and I guess you are starting to use
QuickBooks Online or thinking about
setting yourself up in QuickBooks Online
now this video will walk you through the
entire account creation setup setup up a
new account I'll explain some of the
different options we'll talk about doing
the initial configuration and
preferences based on your industry and
then we'll do a couple of exercises on
transactions like downloading
transactions from the bank creating
invoices where I can sell in the bank
and pulling financial statements if you
already have a QuickBooks Online account
setup you can fast-forward to the minute
and seconds below to skip the entire new
account setup process however if you're
starting from scratch from zero I
recommend you watch the entire video so
I can walk you through setting up the
account and also choosing the right
version of QuickBooks Online does for
you alright the first thing I recommend
is you need to use Google Chrome as your
browser
don't use Firefox don't use Safari don't
use internet explorer quickbooks online
was actually designed to work best and
optimized in google chrome and i'm
through this video i'll explain some of
the specific google chrome features that
work best for quickbooks online the
first thing i'm gonna recommend is
you're gonna click on the top right of
your google chrome browser and that may
say person 1 or it may say your name in
it or it may say something else but you
want to click on that button and then
click on where it says manage people
basically what we're gonna do is we're
going to create a user exclusively for
quickbooks online so all the Preferences
bookmarks passwords everything we do is
only on that user so we're gonna click
on add person on the bottom right then
we're gonna call this one
qbo user you can call it whatever you
want I'm calling in qbo user and I'll
use this Whitehead over here and click
on save okay so perfect I got my Google
Chrome user called qbo user which is
designed just for quickbooks online and
i recommend that you do your browsing
and another chrome user and use
quickbooks online on this one this will
also keep your quickbooks online safest
and on the logins and fastest because
QuickBooks Online intends to do a couple
of security checks and if you do a lot
of logins and log outs of other websites
QuickBooks Online tends to be a little
bit slower to log in so if you have a
dedicated chrome user for that you will
see you will notice it will thank me
later it is the best possible thing but
the first thing I'm gonna recommend is
if you don't have an account yet is to
create an account using my link so my
link is Hector Garcia comm /qb
and once you go to Hector Garcia comm
for /qb it will forward you to
QuickBooks as purchase page now my link
will give you a 30-day free trial and it
will also give you a 50% discount if you
sign up for the first year is the only
link that I know that can do that so I
would definitely recommend that if
you're gonna get QuickBooks Online
anyway now once you get to this page it
will ask you for three choices do you
want to go with QuickBooks Online simple
start which is basically just for
invoicing and banking and to have one
user working on QuickBooks
simultaneously then you have QuickBooks
essentials which is this middle option
that allows you to have three users
working simultaneously plus two
accountants and this will allow you to
track invoices bills and recurring
transactions which is a really valuable
piece of of managing your books and
lastly if you want to track inventory
budgets job costing class location
tracking and issued 1099 to contractors
all those features are going to be
inside of the plus Edition which also
allows you to have five users working
simultaneously so let's go ahead and
choose the Edition that we're going to
go with most people go with essentials
and we'll click on start free trial then
it's gonna ask you to enter an email
phone number and password and then click
on sign up with email and then it will
create the account and get you started
with the setup
next question is what is the name of
your business so I'm going to call this
Hector's computer shop okay I know you
put LOC Corp whatever it happens to be
then it's gonna ask you how long have
you been in business and this is only
really contextual for QuickBooks to then
guide you on whether or not you should
be bringing all the opening balance
is because your business has been open
for more than a year and making the
assumption that you do have a tax return
or some sort of financial statements for
the previous year and you're setting up
QuickBooks and you may want to bring
that old data in there somehow so by
putting the number of years QuickBooks
may guide you to that process I'm gonna
put here that we've been in business for
three years and then there's a little
check mark that says I've been using
QuickBooks desktop should quickbooks
online walk me to that process so if you
do have QuickBooks desktop and you want
it to walk you to the process of getting
the data from QuickBooks desktop into
quickbooks online you will hit that
check mark for this particular video
we're gonna skip that piece you know
take a look at my channel for other
videos about desktop to online
conversion we're gonna start brand new
from scratch in quickbooks online so
we're gonna go ahead and click on next
and then it's asking you what would you
like to do in quickbooks and really this
is only for quickbooks to then send you
some help or some pop-ups of videos and
articles and how to do any of these
things like creating invoices I like to
skip them just because I know how to use
QuickBooks really well and if you're
watching this video you don't need
QuickBooks to keep walking you through
the process in this video we'll cover
all these things so we're gonna click on
all asset and the first thing you will
notice you will notice up here where it
says you have a 30-day trial you can
click on subscribe now once you're ready
to put your credit card and and and move
forward with the account but you got a
whole 30 days you don't even have to
touch that piece where you can use
QuickBooks Online now when you first set
up QuickBooks Online there's absolutely
nothing in there there's no customers no
vendors no accounts nothing so in order
to do that we're gonna have to go and
create that database of customers
vendors account items and products but
the first thing we're gonna do is we're
going to go through the preferences I
think it's very important to go through
their account settings and preferences
to kind of get an idea for what the
capabilities of QuickBooks are so we're
gonna click on the gear button which is
the little gear icon on the top right
and then we're gonna click on where it
says account and settings so I am
recommending that that's the first place
you go and on their accountant settings
we can change the legal name of the camp
we can put the tax ID we can click on
this little pencil icon on the right to
edit and we can say okay we are kerb our
LLC it's a partnership and we can put
here our industry so let's say we are in
the computer industry so we can put
computer and then we're gonna get all
these different options so I'm gonna put
here computer system designs and related
so I'll click on that and then I click
on save and this also allows QuickBooks
to kind of know in which direction to go
with the setup and you'll see us as we
go you can add more things like your
website your phone number your company
address all that stuff is really
relevant logo for invoicing what will go
back to that now under building a
subscription that's really when we we
can cancel our free trial we can upgrade
to the Plus version if you wanted a
little bit more features and we can
click on subscribe to enable payroll and
we'll talk more about payroll a little
bit later on for now this is just where
you see your account settings and your
company ID over here which is extremely
important and valuable if you call
QuickBooks Online tech support the
fastest way for them to know what
company they're talking about is that
company ID so when tech support calls
you when you call them and say hey I
need any help with this I'm having
issues with this give them that company
ID and I'll go straight to your account
let's click on sales and see what's in
sales and the first couple of things I
recommend is customizing your invoice
because that's pretty much the number
one reason why people get QuickBooks
Online is to create a new invoice so
we're gonna click on customize
look-and-feel
and from here we're gonna click on
either edit the current style which is
basically the template or we can create
new ones let's just click on the the one
that's default and then we can do a
couple of things we can add a unique
logo so I can click on add logo and I'm
gonna go ahead and look for my company
logo here and there it is I click on
open and I will bring the logo in there
what's really cool about it is once you
bring the logo in there
QuickBooks assumes that the color scheme
from your logo is the same color scheme
for your invoices and I'll detect the
colors on that logo and
that in you can also click on splash
some color and you can change the color
scheme if you want to you can click on
the funds and you can change the font
size or the font style if you want if
you want bigger or a smaller fund that
top that type of thing let's not get too
deep into the invoice configuration I
think adding a logo and the colors is
pretty much the best way to get started
so we're gonna click on done and that
will be what we done with that so that's
great we mean believe it or not we are
very very far ahead on our setup let's
go back on accountant settings and let's
go through the other settings so I'm
gonna click on sales and let's take a
look at what we have here so we have
preferred invoice terms so basically
they're asking you when you create an
invoice how many days do you want to
give your customer until they pay you
before they're officially laid before
you charge you my late fee now you may
not give any client credit you may want
them to pay you immediately then in that
case you click on doing receipt and
every single invoice that will be the
default option or you can leave it a net
30 which is what's there already
now preferred delivery method is whether
or not when you create a new invoice if
you want QuickBooks to queue up a print
list for me to print the invoices and
mail them all in batch or if I want to
queue up the email list because what I
want to really do it's email my client
invoice which in the year 2018 strongly
recommend that you do that now you can
turn on shipping which basically adds a
little box for shipping so you can add
some shipping options you can add some
custom fields if you want to record
additional information about the sale
with your customers you can click on
custom transaction numbers that's
actually crucial custom transaction
numbers means that instead of QuickBooks
controlling the invoice numbers you can
override and put whatever number you
want for the invoice number typically I
like to click on custom first I pick a
big number or whatever number and one
you know ten thousand and one and then
turn it off and let QuickBooks follow
its own numerical process you can add
service state for example if you want to
record in your QuickBooks
the work separate than when you're
invoicing and other things like this
kind of deposit we'll skip them for now
so we'll click on save here then we got
on their products and services it says
what you like to show a column for the
products and services you want to show
the actual item that you're selling your
customer this could be a product or a
service I absolutely like that I you
know I work with items all the time I
will explain what that is and that's
open by default and also quantity and
price and rate that's also enabled and
again if you don't work with quantities
and price and you just work with totals
then you would just unclick that but I
work with rate and quantity so I'm gonna
enable that and those are pretty much
the default settings I'll click on save
everything else in there you can explore
but it's not really that important I'm
gonna click on expenses and the only
option you really have here is the
default payment terms this is you know
how many days to your vendors give you
to pay them similar than than the
invoicing I'm gonna leave in a net 30
however you can change them in a vendor
to vendor scenario and then from here
you can turn on purchase orders but you
will have to upgrade to that plus
version or quick QuickBooks Online we're
gonna stay on the essentials version I
will do the walkthrough on that and then
we'll once we're finished with that then
we're gonna go and upgrade the plus and
then talk about the things that are in
plus not on their payments that's for
you to enable the special service that
QuickBooks has to give you the capacity
to receive payments online to receive
credit card payments online so if you
want that you would have to go to this
