we're gonna be going to our county and drop down. We're gonna go on down to our bank accounts were gonna be considering our bank feed information were left down here with a little blue button with three remaining items. So we're gonna be working with those three items that will click on there so we can do so. Then I'm gonna hold down control, Zoom in just a bit by scrolling up on the scroll bar to get to that 1 to 5. That's where I like to be. Last time we entered the deposit, we tied it to an invoice. So remember our process. Let's go over to our flow chart over here. We're going to say All right, now we have to have invoices that we're gonna send the invoice. I want to send the invoice, so I'm gonna have to deviate from a complete cash basis method. So last time we created an invoice, and then we waited for the deposit toe happen through the bank feeds, and we're able to tie those two things up, creating a transaction which will take something which will record the deposit and remove the amount outstanding from the receivable which was created by the envoys. Now we're gonna think about a situation. Well, what if I made multiple invoices, then I received those payments. I got multiple payments. Then I went to the bank and deposited all those payments at one time. Well, what's gonna happen then? In the bank when it clears the bank, you're just going to see one deposit, and that's all that's gonna happen with multiple different amounts in it, and you're gonna have to. Then if you wait to tie it out to the bank feeds, you're gonna have to tie it out to multiple different invoices or whatever you put together to group in together. That one deposit, it would be more confusing still, if you had sales receipts, things that you receive, like in the store at the same time as well. So I'm gonna show you how you can match those things up. Using the bank feeds to the invoice. Multiple invoices, one deposit. However, if you're in that type of situation, you should seriously consider tracking doing the full process, create an invoice, then do the receive payment, possibly putting the money out of it. You take it out of the A R and put it into maybe even a clearing account at this point. Then take all the deposits you have and deposit them into the bank in such a way that they're going to show up in your books in the same grouping as they'll show up on the bank statement. Then once you do, the bank feeds. You already have it in your system as a deposit, and you could just simply match that up to what is given in the bank. So we'll take a look at that and a little bit more detail in another presentation after this one. But in case you still want to kind of match them up, we'll do the invoicing. Multiple invoices, one deposit. Try to tie them out. Let's take a look at it. So we're gonna go back over here, I'm gonna duplicate this tab again, and then we're gonna be working in creating invoices. I'm going to right click on this tab up top and I'm going to duplicate it. I'm gonna go back to the tab to the left. Now I'm gonna create two in voices that are gonna basically add up to the $17,000 deposit. Remember that this would happen at the beginning of our flow chart. This would happen first, right? And then we would have the deposits happening later that we would match up. Still, Just keep that in mind. So we're gonna go back up top. I'm gonna create another invoice. I'm gonna make an invoice here, and I'm just gonna make up the numbers. And I'm not going to be dealing with sales tax on the invoice as well. So we're going to say, Let's just make up a name here for the vendor is gonna say it was just put one letter C and then we're gonna put this as of, ah, say april 2nd this time. So it'll be in the same month. And then I'm gonna say the due date is gonna be may 2nd, and then I'm not gonna have an item. Will stay description. Just sales item. I'm not gonna put a description. That's something we're selling. And then I'm going to say that you the unit price, I'm going to say, Let's make this 10,000 and there we have it and it's going to the income account. So what's this going to do when we when we record it, it's going to the increasing the accounts receivable by that 10,000? The other side, then going to revenue account sales. Now we're not recording any sales tax. If we did, we did We deal with sales tax, which would be creating a liability regarding sales tax notes that if we were doing the full process in tracking inventory and this was an inventory item we sold, then we would also this item. If we had an item, it would be decreasing inventory recording, cost of goods sold. Even if you're dealing with inventory, however, you may want to just just not not record the inventory in the system and track that outside in something like an Excel worksheet and then do periodic adjustments as we talked about with the inventory side. So in that case, you wouldn't be reducing inventory with the invoice will just have a very simple and voice here. So then we're going to say approve. And then if we record that, what's gonna happen if it let's see if it it says it's okay, let's actually record the 2nd 12 at the same time. So I'm gonna do this again. I'm gonna go to the plus button. Ah, and then I'm going to say that we want another invoice and this one I'm going to say, Let's just make another 12 D this time for our customer, the capital, and will make this as of ah, April 2nd as well. And then the due date is going to be may 2nd. All right, and then the description. Once again, I'm just gonna say sales quantity one and this is gonna be 7000. So and that's gonna do the same thing. It's gonna increase the accounts receivable. The other side's gonna be going Teoh the revenue account. Let's approve that and see what happens. So we're going to say, All right, let's make sure it gives me a green. Okay? It's good It