process click on learn more you have to
put your as the owner you have to put a
social security number your social
security number you have to put the ein
the tax ID from the business and you
have to get approved now most people get
approved unless they have some real big
issues with their credit they get
approved and within a couple of days you
can start charging your customers I'm
gonna weigh the credit card which is
awesome and you get paid within a couple
of days which is great and then under
advanced we got a couple of really
interesting things again crucial to the
setup process you know are you a January
through December
of company or do you have a different
fiscal year some companies or you lied
through June you know they don't follow
the fiscal the calendar year scenario
I'm gonna start I'm gonna do January as
the example but if this is a place what
you want to change that this would be
the place to change it now accounting
method it tells you accrual or cash
what's really cool about QuickBooks is
it lets you swap back and forth so
you're not really stuck with one method
and this really has to do with like the
way you file your taxes most small
businesses do cash they file taxes on
cash basis however because QuickBooks
allows you to swap back and forth I
actually wouldn't select cash even if my
tax return is on cash I will follow the
accrual method and that's because you
want to manage your books in a cruel and
because you want to know what's going on
in terms of who owns your money and who
you are money to regardless of how you
file your taxes you can always switch it
for the reporting purposes but you want
by default manage it in a cooler basis
and here's a place where you can close
your books which is really just relevant
to when you have your year closed your
tax return file and you want to block
those books so anything from the year
pass people can't really change it
including yourself protect yourself from
having your QuickBooks be different than
your tax return then we're gonna go to
tax form and we already kind of change
that we told it what tax form it is and
obviously talk to your accountant if you
don't know what tax form your business
uses and if you don't have an accountant
you got my email you can call me I'm
taking your clients all the time
especially if you use QuickBooks Online
I like working with clients I use
QuickBooks Online but your accountant or
the help the person will help you set up
the company in the first place should
know what form your business should
follow for taxes ok let's see what we
got here chart of accounts enable
account numbers you don't have to use
account numbers but I certainly like
using them that's to give your chart of
accounts numbers as well as names so
we're gonna turn that on here I like
using that but you don't have to and
you'll see what that looks like when I
set that up let me click on save let's
take a look at automate
so we have prefilled forms with
previously entered content I like this
option because when you create a bill
for let's say for Time Warner Comcast
and you classify it as utilities the
second time next time you create a bill
for the same vendor it's gonna suggest
the exact same account
the only drawback with that option is
that it also suggests the same dollar
amount and if you're not careful you may
by mistake start accepting transactions
without really looking at that dollar
amount so I I'm going to leave that on
but just be extra careful to make sure
you're always putting the correct dollar
amounts and then we got this option here
called copy estimates to invoices that's
a crucial feature because I create a lot
of estimates and once my customers or
potential customers accept that estimate
I want to just copy that estimate into
an invoice so I don't have to recreate
the transaction over again so definitely
turn that one on and click on save and
then let's see what else we got time
tracking I'd feel service to timesheets
won't worry about that for a minute
we'll talk about that more on the plus
side where we talk about job costing and
timesheets
make single time activity billable to
customer let's turn that on for now
leave that on we don't need to mess with
that we'll talk more about the job
costing and the billable time much later
on as we get deeper into QuickBooks and
then everything else is pretty much
standard you know you're using multi
currency what's your home dollar I mean
home currency which is mostly dollar and
then you know what's the date format
number format
oh this was good customer labels how do
you call your customers what do you call
your customers so if you think it's
easier for you to call your customers
clients or call your customers donors
because you're a non-profit maybe or
call your customers members or call your
customers patients tenants or guests
just to make it easier so when you're
clicking on things in QuickBooks it's
using your terminology you certainly may
do that I'm gonna put clients cuz I call
my customers clients click Save and then
click done and that's and that's it for
the for the overall look at the settings
and I know that was a very long time to
get to the software but you know when
you have your QuickBooks set up
correctly your
experience is going to be much much
better now the very next thing is gonna
be your chart of accounts so to get to
the chart of accounts we're gonna click
on the gear menu up here in the top
right then we're gonna click on chart of
accounts now in the chart of accounts
you're gonna see what QuickBooks set up
for you at the beginning now this is
gonna be a very basic chart of accounts
it's gonna be very generic it may or may
not contain all the accounts that you
need actually for sure it won't contain
all the accounts because you have to
create your bank account your credit
card account your loans all of that
stuff so these are split into two
categories you're gonna see all the
accounts that have what's called a
running balance or a QuickBooks balance
so you will notice that there are some
accounts that have a dollar amount
associated with it at the moment it's a
zero but all the things I have a dollar
amount associated with it that they have
a QuickBooks balance or iranian balance
these are called balance sheet accounts
balance sheet accounts are those
categories you know those accounts those
categories of value that are going to be
in your balance sheet which is one of
your two primary financial reports and
then anything under that they're gonna
be profit and loss or income statement
accounts and these accounts will put
together your profit and loss report or
your income statement report that
represents your sales your cost your
expenses and your bottom line how
profitable you were in your business you
will notice that all the profit and loss
accounts have a run report button on the
right side and then all the balance
sheet accounts have a view register
button on the right side that's a also
sort of another way to know whether it's
a balance sheet account or a profit and
loss account let's start by creating our
bank account so we're gonna click on the
top right we're gonna click on new your
sell a drop down menu for import if you
happen to have a chart of accounts in
Excel you can do that we're not gonna go
through that in this particular video
but you could import them from Excel or
of course if you're coming in from
QuickBooks desktop is going to bring
that chart
comes with it but if you're starting
from scratch you can have to create all
these accounts one by one so we're gonna
click on new on the top right and we're
gonna start with our bank account so
we're gonna click on bank and then I
normally like to name this the name of
the issuing bank and then the last for
the use of the account number so we're
gonna call this one chase I'm gonna call
it Chase checking and I'll put the last
four digits 1 1 2 2 so that's the last
four digits of my bank account number
not my debit card my bank account number
and then here's a number that's actually
the account number itself we'll get to
that later on I'm gonna skip putting a
number there for now you don't have to
put anything there we'll just put here
chase checking 1 1 2 2 we'll leave it as
that
now let's start let's assume I'm setting
up my click books file for the first
time in the year 2018 and I do want to
bring an entire year's worth of data so
when I close 2018 I have a four year so
I can do my tax returns and have four
years worth of accounting but if I have
an account existing from before I had a
running balance from before I gotta go
get the bank statement that closed on
1231 2017 and I have to write down that
ending balance in QuickBooks in order
for that balance to come in correctly so
I'm on the balance I'm gonna put
whatever that opening balance is so
let's start by setting up the bank so
we're gonna click on a new on the top
right and we're gonna select bank as our
option so we're gonna click on bank and
there's a couple of options here under
detail type for the most part I don't
get too stressed out about these if you
get this wrong it's not gonna be a
problem but QuickBooks does force you to
select one of these so we're gonna
select checking and then we're gonna
give this a name we're gonna call this
Chase checking just make it all caps
I'll probably be better so chase
checking and we'll give this last four
integers of the account it's really
important to bring in the last four
digits of the account especially if you
have multiple accounts
going on then on their balance we're
gonna literally grab the bank statement
from the closing period from 1231 2017
and we're gonna bring that in because
then we're gonna actually do the
accounting and QuickBooks for all of
2018 so we're gonna open up the actual
bank statement so I open the actual bank
statement that I happen to have in my
computer you may have it printed that's
totally okay and we're noticing here
that it is for the ending of the year
and we're also gonna copy that ending
balance obviously different banks have
different ways of showing those bank
statements so we put in the ending
balance without the dollar sign and
we'll put here 1231 2017 and then we
click on save and close and and that's
how we added our bank account now let's
add all of our bank accounts if we
happen to have multiple bank accounts
multiple banks you want to bring all the
stuff in with its beginning balance
let's now bring your credit card so I'm
gonna click on new on the category type
I'm gonna go down to credit card and
then under credit card type there isn't
any other option so we'll leave that
there I will call this one change visa
and also put the last four digits of the
credit card and we're gonna go to
balance bring that balance over let me
pull up my credit card balance okay and
it looks that for this particular
statement that closed on 12:26 2017
which is the closest statement I have
for the ending of the year the balance
is seven thousand and change here so I'm
going to take that balance and put that
on that that credit card that we're
creating so bring that in I'm gonna
paste that in there if I happen to copy
and paste from another file or you just
hand kid this one was twelve twenty six
2017 and we'll go ahead and click on
save close and there we go we got our
bank we got a credit card let me add a
loan and I also happen to have a loan
with that Bank so I'm gonna click on new
and for a loan I'm gonna click category
type click on the drop down and select
long-term liability this particular loan
is payable in five years so it's gonna
be
time but if you have anything that's
line of credit or something that's
payable within the year then you want to
pick current as basically the current is
we're gonna pay it off within the year
and long-term it's gonna take us more
than a year to pay that off so I'll pick
a long time and then we'll call this one
let me see what we got here
let's call it a note payable that's
right we'll call this one chase loan
five year we'll call it that and then
the unpaid balance for that loan let's
pull that up okay and that's thirty two
thousand seven fifty two so we're gonna
put that in there and that was us of
twelve seven twenty seventeen so thirty
two thousand seven fifty two let's put
that in there thirty two thousand seven
fifty two and that's our self 1207 2017
not all statements are gonna have that
pretty end of the end of the day and at
the end of the month end of the year
dating philosophy so you have to get the
statement that is closest to the end of
the end of the year but it doesn't cross
to the beginning of the year because we
want to get a complete set of financial
statements for the current year so it's
okay if we have something that's around
December somewhere but the one that we
have closest to the end of the year and
we hit save and close and this is a
moment that maybe is worth it for you to
sit down with an accountant just because
it's difficult for most folks to know
what goes in the balance sheet you know
what what balance is do we need to bring
over most of the times we actually take