didn't do anything funny. No red marks here. So then, if I update the balance sheet, if I go on over to the bouncy what does that do to the balance sheet will now it increases the receivable in the balance sheet, says people OS money. If I was to see who owes us the money the age balance sheet report, it would be broken out by customer and then on the on the income statement we have. If I update the income statement, we're gonna have these sales already recorded the sales already recorded with the invoice, even though we haven't got the deposit at this time. So we're imagining here we're here in the process. We haven't got the deposit. What? We recorded the accounts receivable people owing us money. And we recorded the income. At this point, point time were imagining We're gonna receive payments now And we're just gonna wait till that payment hits the bank before we record anything in our system and that. So we're gonna wait till it hits the bank now. So Okay, so now we got a deposit. It hit the bank, and we're gonna match it. At that point in time to the invoice. Let's go back to the second tab where we have our bank feeds. There's that 17,000 right? But I have to invoices. So I'm gonna update this field and see if it's if zero is able to tie out that 17,000 to the two invoices that we have outstanding, which it may not be able to, because he's only got one thing to tie out to, and that's gonna be the amount. So last time it was able to do that. When I only had one invoice for the exact same amount, but this time I have to invoices. So I'm not really expecting it to pick that one up. Maybe, but I'm not expecting it. So go ahead and refresh the screen, see what it does. So no, it didn't pick it up right? And that's to be expected, right? Had it only has a dollar amount. So now we're going to say, Well, I know there's a couple in voices that make up this deposit, So let me think if I can find them. So you have this find area over here so we can go into the find items and then I can say, Oh, there's these two that happen to add up Teoh the 17,000 now note. In this case, it's not too difficult. You could say I can set this up. This isn't too difficult. But if you have a lot of invoices that match up to the deposit, or if you have invoices and sales receipts that are happening in the store, this will get kind of complicated. You know, if you have three or more that you have to add up, it'll get complicated. So if this is something that's a problem, that it's gonna cause a problem. What you want to do is maybe create a clearing account and then put that information into the clearing account. When you win, you receive the payment actually recorded into the system, and then you'll record a deposit. So so, in other words, you have an invoice accounts receivable, goes up the other side of sales. Then you record received inventory, and you're gonna record that into a clearing account, a cash account that's a clearing account and the other side reducing the accounts receivable. Then, when you record it to the bank, group it in the same format that it will appear on the bank statement, and then when you have the bank feeds, all you have to do is match it up to the deposit you already put in the system. So that's what I would recommend if things get. If things get a little bit more complicated, is about the highest level of complication you would want without without doing that full system. So then, of course, we can select these two and say, Look, those to add up to that number. It says Ah, there's a match. So now we have the match. So now we have these two in voices that are gonna match out. So now we're kind of in the same spot we were in the prior presentation. Except now we have two invoices. So what's gonna happen here? Remember, it's not exactly the same thing as a match as if it Or is it the deposit was there. If we had a deposit for 17,000 it would match up the deposit and it wouldn't record anything new. It would say, Hey, look, this deposits already been recorded here. It's saying, you know, we matched it up to the invoice, which means that you have an invoice that ties out. We're gonna match it out. But we're also gonna make a new transaction, that new transaction being the deposit on our side of the books 17,000 and the other side decreasing the accounts receivable. So we are recording a transaction when we do this match process. So I'm gonna go ahead and record that. Let's see what happens. We're going to say, Then let's go back to the balance sheet. And when I update the balance sheet, this a R accounts receivable should disappear and in the cash will be going up going up right s. So we're going to say, Let's update that and see if that is indeed the case. The cash went up. Accounts receivable is gone because now we've received payment on it. If we go to the income statement, there's nothing new happened to the income statement. Why? Because inventory already was recorded or I'm sorry. Inventory revenues. Sales income was already recorded when we did the invoice. Not when we got the deposit. So it's already in there. And if it was in the prior month, then we would have recorded a revenue in the prior month on an accrual basis. Because we're running an accrual basis for revenue cycle now and then on the bank reconciliation. What's gonna happen? This 1 67 5 95 is going to match what's on the balance sheet. 1 84 595 80 58 And then this 17 thousands gonna go away. Let's update that Check it out. So we'll update that one scroll on down. There's the 184595 and no more 17,000. Then we're gonna go to the bank. Reconciliation. Go back up top to this tab. And the bank statements if we go to look at the statements to 17,000 was already included when we, you know, updated the bank feeds. But now it should be reconciled. So we have the 17,000 now reconciled. So that is good. If we go back up top and look at the transaction or account transactions, we have now included and accounts transaction for that 17,000 and reconciled it at the same time. So remember, although you use that match feature, this is a new transaction that was included. We recorded the transaction when we matched out the invoice. That transaction increase in the checking account decrease in accounts receivable. So that's it for now. Let's get out of here. 23. 