the tax return from the previous year
and hopefully the accountant put a
balance sheet together we want to make
sure we bring in all those balances if
you don't have an accountant you know
you have my email below you can hire me
I certainly help a lot of people with
their QuickBooks and under taxes but if
you have your own accountant contact
your accountant this is a great moment
for your work with your accountant to
get that chart of account started
especially because you know bank credit
card loan that was pretty easy but then
one gets a little bit tricky is adding
your assets and the accumulated
depreciation and that sort of thing let
me show you an example so I'm gonna
click on new and let's say that I have
two assets I have some
Peter equipment and I have a truck so I
have to create each asset I guess
depreciated separately into the books so
I'm going to click on fixed asset and
this one's going to be let's see what
options we have here fix us at computers
ok that was the option and if you can't
find what you want here just click on
other fixed asset in this case there was
something that made sense there and
we'll call this one computer equipment
and let's say that this I think I
misspelled this computer equipment and
then let's say that I originally paid
fifty six hundred dollars for that
computer equipment and I'm gonna put
there as a 12 31 2017 because that was
the value at the end of the year now
that doesn't include depreciation
depreciation would be another thing
there's a little checkbox that says
track depreciation for this asset and
then I can actually bring in my
depreciation and again that's where an
accountant helps to kind of help you
figure out what this number comes from
but normally you copy that or you take
that from your tax return if your
accountant does depreciation calculation
so let's say what we have depreciated so
far is 3,200 12 21 2017 and then I click
on save and close and QuickBooks will
actually create my asset for fifty six
hundred and then we'll both create
what's called my counter asset or my
contra asset which is a depreciation
that gives me the net value of the
equipment let me do the same thing with
my truck
I'm gonna click on new click on my
drop-down and then look for a fixed
asset and then let's see what options we
have here we should have something here
for vehicles I'll be here called as
perfect so we'll pick vehicle is the
last one and we'll call this one Toyota
truck and I'll give it the year so the
size of 2015 and the original cost for
the truck was thirty six thousand eight
ninety typically that will be in your
fixed asset report so put 12 31 2017
I'll click on track depreciation for
this asset and let's say that we have we
have depreciated in two years that says
twelve thousand nine hundred and fifty
dollars and we'll put
31 2017 again that's the pattern we're
doing accounting for the whole 2018 year
and we're bringing in these assets and
this liabilities from the previous year
let's say I also have a loan from Toyota
so I'm gonna click on new and then I'll
create another long-term liability so
click the drop down and I'll click on
let's say long-term liability and we'll
call this one that's fine it's a note
payable that's right we'll call this one
Toyota finance loan and let's say that
what I owe in this loan is twenty one
thousand five sixty and that's also as
of 1221 2017 so notice I'm putting the
cost of my vehicle I also put a
depreciation and I'm also taking into
account the loan what I owe to the bank
because I didn't buy that truck outright
and there's other elements in the
balance sheet the UMaine again may need
an accounting professional to walk
through it with you if you don't have an
accounting professional and again and
this is confusing for you you can skip
it but at some point in time you are
gonna have to enter those balances
because if not your books are just not
gonna be correct
now after my child of accounts has done
at least a balance sheet portion we can
pull a report and we can see what that's
gonna look like at the end of the day so
we're gonna click on reports we're gonna
click on balance sheet run and then
normally what I do is I'll run a balance
sheet for last year so with the last
last year here under the report period
section and I'll click on run report and
we're gonna see what that looks like so
we're gonna notice that our balance
sheet now hopefully matches our tax
return our other balance sheet that
we've done for the previous year we
should have our banking and in balance
or assets and our depreciation so we
have our total assets then we should
have our credit cards the credit card
balance we should have our car loans or
other loans so we have to construct our
entire balance sheet so that's great
let's go back to the chart of accounts
and let's now take a look at our profit
and loss report
our profit and loss accounts so once we
scroll down to all the accounts that
have a running balance you want to make
sure that you also create your equity
accounts I don't want to get too much
into that but you want to create your
equity accounts if you have multiple
partners you may want to make sure that
you do create each partners account
because each partner has the capital
they put in and the capital they take
out the distributions they take out it
is a sole owner then you can just have
one account called owners capital owners
pay whatever but if you have multiple
owners and you want to make sure that
each owner has its own capital account
and typically this opening balance
equity you see here this fifty thousand
eight hundred that is going to then be
divided across all the partners and
that's how the balance sheet balances
lets the Skip balance sheet stuff so we
don't get too much into the weeds on the
accounting or the accounting elements of
this let's go now down to the profit and
loss so we currently have five income
categories that QuickBooks created for
me billable expenses income sales sales
of product shipping income on
categorized income you may want to think
about whether or not you want to use
those you want to delete some of them
let's say for example this sells a
product income I don't care about so I
can click on the drop down and click on
delete and hit yes and I will get rid of
it so then I don't I don't need that
category anymore let's say shipping
income let's say I don't charge income
so I can just click on delete and I can
start getting rid of them some of them
it won't let you do it because you've
enabled certain options remember when we
when we were in the settings we click
enable shipping that account cannot be
deleted because the shipping line is
gonna go there so that makes sense on
categorized income let's say I want to
delete that hit yes it doesn't let me
delete it because that's a default
category that QuickBooks uses when you
don't know what to do with a piece of
income and let's see if I can delete
billable expensing come click yes ok it
did let me delete that I assume that if
I turn on billable expenses for
customers again it won't it won't let me
delete that so now we're done with three
sales I means income categories now
let's take this one call sales and let's
edit it and I'm gonna click on edit and
then I'm gonna call this one computer
let's say that my company sells
computers sells training and it also
sells parts so we're gonna call this
computer sales okay so we have one
income category called computer sales
I'm gonna click on new and then we're
gonna go to category type and select on
income and then under detail type if you
can't really figure out what works best
here pick the one that works best again
this detail type is confusing don't
worry about it being right around half
the time it doesn't matter anyway so
we're gonna call this one trading income
okay that's another category of income
that we have and then we said the other
one was parts just miscellaneous part so
we go down into a category type select
income and detail type to other primary
income of all call it parts sales
perfect so let's see what we got here in
our income category so now we have
computer sales part sales shipping
income training income on categorized
income okay so let's say on the cost of
goods sold side which are direct
expenses let's say that we all want to
create a three categories we're gonna
have computer cost part cost we're gonna
have shipping expenses and then we're
gonna have subcontracted trainers so I'm
gonna click up here to new and let's
start with category type I'll pick cost
of goods sold and we'll start with let's
see cost of labor
okay constantly it was fine we'll call
this one sub contract trainers okay
that's when we used third-party trainers
to to do some of the training for our
computer work let's go to a new and
let's create a another cost of good sold
category again cost of goods sold is my
direct expenses and see what we got here
let's see supply some materials and
we'll call this one cost of computers
sold so that's whenever we sell a
computer the cost element of that we go
that account and then we click on new
and then we go to category type or the
cost of goods sold and the other one was
a cost of parts cost of parts salt or I
didn't select the detail type this was a
supplies and materials and unfortunately
when you change the detail type it
renames it up there for you so you have
to redo it so cost of parts sold and one
thing that you I don't know if you
noticed but profit and loss accounts or
income expense categories don't ask me
to enter beginning balances beginning
balances are only for balance sheet type
of accounts so we click on save and
close and we now we have a pretty nice
setting here for all my income accounts
I have all my cost of goods sold
accounts this generate cost of goods
sold one I can try to delete let's see
if it lets me and yes it did alright so
we want to get rid of all the accounts
that we don't want to use to avoid any
confusion I think I forgot one more I
think it was shipping cost it's got a
new let's go to category type cost of
goods sold and we'll do shipping free
delivery
we'll call this one shipping costs okay
and what was nice about having your own
terminology your own names in the chart
of accounts is because you don't want to
really just get stuck with whatever
QuickBooks gives you you want to use
stuff that make sense to you that makes
sense to your business that ties to the
activities of your business ok so that
we got income and cost of goods so let's
take a look at our expense category so
we have advertising and marketing that's
good
we have asked my accountant that's when
you really don't know what to do with a
particular category and you just send it
there because you mean to ask your
accountant at some point bank service
and charges car and truck we're good so
far contractors let's say we're not
gonna have contractors in here somebody
click on delete because our contractors
are going to be under that other
category we created which was
subcontracted trainer so again I'm
starting to clean up and delete things I
don't need job supplies ok let's say
that
find legal and professional fees travel
and meet meals and entertainment office
supplies actually meals and timing
shouldn't exist let's change that let's
go to edit because in the 2018 US tax
law
they killed entertainment entertainment
is not not even a deductible expense
anymore so we're just gonna call it
minerals with sculling meals with
customers okay the way we have probably
a little bit better terminology that
makes more sense to most to most people
so you got meals with customers where
are my office supplies and software
other business expenses as kind of a
miscellaneous category reimbursable
expenses let's delete that let's say we
don't need that so again I'm trying to
clean my chart of accounts make it as
easy and friendly to use as possible
okay let's say we what else we got
rental lease that's good repair some
maintenance tax and licenses travel on
categorize utilities and depreciation so
let's say that's that's a good set of
accounts let's say that I wanted to
create some sub accounts so under travel
I wanted to create some sub categories
so if you click the drop-down menu here
it gives you the option to edit or
delete so let's say I like travel as a
generic category so I'm not gonna edit
or delete it but I'm gonna create some
sub accounts under it so let me scroll
up let me click on new on the top right
we'll click on the category expenses and
under detailed type we'll go down to
travel and again if if you can't get
detailed type just pick other or
something like that it's not a big deal
so I'll pick travel and then we're gonna
call this one
airfare again let's say I do want to
keep details of that some of the airfare
sub-account off travel there we go and
then down here instead of clicking save
a new I'm gonna click save it instead of
clicking save and close I'm gonna click
on save and new and we'll do the next
one category type expenses detailed type
where are you travel and the next one
was going to be lodging lodging which is