455 Sales Receipt & Bank Feeds: in this presentation, we're gonna record and match up a sales receipt and a deposit with the use and help of bank feeds. Here we go. With zero. We are in our triple G company Dashboard. We're gonna be starting off by opening up the financial statements. Accounting drop down, down to the balance sheet. Once that opens, we're gonna go up top, right? Click on that tab up top, duplicating that tab back over to the first tap gonna be opened up the income statement. Accounting dropped down down to our income statement. The other financial statement report we open up quite often. Then we're gonna go back up top, right click on that tab and duplicate that tab. Then we're gonna open up our bank reconciliation report. We're gonna go back to the first half, go to the accounts and drop down, then go on down to that reports. Then we're gonna go down to the accounting section and we want to be opening up the bank reconciliation summary. Then we'll right click on the tab up top and duplicate that's tab back to the 1st 1 the balance sheet and updating the date. So I'm gonna bring up the date were working in the month of April. So let's bring that on up to the month of April so that we're have the report reflecting what we're working on their We have that income statement. I'm just gonna change the beginning date. Teoh April 1st. Because the Indian Day we don't have anything after April. So we're okay, which is changing the beginning date. April 1st, and we'll update that information. Then we'll go on over to the bank reconciliation. We're gonna be working. Of course, with the checking account here, that's the only bank account we have. And the day it's gonna go up Teoh April as well. April 30th will update that information as well. Let's go up to the first tab now and then we're gonna go to the accounting drop down. We're finally gonna make it into our bake accounts where we have some reconcile ing items were only down to the last two. We're gonna take a look at those last two, so we'll open that went up to see what they have in them. Then once there, I'm gonna hold down control and screw up just a bit to get up that 125% up to the 125 That's where we like to be. So now we have another deposit here, so we've got another deposit. We want to consider it. Let's take a look at another type of method that we might to be using with regards to the deposit side of things. Let's go back to our flow chart Over here. We've got our flow chart. This is in QuickBooks desktop. We're just looking at the flow chart for it, though we considered the full process of having an invoice and tracking the receivable. What if we basically have a store and we're just going to collect things basically in her store? We got the cash register and we could have sales receipts then, and we're gonna take those sales receipts and then simply deposit them into the bank. If that's the case, if you have the sales receipts, there's kind of two ways that you could do it where imagining we're in our store in our in our case, or get great guitar store people are just bring in the guitars up or doing whatever they do , and we're making sales at that point in time and collecting the cash, we could imagine cashing the check rich and in the drawer at this point in time. Then we're gonna make the deposit at the end of the day all the cash that we receive. So there's two ways you could do this. You can create a sales receipt, and then every time you get money, you can debit. You can you can increase the checking account and the other side go into sales at the point in time. You make the sale now and we'll show that. But there's a problem with that. And that is the fact that if you do that like, if you're imagining that you get cash all day long and you're and you're making sales and you get cash and you record them into the checking account as you make the sales with this form, then you can imagine you can have, like, 10 to 100 sales, just depending on what types of things that you sell. And then when you when you reconciled to the bank like when you deposited into the bank, you're gonna deposit all that cash in one lump sum, you're not gonna make five different you know, 100 different deposits for different cash receipts that you had. And that means that when you go to the bank, it's gonna be showing on the bank statement as one lump sum. So then, when you tie out your books to the bank, it's gonna have 100 transactions here and one transaction there. That's not gonna be easy to reconcile. So So what you want to do then, under that scenario is when you're in the store, you increased sales and possibly take it into a clearing account such as another cash account, cultures cache, clearing account or something like that. Then you go to the to the bank at the end of the day, and you record the deposit transfer in it from the clearing accounts to the checking account in the same format as the deposits that you're putting into the bank. That way, when the bank feed comes through, it'll it'll match up to the amount that's in the deposit will be really easy to do the reconciliation process. So just be aware of that. Now we're going to say, Well, what if we didn't do that? What if we just said, I'm gonna create the sales receipts, and I would have multiple sales receipts that are gonna tie out to the deposit that we made at the end of the day might be possible as long as you only have