basically hotels Airbnb
hostiles that type of thing and that's
gonna be a subcategory of travel notice
that I'm creating the new account which
is an expense category and I'm making it
a sub-account of travel save a new so we
got airfare lodging those two expenses
select here travel what else we got this
to transportation and that would be like
taxi over subway bus all that stuff so
we got transportation under travel
perfect say my new and I am I forgetting
one I got airfare transportation
I got lodging let's do just one for
miscellaneous travel so let's go to
expenses let's select travel again and
let's call it miscellaneous travel also
under the Travel category okay perfect
and then we hit save and close and now
we're gonna scroll down and notice that
I got my travel category and then I have
a little indentation letting me know
that these are subcategories or sub
accounts so now be able to not just put
stuff on the travel I can put it under
its subcategories
another popular to do is for car and
truck so I'm going to edit current truck
actually don't like the word car and
truck because it gets confused confuse
things I'm gonna change this to vehicle
we've got expenses okay and I'll click
on save and close and then I'll create
some of the sub-account so let's start
with new and that's called a category
type expenses detail type we got vehicle
or current truck if our oh there you go
and then this we're gonna call this one
gas okay this is just for like fuel gas
that type of stuff little gas large fuel
just in case I happen to type fuel in
there instead of gas hit the sub
category and this will be a category of
vehicle expenses there we go saying
thing click the drop-down save a new
category type expenses you'll get used
to it
it's a lot of work you get used to it
but you know once you you you get the
hang of it you get it right every single
time so we got fuel let's do parking and
tolls also make the subcategory of
vehicle and then click Save and new and
let's do another expense category under
auto and let's do the car payment car
lease payment so let's say for example
we have a car that we are leasing for
the for the company
and we're doing a car lease payment now
if you're if you're not doing a car
lease if the car was actually purchased
it gets a little bit more complicated
than that I don't have time to get
through it on this video but for a an
actual purchase vehicle you would have
to have a portion of a payment going to
interest and the portion goes to pay off
the loan like to pay off the Toyota loan
that we created so you only have an
expense category for cars when is a
lease
when is a purchase you have to split it
between the principal which goes to pay
off the loan and interest okay let's do
a save a new and what else am I
forgetting for auto let's do expenses so
we got the fuel is to artless with the
insurance so as to auto insurance okay
let's type the whole thing up out of
insurance and just to say we have
expense and let's do one more saving you
and we'll pick expenses pick auto let's
do it auto maintenance / other okay
other Auto a miscellaneous auto that's
on the vehicle perfect and say close
perfect so now I got a real nice chart
of accounts I got some I got my balances
bank credit card loans I got the
appreciation of some of my assets my
income categories the way I want them I
have my cost of goods sold categories
that
I want them my expense categories
hopefully the way I want them I got even
got some subcategories and I know it
took a long time to get here but I set
up nice chart of accounts good
preferences gives you a real real
positive experience right from the
get-go so let's now go into banking so
we're gonna completely kind of switch
gears we already done with most of the
basic configuration now we're going to
connect our bank into QuickBooks so we
can download those transactions so we're
gonna click on connect and we're gonna
select the bank that we want to connect
now that's different from setting up the
bank in the chart of accounts when I set
up the bank and the chart of accounts
I was bringing in those opening balances
by doing the actual connection I'm gonna
bring in transaction by transaction so
I'm gonna go ahead and log in and then
once you connect the bank you're
probably gonna have a whole bunch of
things showing up in your connection
depending on how many accounts you have
associated with that login I happen to
have some personal accounts associated
with that some additional loans some
other business accounts so you want to
make sure you select the correct ones
that have to do with the actual account
you're connecting so we'll go ahead and
select my checking account match it with
the checking account that my bank detect
it with my login and then I'm going to
select my credit card account my credit
card then select my credit card that
they're logging matched with with the
bank and select that and then once I
have both my bank and my credit card
selected I click on connect and normally
what that will do is it's going to bring
90 days worth of transactions so if you
actually happen to be sitting exactly on
April 1st of 2018 and you're downloading
these you're gonna get a perfect January
1st to March 31st number of transactions
but if you're not exactly sitting on
April 1st
gonna get too many transactions if if
you're doing this earlier before April
first or you can not get enough
transactions if you do this at some
other point later on after April first
so if you are in the particular case
where you got too many transactions then
what you have to do is you have to
delete the ones that you don't want so
let me show you how to do that someone I
click on review your transactions and
I'm gonna take a look at every
transaction that I don't want so let's
say I don't want anything that's dated
2017 so I picked the first one that I
don't want scroll all the way down hold
the shift key select a very last one
that's in the list and then go all the
way up and then go to the batch actions
and click on exclude select it that's
going to delete or get rid of all the
things that I don't want
there are before that January 1st 2018
deadline and if there's more there let
me select them as well
select all the 2017 transactions batch
actions and exclude selected and I see
if there's any more ok there's a couple
of more there select that and select
that and exclude those as well and I'm
gonna do the same thing with my credit
card account if you remember my credit
card account the closing date was
December 26 so I want to delete
everything before December 26 right
because everything after December 26 I
want to bring in because that was the
last balance that we brought in so let
me exclude that and that's perfect now
if you happen to be in a different
situation where you did this after April
1st and you need more than 90 days worth
of transactions keep in mind QuickBooks
is still stuck and limit it to those 90
days so you actually have to go into
your bank login you have to download a
manual quickbooks online a download file
is called a qbo file or some cases it's
called a web connect file you download
that manually for whatever period you
want and you click on this little drop
down menu that's here in the top right
click on file upload and you're going to
browse the file so I'm
we're in your computer selected click
upload and then that's going to bring
those transactions so with the direct
connection what will you just put a
login information of the bank it's
limited to those 90 days if you're gonna
need more than that you have to download
it manually through the bank and you may
need to watch a different video for that
guy that's another process or if you
brought in more than what you wanted you
can exclude them or delete them the way
I showed you how to do that now I'm not
gonna get into the online banking in
this particular video I'll put some
links below to a deep dive into online
banking just because there's a lot of
things going on with banking and I don't
want to you know make it fall short so I
just wanted to get you to that process
where we actually connect the banks and
get that stuff connected now let's talk
about creating some transactions so when
you first set up your QuickBooks Online
when you the first thing you want to do
is create your invoices create your
bills from your vendors but at first you
don't have any customers so let's create
some customers first we're gonna click
on the sales tab on the sales menu on
the left side of the screen and then
we're going to click on clients remember
we change the terminology from customers
to clients and then the first screen is
always going to look like this is sort
of a very simple simplistic screen I'm
gonna put here
Maria Lopez let's say choose my first
customer and I click on add client it
adds it to our database now my customer
center looks or my client center looks
that way it's going to look moving
forward to add a new client I click on
the top right new client and then I get
the screen the way it's supposed to look
let's say one of my client names is XY
see health Corp and I'm gonna put the
address okay optionally I can put a
phone number their website I definitely
want to put an email if if I'm gonna
send them an invoice so let's call this
payables at xyz.com let's say these are
the folks that that are going to receive
invoices that we send them you can also
add a different shipping address if you
want to you can add some additional
notes you can add tax info which is
basically their tax ID number if you're
not going to charge sales tax payment
and billing info this would be to
override the default so let's say that
these people we're gonna give them 15
days to pay instead of some other amount
and also they usually pay us via check
or we always send them a printed invoice
so those settings you can change
different than the default there's also
attachments if you want to attach a
client contract or something related
some document related to a customer you
can attach it there and always make
reference to it in the in the future so
I'm gonna click on save and then that's
how we create new customers so now I
have to cut two new customers let me
click on this button here and click on
clients so I got two customers in there
so we're good to go
with the least our initial customers now
let's click on expenses so we can create
some vendors we're gonna click on
expenses and then we're going to click
on vendors we're gonna click on add
vendor and let's add here Comcast and
I'll click on save and there you go
there's my vendor created I can also
kind of go the long route click on new
vendor and let's say this is an
individual that we pay for professional
services so put here Carlos
Smith and we'll put here how you want
the check to look if it's going to be
looking like his name let's say I don't
want to email them some information so
we'll put his email here Carlos
gmail.com and we can put his phone
number ok and address as well if I'm
gonna actually gonna print the check
it's important that I have an address in
there so if I'm gonna print them a check
let me put his address first Avenue
floor 3 3 3 3 1 I can also add some
notes I can click on track payments as
1099 and if I'm gonna pay him as a
subcontractor and give him a ten a nine
form in the future so I could click on
that and put
xav not all vendors are gonna apply for
that 1099 but you can and I click on
save and then let me create one more
vendor let's say we're gonna create a
supplier that we buy products from so
let's say we're gonna buy from Dell Corp
and we'll put their address here perfect
click Save
and that's basically how we create
vendors you can create them with a full
information address or you can just
create them by just typing their name
and that will be your vendor database
which is important for you to create
your bills and your expenses now there's
a tab here called Workers which is going
to be both for employees and you would
have to enable payroll payroll a
separate service is between 25 and 40
dollars a month plus a monthly
additional per employee in the year 2018
they're changing the price structure a
little bit so it is possible that when
you actually watch this video the
payroll service has a different price
but when you turn it on and I'll just
pick on one of these here let's say and
it's gonna give me the two options here
it's gonna have I want to do payroll
myself and here's the fee so according
to this is $39 a month and there's some
discount and then there's also full
service which basically moves the
responsibility completely to QuickBooks
to Intuit for paying and filing taxes
and that's $99 a month again depending
on when you watch this may see a
different price structure but that's
what was available now so $40.00 a month
full payroll you can create your forms
pay your taxes but you're responsible as
the business owner or a hundred bucks a
month and into it we'll take all the
responsibility so you have to enable
that service as extra you have to enable
that service if you want to process