a few different sales receipts. If you're still in, like, 100 things and then you get deposited at the end of the day, I wouldn't recommend it. You may be able to do it because you could have daily deposits and matched up, but I wouldn't recommend it. If you only have like a couple sales receipts like you still a couple of big ticket items or something like that and and you know you have two or three sales in the day and you have to match that up to the deposit on deposits grouped together, then maybe you could just deposit those three sales directly into the bank. And then when it clears the bank, you can match it up to that to the bank feed, which will only show one deposit and you can matched up to the three over here. If it gets any more than three or something like that per day, I would I would not do that. I go through the clearing account, possibly and make sure that you deposited in the system in the same format. It'll show up in the banks statement, and that'll make things easier. Okay, so let's see how this would work, then. Gonna go back over here. We're going to say I'm gonna create a sales receipt and imagine we're back in time. Now we're imagining that that we are. We're gonna make the sales receipt as if someone's coming into the store making a sale. And then we went at the end of the day and made the deposit, which then cleared the bank. And now we're gonna match that when we cleared the bank. So we're going back in time to when we made the sales receipt. So once again, I'm gonna duplicate this tab, going to right click on this town and duplicate this tab, and then we can work. I'm gonna work on the tab to the left so we'll work on this tap. I'm gonna go back up top. I'm gonna hit the plus button, and we're going to say we have a received money. So we're going to say that we're receiving money cause we're imagining we're making a sale basically in our store, and it's gonna be from the checking accounts, I'm gonna say in the checking account, and then I'm gonna hold control and scroll down just a little bit. So we're at, like, the 1 10 Think it's easier to see. And then let's say we're on E now for our customers. So customer E comes in and we'll say this happened on it would be the current month of Ah, April. That's 1/3. And I'm just gonna put a sale here for the description. So we still we sold something this time Not an invoice, but into the store and the amount Let's say it costs 1000. The other side's gonna be going Teoh the we're gonna take it the merchandise sales again. And I'm not gonna record sales tax. Same story here. You could record sales tax at this point in time as well. I'm not. And if you did that, it would increase the sales tax union, calculate that I'm not gonna do it for the purposes of our practice problem. What's gonna happen when we record this? It's going to deposit it into our checking account, right? It's gonna go because I had to go right into the checking account rather than putting it to a clearing account. So it's gonna go into the checking account even though we haven't. So we're not waiting, in other words, till the bank feed happens, and then we're gonna have to match up what we put into the checking account on our books to what happens on the bank. So and then the other side's gonna go toe to sales to revenue. So let's say add, I'm gonna say add and make another one. So we're gonna have two of these items. And so this one, I'm going to say this is Teoh f our customer. And once again, I'm gonna say this happens in April so I'll say April 3rd again, and I'm just gonna call it a sale. And we're going to say this is for 1017.5, because that will tie out to our 17 2050 with which is the total deposit that we have. This is going to go to merchandise sales once again. No tax, same same concept. What's gonna happen? It's going to increase our checking account even though it hasn't. We haven't matched it to the bank feed yet. And and then it's going. The other side's gonna go to revenues who are making sales in the store. Let's go ahead and save this and see what happens. So we'll see if I did anything wrong. Gift? Nope. It's a green green thing. A top. I did it right. I knew I would Like I'm surprised. Here, do anything wrong. So I'm gonna go up top, and then we're gonna update the balance sheets. I'm in the balance sheet now. What's gonna happen? We're gonna have those two deposits. So if I go into the checking account, we're gonna have to Deposits that are are generated, not from the bank feeds there on our books side of things now. So we recorded these directly into the bank, and this happened on April April 3rd. So here they are. So we recorded these two in the system increasing the checking account. I'm gonna go back and then on the income statement we recorded, the revenue here happened at the point of time that we made the sale. So if I update this we have the merchandise, revenue is gonna go up. The merchandise is gonna go up here so we'll scroll back down and say that we have this increase for these two sales. So these air sales, not invoices this time, but the sales receipts All right, let's go back over. And then if I go Teoh the bank reconciliation tab, you'll note that these this time these these items are are not on the bank statement as they as they are showing here. They're not on the bank statement side. There are gonna be on the account trans transactions side. So in the account transaction side, we're gonna have these items. Now we have the transaction. That's the first time that's happened cause we're making transactions on our books before they before they clear the bank with regards to cash. So here they are. We deposited these items in the bank without relying on the bank transactions, and now we need to match these items up to what happened on the bank, which would be a more of a full service accounting cycle. So