payroll through QuickBooks
there's also another tab here called
contractors which is gonna include all
the vendors remember we create vendors
just now that are marked with a little
check mark that says this vendor is a
1099 so any vendors that are also marked
as a track as tenant
they're gonna come in this group called
contractors and we're gonna create an
entirely different video to can explain
the 1099 preparation process so we're
not gonna do it in this particular video
but it's gonna be a separate video just
to explain that because that's gonna
have its own steps and its own sort of
workflow so that's how we created
customers inside of sales and this
customers clients tab and then we
created vendors inside of expenses and
in this vendor tab so you want to create
the chart of accounts the customers the
vendors try to create those right off
the bat now what are the common
questions we have is you know what if
these vendors have a running balance you
know let's we started our books this
year in 2018 what a company has been
open from before and we owe some of this
vendors money for opening balances so
you have a couple of choices one is if
you have some open bills for vendors you
can create those bills in the past that
way you you have them there and then you
pay them in the future
or two when you actually create the
vendor so let's say we're gonna create
Microsoft as a vendor let's say we buy
software from them we'll create them
with a opening balance so let's say we
owed them twelve thousand dollars at the
beginning of the year so I put 12 31
2017 and that one ends up happening is
when we create this vendor I'm gonna
click on save you're going to notice
that the vendor is created and it also
has a running balance and it gives me
the capacity to make up a payment so
QuickBooks automatically created a bill
dated 12 31 2017 to let us know that we
may have one or multiple bills open from
that vendor same thing with customers
when I click on sales and I click on
customers or clients if I have an open
balance with any of these customers I
can manually create invoice my invoice
for all the invoice that they owe me
from the past or when I create a new
vendor same process as vendors let me
see I have ABC Contractors LLC let's say
this is one of our customers it's a
corporation and they owe us money so
we're gonna click on where is my opening
balance but
maybe payment and billing there it is
inside payment and billing and we're
gonna let's say that they always fifty
six hundred dollars and we put their
1231 2017
and then click on save and QuickBooks
will automatically create one open
invoice dated 12 31 2017 representing
the entire open balance that we have
from that customer from previous periods
again if you're starting your started
your business from zero you don't have
to worry about opening balances you
probably also don't have to worry about
opening balances in the chart of
accounts but this is mostly for the
folks that are starting a business and
that are setting up QuickBooks for my
business has already been started from
before now let's go on to creating our
products and services which is another
crucial piece of the setup process so
we're gonna click on the gear box top
top right and we're gonna click on
products and services so once we go into
products and services the button is
gonna say add product or service I can
click on that and it gives me three
choices a non inventory a service or a
bundle and a bundles ready to group more
than one product together let's start
with service and let's create our hourly
training service and we'll call this one
level one and this one we charge $75 an
hour for on description we're gonna put
our early training with level one tech
okay so that's the description and
you're gonna notice that when we create
the invoice we're gonna skip putting a
picture on that or a category for the
time being we're gonna click Save and
close and now we visually have our
products and services quickbooks by
default creates this one called hours
and sales we can make these ones
inactive let's say if it lets us do that
by actions make it active because we're
really not gonna use them just make them
inactive for now actually doesn't let me
doing so by default there's one called
hours and sales that they have to be
there you can turn them off what can you
do leave them there no big deal
this one called hourly training services
I can go back and click on edit if I
want to change it I can click on the
drop down make it active or duplicate I
like duplicating because I don't have to
create them over and over so I'm gonna
click on duplicate and we'll call this
one hourly training service level two
and we'll make this a hundred and fifty
dollars an hour and what called will do
the description and call it level 2 tech
beautiful and then on their income
account I didn't mention this last time
I want to make sure they have the
correct category that matches that item
so this one's going to be training
income so I made a mistake on the last
item and I didn't put the correct income
account so let me click on save and
close and let's go to the other one and
edit it and change that income account
so let's do training income and then
we'll click on save and close perfect
now let's create a an item for our
products that we sell so let me click on
new and then we're gonna click on none
inventory part and the reason why
inventory part which is one of the
options it's not enabled is because
we're working of QuickBooks essentials
which is a version of ulsan manage
inventory so on their name we'll put
here we'll call it Dell laptop b52 and
on the SKU number this could be like a
technical number right so so di p 5 - 0
0 - 9 8 P so this is like sort of like
the code or the internal code and this
is more of a descriptive name for it and
then we can have a full description like
you know their laptop model 52 you know
type B whatever it is you know i7
processor 16 gigabytes of RAM whatever
you want to put in there and then we're
gonna put our sales price so let's say
for this product we sell it for $6.99
and the income account would be computer
sales so it looks like we're
good there will hit save and close and
there is our product created let's say
we also have some miscellaneous cables
that we create so we got a new and we'll
do non inventory part and we'll call
this one miscellaneous cables okay and
then we won't even give a SKU number and
let's say we will put it for ten bucks
and we'll change the category here not
to be computer sales that's gonna be
part sales okay that's perfect part
sales save and close and let's create
one more for like shipping expense so
let's go into a service and we'll call
this one shipping and we'll send this
one into our shipping category so
basically and let's say we'll leave this
one at zero so we change the price each
time so now we got a couple of items set
up and with our items set up we we are
now ready to create some invoices so
let's go back into the dashboard here
and as of now all we've done is
configuration we created some old
invoices from opening balances we
created some old bills from vendors and
ODIs money we created some accounts with
opening balances some accounts there
were P&L accounts profit and loss
accounts that didn't have any balances
we created a contractor I mean we we
created a part of services we did a lot
of setup at this point let's now start
transacting let's create some
transactions so let's click on the
create a quick way button on the top
right which is a plus sign plus sign
inside of a circle and then we're gonna
click on invoice but before we do the
invoice let's do what usually happens
which is we create an estimate first so
we'll click on estimate and then we'll
select the customer that we're giving
the quote or estimate to so we're going
to select ABC contractors and then we're
gonna give this estimate number let's
say I want to start all my estimates
with let's say three so although three
zero zero one zero one so that would be
my first estimate number and then
QuickBooks naturally will take the next
number one
by one will always let you change it
because we in the preferences we
actually gave it the option to turn that
box on if I didn't put custom
transaction numbers in the settings box
you wouldn't even see that box and
QuickBooks would automatically give that
a number so let's say we gave this
estimate on Tuesday January 2nd and
let's say we are going to expire the
estimate on January 31st pretty much
letting them know that beyond that that
price is still not valid let's say that
we're promising to ship the product
somewhere around let's say February 14th
and no tracking number for now because
we just don't we haven't sold a unit and
let's say we're planning to do this via
FedEx that's up to you you don't have to
use those shipping boxes that's really
up to you now on the product and service
I'm gonna start putting what we're gonna
sell this client so let's say we're
gonna sell this client to laptops so we
select from our drop-down menu our
product which is going to come in with a
product name and description in the
settings somewhere you can actually add
that's Q column there if you want to
have the SKU number as well but for now
we have it hidden and they say we're
selling them to laptops and we're also
gonna sell them some parts so let's do
miscellaneous cables and we'll call this
one you know extra charger or something
like that whatever is and we're gonna
sell them let's say one extra charger
for $85 and that's at one more line for
shipping and again that's because I
created the shipping line because I want
to have it up there I can try to say $25
for shipping but if you don't want to
create a line you can delete that and
since I enable the shipping feature I
can just put it down here on the total
it would actually be the exact same
effect I'm I like itemizing it this week
this is a lot more clear or some people
like to see it right there
on the on the on on the subtotal so
we'll click on save and close and that
will be it if we have this little box as
I send later it won't let you save it
until
put an email address you're basically
saying that we are going to queue this
to email this estimate later on in the
future so let's say we're going to go to
ABC gmail.com and then we'll click Save
and close that's it our estimate is done
now what are the things I like to do
every time I create a transaction I like
to look at my reports related to my
transaction so I'm gonna click on this
little magnifying glass appear and then
I'm gonna type here estimates and I can
see my we have a report transaction this
estimate we can see this estimate report
so we can click on that and it will give
me a report of all my estimate so that's
actually great I get a transaction list
I see my report let me go back into the
dashboard and let's see how we will find
that transaction and a different way of
doing it is by clicking on the
magnifying glass on the top right and
then this will give me a history of all
my recent transactions so I have my
journal entries from all those beginning
balances we have that invoice from the
customer that had an opening balance
from last year and a bill from that
vendor that had an opening balance from
last year as well so I can click on any
of these and go back into the
transaction I was working on the other
thing I can do is I'm gonna click X here
on the top right I can click on the
quick create button and then go back
into estimates which is gonna create a
brand new blank estimate but here on the
top left you're gonna see this little
like clock watch type of icon when you
click on that it will show me a history
only off my estimate so I can click on
that estimate and it will pull it right
up now I like working with estimates
first before invoices just because it
gives me good control of what prices I'm
giving out there but some folks go
straight to create invoice now from here
what's nice is I can now mark the
estimate from pending into accepted and
I can also record like who accept there
so let's say you know Jane accepted it
and I can put the date that she accepted
it on the fourth of 2018 okay so that
allows me to kind of record the fact
that the estimate is not open its
accepted so that's actually nice like in
the friendship between open estimates
and
except estimates and I can click on save
on the bottom and then I can click on
next to the dollar amount I can click on
create invoice and what's nice about
this is is going to basically copy the
entire contents of that estimate and
create an invoice from it now at this
point I can select the invoice let's say
stated on Monday the 8th 2018 I can
maybe even change times if i want to so
put net 15 and then now that I have a
tracking number I can put my tracking
number up here again that's only
assuming that you do ship the product
that doesn't necessarily mean that you
have to do any shipping now on the
invoice number same thing let's say I
want to have all my invoice numbers
topped with one so I'm going to put one
zero zero one or one and then that's I
want to give it the first invoice number
and then I want QuickBooks to manually
give a sign that number afterwards now
let's say during the sales process with
we renegotiated the price at 675 I can
just simply modify it on invoice I don't
need to go back into the estimate like I
modified on the invoice and then I'm all
set now from here I can click on print
preview or print or preview click on
that and then click on print or preview
and you can see exactly what that
invoice is going to look like before you
ship it notice it has my logo that I
added from before all the colors that I
wanted my company name my phone number
my email the date invoice numbers got
all the stuff here and the subtotal so
it's actually a super fast quick way of
cleaning your invoice at this point you
can print there I can just click on X
and I can also email them straight from
here so I can go into top bottom on the
bottom all the way in the bottom right
you're gonna see where it says a save
and send I can actually click on the
drop down and just save and close or I
can click save and share a link which
basically gives me a link that I can
manually put on an email saying hey
click here to view your invoice and pay
your invoice but if you're doing your
losing using the email straight from
QuickBooks there's no need to do that so
we'll click on the drop down
and click on save sin it will send you
to the preview screen letting you know
what this is gonna look like on a PDF
when you email it you can actually
change the text that that gets on the
body of email notice that the subject
itself has invoice number it has the
company name that is sending it from if
you want to accept the credit card
payment you hit that check box that says
accept a credit card payment or a bank
transfer and you would have to have that
payments account set up to be able to do
that I talked about that earlier when we
were discussing the setup process so at
this point we just click send and close
and then that customer will get via
email that invoice and then at that
point they'll send you a check whatever
it happens to be so now I can just click
Save and close on the bottom right and
then I'm done with my estimate creation
and invoice creation process again I can
click on the magnifying glass and I can
click on invoices I can type invoices
and I'll tell me all the reports that
have the word invoice on it so I can
click on reports invoice list and then
notice that let me to date all so it
shows all the dates and you will notice
that all the invoices old and new are
showing on this report so I really like
having you know checking what's going on
there with the reports because it kind
of gives me instant feedback of what's
going on so that's how I create an
invoice now let's say that I am now
gonna pay someone a bill like I owe a
vendor some money let's say for the
purchase of those two Dell computers so
I'm gonna click on the quick read button
on the top right and then I'm gonna
click on Bill this is where I create my
accounts payable my bill when I create
them bill and let's say that the product
arrived from Dell so I select my vendor
and let's say they give me 60 days to
pay and the product arrived on let's say
the fifth and that's that equals to the
bill date so automatically will take the
60 days add it up on the due date but I
can also manually change
if I want to now under bill number
that's going to be the actual number
from the vendor the vendor will send me
an invoice I'm gonna transcribe the
vendors invoice and here so right here
under account this is the category in
which I want that expenditure to go to
so that would be cost of computer sold
perfect and let's say that my cost for
those computers that were sold was I'd
say 1250 and I also paid for some
shipping so we got shipping cost let's
say I paid $15 for the shipping on that
okay now notice that I'm not it's not
asking me for the actual name of the
product the actual product or service is
asking me for the account from the chart
of accounts and the reason for that is
because we have an enabled inventory
portion where our purchase orders our
bills contain the actual product that
we're buying so I'm going to show you
that in the Preferences in a second so
I'm gonna click on save and close and
let's say that I finally finished and
entered the bill from our vendor now I'm
gonna click on no things here because I
don't know what they're selling me and
let's go and check out what's going on
now so I'm gonna quickly click on
reports I'm gonna click on profit and
loss click on run and then under date on
the top left usually you have your date
period so I'm going to click this year
and then click on run report we kind of
see what's going on so I have my sales
right here 1460 my sales my part sales
my shipping income then I have my cost
the cost of my computer cost of shipping
right and then I have my profit 195
again I like to pull this reports as I
go because it gives me a really good
understanding of exactly what's going on
as I create all these transactions right
you want to know what's going on with
your reports the other report would be
the balance sheet so I click on reports
then I'll click on balance sheet and
I'll click on run and then it's to
period this year so it contains all the
transactions
from this year click on run and I have
my bank account at that exact same
dollar amount that I started with
but accounts receivable is seven
thousand sixty which is basically I'm
going to click on that it's basically
all of the open invoices that I have so
once I click on that it gives me a
detail let me go to all dates and click
on run report and I should give me a
good detail let me zoom out that gives
me a detail all my open invoices so I
got my old open invoice from before
fifty six hundred and then my new open
invoice fourteen sixty so that should be
very clear of what is happening to my
books as I create all these transactions
now let's move on to receiving a payment
for the invoice and then making the
payment for that bill so let's click on
the quick create button the top on the
top right and then we're gonna click on
their clients click on receive payment
so we click on receive payment and let's
say that our customer that paedos was a
BC contractors and let's say they're
paid owes us let's say six thousand
dollars flat they paid us our old
invoice and also part of the new one so
let's say they paid owes on Monday the
8th and the dollar amount was six
thousand dollars flat automatically
QuickBooks will apply the total dollar
amount to the old invoice and then the
balance to the current invoice so that's
actually pretty neat how QuickBooks
start up but I could actually uncheck
this if I want to manually uncheck these
if I want to and then select manual
amount so let's say if I wanted to
select 1462 completely go to the new
invoice and then the balance of the six
dollars and I can put it in here and I
can leave the old invoice partially open
so I actually have full control over how
I want to apply those payments I'm gonna
try it again through six thousand and
then that QuickBooks applied
automatically just because it's simpler
and easier but just know you have
control over that and let's say they
paid us with a check and the
number was five five nine six and then
under the pass it to you can go straight
into the bank assuming that when they
paid you the money went straight into
the bank that is a category of of type
of transaction but what I always
recommend to do is to click on add new
new again and then under account type
we're gonna click on other current
assets and then under detail type we're
gonna go down to undeposited funds you
always want to create an account code on
the positive funds
just because assume that you get paid by
to customers three customers in one week
and you want to group those two passes
together and go to the bank all in one
shot and that's a very common thing
because when we go to the bank and
deposit multiple checks our banks in our
bank statements never really separate
those payments and a clearly identifying
in your in your statement who paid you
what normally is that lump-sum deposit
that all gets bundled together so in
order to emulate that same thing that
happens you want to receive your
payments into that on the positive funds
account and then as you receive other
payments and you group them together and
you make one lump sum deposit your bank
statement looks exactly like your
QuickBooks so let's do that example let
me click on save and close and let's see
make sure that I have correctly applied
all these payments this was four hundred
over here in order to get the six
thousand yeah it's to save my clothes
perfect I received that payment let's
say that I have another client that
walked into my office and bought
something let's say for four hundred
dollars so I'm gonna click on quickly
button this time around I'm not gonna do
invoice receive payment as two separate
transactions just because it happened
pretty much all at once that walked in I
saw them the product they paid me so I'm
gonna go to sales receipt instead our
sales receipt is an invoice that has a
payment built into
so let's say that was my customer Maria
Lopez who walked in and that happened on
let's say Tuesday the 9th and we sold
them some miscellaneous parts and it was
$400 so let's put here $400
and notice how QuickBooks automatically
gives the sales receipt number in
continuation from the invoice and the
pasta - as I mentioned before we're
gonna go into undeposited funds and I
said she also paid us with a check and
the check number will type it here and I
will click Save and close
let me uncheck this send later box that
way it doesn't force me to have their
email in there and then click on save
and close
so we basically received two payments
one $6,000 payment from an invoice and
one $400 payment from a sales receipt
but I'd say when I go into the bank I
make one deposit for sixty four hundred
dollars so when I when I want to record
that I'm gonna click on the quick create
button and then I'm gonna click on bank
deposit and then on the bank deposit
window I will select both of my customer
payments ABC contractor and Maria Lopez
which adds up to six thousand and four
hundred and it is sixty four hundred
which happened to be the exact same
dollar amount that we deposited on
Wednesday the 10th and we want to match
that bank deposit with that lump-sum
deposit that contained multiple customer
payments so we're gonna go ahead and
click Save and close and that's how you
record a deposit using on the positive
funds when you have multiple payments in
a single deposit now if that wasn't the
case
you don't have to go into on the
positive funds you can simply just go to
receive payment let's say that my
customer ABC contractors paid me my
balance of a thousand and sixty I can
just put here thousand and sixty and
let's say they paid us in cash and I can
go straight into the bank that's
assuming that I'm not grouping that
deposit with any other customer check so
you could also do that you don't have to
complicate yourself using on the
positive funds
if you ever happen to be working with a
company or is your own business and you
bundle the passes group them together
you're gonna have to use that sort of
clearing temporary account to be able to
group them together and match it with
your bank statement so we're gonna click
on save and close and that takes care of
that so you can go either way now I'm
gonna click on banking real quick just
so we can kind of see what's going on
here we're gonna click on banking and
then we're gonna click on go to register
we happen to be on that checking chase
checking account we're gonna click on go
to register and then we're gonna see a
check register that contains the entire
history of what's going on we're gonna
see our opening balance that started a
86,000 then we're gonna see it posted
for sixty four hundred another passer
for a thousand and sixty so notice how
my bank balance goes up because I'm
receiving payments from my customers now
let's move on to making payments of
bills so when I click on the quick
create button we create a bill earlier
let's now pay that bill by clicking on
pay bills once I click on pay bills I
select the bank account that I'm paying
from you could also pay a bill from a
credit card that's totally feasible and
let's say we're gonna pay Microsoft
eight check for let's say four thousand
dollars we don't have the whole amount
to pay him yet and then we're also gonna
pay dell corp and we're gonna pay him
the whole thing now under starting check
number if you're gonna print the checks
you're gonna put the check number that's
on top of all the pre printable checks
so when you print he goes in sequence
if you don't print them just put any any
number here that pertains to your manual
check number and you're gonna pick this
up from your actual checkbook and then
we're gonna click on save save or save
and close and this will assign to one