we're kind of mawr on a full service cycle here with regards to the deposits using this method. So I'm gonna go back to the first tab now, and we have the two items to reconcile. Now, notice here if I update this tab as we are, The thing is that those two, those two deposits add up to that 2047 50 and is zero finding that can zero find it? No, it can't find it because there's two deposits. It can't it couldn't figure it out. So this isn't matching it up automatically for us. So that means that in this case, then if we're making deposits into our accounting system in a format different than the way they will show up on the bank, then we're gonna have to go in here. And every time we have a deposit, we're gonna have to say Okay, now I have to match it out to the deposits I made on my books in some way that works so again, you want to kind of avoid that unless it's very simple to do that and you avoid it by by basically using that clearing accounts. In this case, we're going to say it's not too bad, and I got two of them that should tie out. So I'm gonna open this up. There's the two accounts. I'm going to say those with ones. If I add those two up, then those are going to tie out again. You can imagine here, if you have, like, you know, 50 of these down here. And you're trying to, you know, check these off to tie out to this amount. It's not worth your time. It would be easier to set up a better system so that they so that your system matches to what's on the bank statement. But if you don't have a few different deposits than this isn't too bad of a process to do so So once done, we can then say, Okay, there they are. We matched them out. Actually, they're not matching out here because this is 1017. They need to be this one. I'm gonna change this so there's not matching out. Exactly. So I'm gonna undo this. I'm gonna undo this, and I'm gonna adjust one of our invoices. So to do that, I'm gonna go back to the income statement, and then I'm going to go into the merchandise. I'm gonna find that invoice and adjusted to the invoices in there for the wrong amount. So then and it's actually not an invoice. This is the sales receipts. So we have a sales receipt in there for the wrong amount. I'm gonna just this one to the proper to amounts little match out in our practice problems . They're gonna match this up, gonna open that one up. I'm gonna go to the options up top, and I'm going to edit this one. So I'm gonna edit the transaction, and I think to match this up, this one needs to be Let's see, 1047.5. Not sure where I got that other number from. So then I'm gonna update this. And now those two those two deposits that we made should tie out to what is on the, uh, on the bank statement. So if I go back over here and I refresh the screen, I'm going to say, let's refresh this, and then I scroll back down. Let's see if it works now. Okay. So again, we got that 2047. I'm gonna find a match and see if we could find the match and they have to match out basically exactly e. I mean, they should match Outworld something, you know, something went rolling, and then we tied them out, and now it's given me that basically okay and saying Hey, yeah, those two match out. So now when we record this note, this is different than when we have the invoice. This is different than an invoice because we already entered the deposit. We enter the deposit as like a sales receipt as a transaction that happened in the same time. So this is like a matching system, which is saying it is matching, but it's not matching to an invoice. It's not recording any transaction. It's. And you've actually made two deposits that match up to this one. So no new transaction is going to really it's gonna happen here. It's already been recorded. We're just matching up this deposit to what's already been recorded in the books. So I'm gonna say OK, and so there we have that. Let's see what happens if we go on up to the balance sheet and I refresh the balance sheet . No new transaction is gonna happen here, So all we did was match it up. So if I go back into the checking account. It's not gonna add anything new. We're still gonna have those two transactions that took place that we just simply matched out to that one deposit. So if we go down here and look at our detail, we're going to see in April we've got Thies to receive money so the to receive monies air still there. We don't see any amount for that 2047 50 which was the amount that shows up on the bank statement because nothing new happened. There's not we're not going to duplicate the deposit. Always said when we when we matched it up with saying, Hey, we already have that recorded. It's already done and we matched out. Nothing new is going on here, so if I go back, the same thing would be true for the income statement, nothing new is gonna happen. The income statement, you know, is where it is. If I go, then Teoh the bank reconciliation report and I refresh the bank reconciliation report than this 1 84 5 95 should be the same as the 1 86 6 43 So let's go ahead and do that so I'm gonna say update and this one will disappear. So there's the 1 86 6 43 and now we're down to just one outstanding transaction. Then if I go to the bank reconciliation and we have one outstanding transaction, the bank statement, then if I go to the data on the bank statements side of things, we're going to see the bank statement side of things having that 2047 it's of the 2047 is here. It's now reconciled. It's reconciled to the book side of Things, which only had, which has two transactions that add up to that 2047. And that would be the the 1047 the 1000 here, both having been reconciled. So these two were already on the books. They were unreconciled before Now. We reconciled them out these two items to the one deposit that happened on the bank statement side of things. That's it for now. Let's get out of here