check check number five five six five
eight and to the next check it will
assign check five five six five nine so
make sure that all that stuff matches so
once I click Save and close the bills
are marked as paid I can click on know
things whatever the pop-up
and then I can take a look at in my
check register how these checks were
assigned check numbers I want to double
check with my paper check book to make
sure that those bills that I'm paying
actually match those those numbers now
that's assuming that I'm paying multiple
bills at once I can simply just go to
the quick create button and click on pay
bills and just pay one at a time so I
can select my Microsoft and then I can
pick the actual check number and I don't
have to really worry about the check
number sequence you could also go that
route you could pay one check at a time
if you want to and just put the actual
real check number in there the thing is
that in the year 2008 18 most people
print the checks at least print the
checks for actual checks or pay
electronically with a credit card or
some other bill payment system so that
takes care of paying bills that have
already been created in the system
there's also two other transactions are
really interesting which is this one
called expense and this one called
cheque
when I click on expense it gives me the
ability to pick two potential sources I
can pay an expense from a bank account
or I can pay an expense from a credit
card account if I pick a credit card
account I'm actually recording a charge
that's being paid with one of my credit
cards now my bank debit card my bank
debit card would be my actual checking
account we're talking about the actual
you know credit card that carries over a
balance so I'm gonna pick the credit
card I'll pick the vendor that I'm
paying let's say this is Comcast and
I'll select my category utilities I'll
select the date that the charge went
through it and say it was Monday the
first and then under payment method I
can just put credit card and let's say
the dollar amount was 396 point 52 and
if the happens to be a reference number
recorded if there isn't one don't record
it let me click on save and close and
we're outside of the expense transaction
now the expense transaction does not
affect my bank register but it will
affect my credit card register that's
going to my credit card
appear and you will notice how we have
my opening balance and then the 396 52
let me go back into the quick create
button and click on expense again and
let's say I'm going to put a charge that
came out of my bank directly or paid
with a debit card so let's say I paid
we're gonna add new and let's say I paid
McDonald's okay and I went to McDonald's
I ate there and it's with a client will
call this meals with a customer and they
say that happened on the 3rd and I use
my my business debit card so I picked my
my actual checking account and let's say
that was $26.95 and if there's no
reference number now I need to put it
payment method I can put a credit card
but I could also leave it blank or I can
go to add new and create one called
debit card whatever is easier easiest
for you you can pick whatever you want
or leave a blank
that's actually not an important box at
all I find that it's way too
time-consuming so I'm gonna click Save
and close and that's how I record
expenses that are electronic payments
debit card transactions or credit card
transactions if it's going to be an
actual check we click on the quick
create button and then click on check
and then we'll select the vendor that
were paying so I'd say we're paying
Carlos Smith and this is a subcontractor
trainer category and again knowing or
memorizing that chart of accounts
becomes really valuable we'll select the
check number here and then we'll put
$5,000 whatever is it that we are paying
them we'll put the date of the check ok
this could be I checked out a print so I
can click on print check on the bottom
of the screen or I check that I
handwrite that I'm basically just
entering in QuickBooks manually and then
I click on save and close and that will
be it but just remember that if you're
gonna pay a check that that that comes
from a bill you know
I use the write checks function you want
to use the pay bills function so for
example let me go to enter bills I'm
going to create a bill and I'll create a
bill for the same vendor Carlos Smith
let's - here subcontracted trainer let's
say that this bill came in on the 3rd of
January put it put a bill number there
and let's say this was for $2,600 ok I'm
gonna go ahead and click Save and close
and there's a bill created if I try to
pay him with a check and not use pay
bills so I'm gonna click on check and I
select my vendor so Carlos Smith
notice that I'll get a little drawer
show up from the right letting me know
that hey maybe you're trying to pay a
bill instead of writing a check and it
that's the case then we click here on
add and I will now convert this into a
bill payment instead of a write check
and then it will be entered in the
system as a bill payment that's actually
attached or applying to an active open
bill so I'll click on save and close and
that's the difference between writing a
check out right and using pay bills now
if I click the drop down menu and go
back into my
Chace checking I'm in the register
screen I can actually see all the debits
and all the credits affecting my bank
balance it's actually really nice thing
so that's what you start seeing things
that make sense so so far we've created
an estimate a sales receipt we received
a payment we've done an invoice we
haven't done credit memos we found
receipts we'll leave that for a
different video we've also done expense
without check we don't bill we don't
bill payments we have a non purchase
orders yet because this is not the
correct version of QuickBooks I can do
that we talked about payroll briefly
we'll skip that we'll do a different
video for that with the bank deposits we
haven't done transfers journal entries
and statements so let's go ahead and do
that so let's start with a transfer and
a transfer is simply to record a balance
sheet to balance sheet
transfer of funds so let's say for
example that I'm gonna pay off my credit
card balance with my bank account so I'm
gonna go to Chase Bank that's the from
account and then I'm gonna go to
transfer funds to when I go into my
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credit card chase visa and let's say I'm
paying off a balance of $5,000 I was
really cool about this is once you type
$5,000 in there you're gonna see how
these balances shift right are you gonna
see the $73,000 code down by 5,000 and
you're gonna see my credit card go down
by 3,000 let's say that payment happened
on January the 8th and what click on
save and close and now if I go back to
my bank register which by the way we
click on banking and then we click on go
to register that's one way of going into
the bank register you can also click on
the quick the Settings button in the top
and then I can click on chart of
accounts and then I can click on any of
my bank accounts where it says if you
register now that's another way to get
into the register screen so you always
want to look at the register screen take
a look at all the deposits payments that
are affecting your bank balance right
where's my $5,000 to my credit card
there it is if I switch over to my
credit card let's go to the visa there
is I should see the couple of charges
that we entered the Comcast charge and
then I can see the the balance of five
thousand dollars being paid down and
that effectively lowers my bank balance
on my credit card my credit card balance
so what this shows you is how you do
things in QuickBooks to run your
business run your customers run your
bills your accounts payable accounts
receivable and also always ties down to
the bank and you want your QuickBooks
balance to match your real bank balance
so that's essentially what accounting
it's all about now once I I do that I
want to essentially at some point
reconcile my bank so when January comes
in and I close the month
I'm gonna click on the Settings button
on the top right on the gear icon and
then I'm gonna click on reconcile and
then I'm gonna click on reconcile
account I'm gonna select my bank account
that I want to reconcile so let's say I
want to reconcile the checking account
I'm gonna pick the the ending balance on
let's say the 31st of January I'm
actually gonna grab that bank statement
just like I did with opening balance and
I'm gonna enter now the ending balance
of my January so let's say that's
sixty-five thousand whatever happens to
be then I click on start reconciling and
what I'm actually going to do is I'm
gonna pick up my my statement my paper
statement and I'm gonna check off in my
paper statement one by one as I see
things that are in QuickBooks that match
my paper statement so let's say for
example this check cleared and this
McDonald's charge cleared and this
checked cleared and let's say this check
didn't clear so we'll skip that and then
we keep going and we'll see every check
that clears every deposit that clears
and at the end of the day this
difference should amount to zero if
you're doing the reconciliation
correctly that difference should amount
to zero I welcome to check out YouTube
for other in deaf bank reconciliation
videos because that this is another area
that just requires a lot of moving parts
and trying to make this video of an hour
tops and possibly even more but maybe
not more than two hours limits the time
that I can go deep into reconciliation
so you want to search QuickBooks for
QuickBooks Online reconciliation or how
to reconcile to go deep inside this
particular screen but the concepts are
exactly as I as I explained them let's
talk about reconciling the credit card
is going to be the same exact concept so
we're gonna click on reconcile and then
we're gonna change the account from the
chase checking into the credit card and
yes you want to reconcile your bank
account and reconcile your credit cards
because if you are putting a beginning
balance in there
from you know from what we're doing the
child of accounts and then you're gonna
enter every one of the individual
transactions you have to reconcile it to
make sure that it's complete so let's
say this one closes on January 24th and
the ending balance is 3,500 we click on
start reconciling and then we're gonna
do the same thing we're gonna mark off
any payments and any charges there are
other paper statement and once we're
done the difference should be zero okay
let's get out of that and that covers
reconciliation let's see what else we
haven't covered yet we didn't cover
journal entry so let's do it you're into
real quick and again that's this is one
particular section where maybe you want
to get some help with an accountant most
small business owners never have to do
any journal entries at all this is more
of a sort of an accountant type of
transaction screen but if you wanted to
for example record something you can
only do it through a journal entry like
the depreciation of your vehicle for the
month you would do it through here so
you select the month that you want to
record that I'll put here my
appreciation for my Toyota and then that
would be the actual asset account that
we're reducing and then we're gonna go
into our depreciation expense and we
recorded here so let's say the
depreciation for the month it's five
sixty and I just put five sixty debit
five sixty credit why is credit why is
debit I recommend that you learn
accounting or take some sort of
accounting course that's actually a very
in-depth explanation but this all I
wanted to cover is how to do a journal
entry which means you select the two
accounts that you want to make
adjustments for and you select the
dollar amount one debit one credit in
each to balance and then we click on
save and close again if you're a small
business owner or non accountant you
probably feel and have to worry about
recording depreciation in the first
place but journal entries are essential
for adjusting balances on any type of
account in QuickBooks and that's
essentially what journal entries are
and lastly on this side we have our
statements and we click on statements
and that's for me to send a list of
invoices and payments that are inside
the history of a customer so I'm going
to click on customer balance status
click on all and another ending date up
pick the 31st of January and then I'll
click on print and preview see what that
looks like and basically what a
statement is is a list of open invoices
payments open invoice payments and
that's how you explain the running
balance of a customer with a statement
that contains the totality invoices and
payments pretty much transactions that
effect your customer balance so that is
statements in a nutshell now from this
screen really nothing else I want to
talk about inventory of purchase orders
but that's gonna require me to upgrade
my QuickBooks to the plus Edition and on
the gear menu we covered a calendar
settings we've covered chart of accounts
we covered configuring the invoices at
the beginning we covered products and
services we haven't covered importing
any data we covered reconciling and
that's really all we've covered and
that's what we're going to cover on this
video up to that let me go into my
settings and upgrade my account to the
plus Edition so we can cover the extra
features at the plus Edition house I'm
gonna click on building a subscription
and I'm gonna click on upgrade here and
then the upgrade will give me basically
one choice to go from essentials to plus
so I'll click on upgrade and that is us
of the data this video of $50.00 a month
versus $35 a month I'm gonna click on
submit and I'm still on the 30 day trial
so it doesn't really matter that I'm
doing this it's not charging my credit
card or anything like that because I'm
still doing this from a 30-day trial so
I'll click on done and now we're gonna
see some new features so the first new
feature that we're gonna see it's gonna
be inventory so when I click on the
quick create button we're not gonna see
the purchase order when I click on
purchase order it's gonna be a new
transaction let me click on refresh
because I just did the upgrade so we
probably have to refresh the screen so
we'll let QuickBooks kind of logout look
like in to recognize that we are on the
plus Edition okay so yeah now that's
gonna work so I'm gonna click on
purchase order and now I'm gonna see a
new transaction let me it tells you that
it's turned off so let me turn that on
in the settings and where are your
purchase orders perfect so let's turn
purchase orders on click on save and
also where it says bills and expenses we
want to click on where it says track
expenses and items by client that's
actually really powerful setting we'll
click on save on that I think it's not
maybe under sales oh there it is
products and services and then now we
have inventory tracking on hand that's
new so look like on save so that's
perfect so let's close that and now
let's go into quick create purchase
order okay that's a new screen we
haven't seen this before
now the purchase order is for us to
enter purchases of inventory that we
plan to purchase in the future that when
we get them we'll turn that into a bill
so we'll do an example of that but let
me first create some inventory items so
let me click on the quick create not
only quick create on the Settings button
click on products and services and let's
create some inventory part so once I
click on new now I have inventory as an
option click on inventory now let's say
we're gonna put here Dell server model
t1 and we'll put a model number SKU
number here whatever it happens to be
the technical number I'm not gonna put
any initial inventory because we just
turned on inventory for the first time
let's say we sell this server for $3500
the income account is now going to be
computer sales because that's one of our
hard
and let's say we pay for this $2,700 and
we'll put here cost of computer so so
now I'm creating an inventory part
something that I'm gonna buy for twenty
seven hundred and then eventually sell
for 3500 and I usually stay away from
this initial quantity on hand because
that's creating new inventory opening
balance of inventory so unless I'm doing
opening balances I want to ignore that
completely now the other point I like
that's how many I like to have at all
times in stock so I'm going to put there
five so it tells me more or less that
that's what I want I want to have five
at the most part so I'm gonna click on
save and close and I'll put zero as of
today you always have to put let's say
what's today's date zero one zero five
2018 you always have to start with zero
and hit save and close so there's my
inventory part my server now I have zero
on hand and my reorder point is five
that pretty much means that I should
have five at all times so let's do a
purchase order click create button and
then click on purchase order and then
let's go to Dell Corp and then under
parts and service notice that I have
accounts where I can pick like something
from my chart of accounts and I have my
items and I always because I'm doing
inventory I always want to do items so
we'll click on the drop down menu select
the only product that's you know that
should be in a purchase order which is
my inventory parts and I let's say I'm
gonna buy five of these okay thirteen
thousand five hundred and then I click
on save and close
so our purchase order is not an actual
liability it's not a accounts payable
it's not that it's not a transaction
it's just letting me know that I expect
to sell this in the future
I expect to receive them at some point I
don't I don't owe any money to my vendor
yet until I actually receive them
this is why when the product
comes in we're gonna click on the quick
read button and then we're gonna click
on bill and with the bill we're gonna be
able to receive them so when I click on
my drop-down menu and select Dell Corp
I'm gonna have a drawer here on the
right-hand side letting me know that hey
maybe this bill contains items from this
purchase order and then I will click on
add and I will bring all the information
in there now earlier in the settings we
talked about QuickBooks automatically
remember the last transaction and this
is a part of confusion to a lot of folks
QuickBooks automatically did the same
thing with it last time or we created a
bill from that vendor so we can have to
delete those two lines because
QuickBooks enter that automatically and
this bill is specifically only for this
purchase order but let's also add our
shipping expense that's not here this
area up here from the shipping cost and
let's say we paid $100 for that and then
we'll put the bill number from Microsoft
our vendor and then we click Save and
close now that we've done a bill now we
owe the vendor some money now we have an
actual accounts payable if I go into my
expenses and then vendors tab I'm gonna
see that Microsoft has a balance
I mean Dell has a balance of thirteen
thousand six hundred if I click on Dell
Corp I'm gonna see all the transactions
associated with Dell Corp including this
purchase order and the bill that I have
created now the only one I can make
payments against is the bill itself and
then the payment process is exactly the
same the payment process is exactly the
same I can just click on make payment
here and it will take me into the pay
bill screen which is the same thing as
me clicking on the quick create button
clicking on pay bills and selecting the
bank account and the vendor I want to
pay from the difference is that this
paid bill section allows me to pay
multiple bills at once but in contrast
if I go into my expenses
vendors and click on the actual vendor
and see the bill and I click on make
payment it's the same screen but it's
slightly different because it's just to
pay that one bill so there's actually
two ways to pay the bill one is you'll
find the bill and pay it directly from
there or two you click on the pay bills
window that allows you to pay multiple
bills at once and the process of paying
a bill that's inventory from a purchase
order is the exact same way as paying
any other bill now how this changes or
accounting is the following when I go to
the reports menu and I click on profit
and loss and I click on this year and
click run report here under customer saw
section I'm not gonna see that $13,000
purchase because I was inventory that is
sitting in my balance sheet so when I
click on their reports and then I click
on balance sheet run I'm actually going
to now see an inventory asset of
thirteen thousand five hundred and
that's not going to move away from my
balance sheet until I actually sell the
product that's how inventory works now
what I'm gonna do is I'm gonna leave
this balance sheet up and then I'm gonna
right click up here on the tab in my
chrome I'm gonna right click on that and
click on duplicate and this goes back at
the very beginning when I said you
should use Chrome it's because of this
feature so I'm gonna click on duplicate
and I have two tabs I have one tab in
which I'm gonna have my balance sheet
I'm gonna click on zoom' so it looks a
little bit closer and then on the next
tab I'm gonna do a profit and loss
report so I'm gonna click on reports and
then click on profit & loss
and we'll have that up there so now we
have my profit & loss in one tab I have
my balance sheet in another tab perfect
let me right click up here and click on
duplicate and then I'm gonna go into
[Music]
create an invoice and how this is gonna
be different now what I'm going to show
you is let me close that what I'm going
to show you is the effects of inventory
when I Cree
an invoice so right now I have in my
balance sheet as of the six which is
today state that I'm recording this I
have thirteen thousand dollars in
inventory and then on my income
statement or in my profit and loss I
don't have any large sales in here I
mean I have the sales that I have before
but I don't have the sales of that
inventory yet so I'm gonna come in in
invoice and I'm gonna create a
transaction on the six and let's say I'm
gonna sell three of those servers to XYZ
health Corp so i selling that customer
i'm gonna select the product down here
select the server i'm gonna sell them
three of them and this is a ten thousand
dollar sale and i'm gonna click on well
actually before i do that real quick
back in the income statement i don't
have any sales between January 1st and
the six notice enough zero sales some
cost but no sales right so I'm running
at a big negative here and if I go in my
balance sheet
I have thirteen thousand five hundred
dollars in inventory so I want to go
back into my invoice and then I'm gonna
click on save and close so I made the
sale so now that I go back into my
profit and loss report notice that my
sales are ten thousand five hundred when
I go into my balance sheet noticed that
let me run report and refresh that
notice that my inventory is down now to
fifty four hundred and that's how
inventory works when you buy it he goes
in the balance sheet and it waits for
you to sell it and once you sell it
you're gonna see it in your profit and
loss report as both a sale and a cost
okay and then now I'm I'm not as bad and
negative as I was before after that sale
so that's why I wanted to show you on
the inventory part an inventory is a
very important piece of accounting if
your company manages inventory and
that's one of the major features that
quickbooks online plus has that more
expensive edition has now let's talk
about budgets real quick i'm gonna click
on the gear menu
on the top right and I'm going to click
on budgeting as I mentioned before this
is only on that plus edition so
inventory and budgeting those two main
features are on the plus addition I'm
going to click on add budget and we're
gonna create a budget for for 2018 let's
call this one 2018 budget and we'll do
interval let's say monthly that's good
prefilled data now let's do know they're
in no subdivision okay so let's say that
our budget for January ok that's good
let's click on next so I bought the for
January on computer sales was let's say
15,000 on part sales was 2,000 on
shipping it was 100 on training it was
let's say 2,500 and nothing else on the
income side let's take a look at the
cost side so let's say on the computer
sold our budget was 10,000 is an expense
side on parts let's say it was 500 and
shipping it was 50 I don't subcontractor
trainers let's say it was 1250 perfect
let's scroll down let's say for
advertising or marketing our budget was
a thousand for bank fees was a hundred
for insurance was 500 for this course it
is faster and it's called down to
utilities was 300 ok that's not a full
budget but I just want to kind of show
you illustrate what's going on so I
click on save here and I'll close that
and then I'm gonna go into reports and
do budget versus actual and it's
actually pretty neat it's one of the
most essential things of managing a
business let me do it just for this
month so we'll just select January only
that way we can kind of see what's going
on in January and we click on run report
perfect so now we see that our budget
for sales was 11 thousand of this
category sorry I was 15,000 and we did
11 thousand so we are you know 79%
from hidden budget we are three thousand
dollars in this case over budget like we
haven't solved enough so we're negative
over budget in this case so this tells
me exactly what's going on in terms of
what my target was versus what where I'm
actually are and obviously I'm halfway
through the month so hopefully by the
end of the month I hit that target and
you can actually set a target or a
budget for every income every expense
category and compare him on the screen
extremely powerful report extremely
powerful practice to do budgeting for
your business now let's do a couple of
more expenses and let's talk about
matching expenses with customers or
projects or job costing so let's say for
example I'm gonna I paid with with an
expense I pay with a credit card
some parts for a project so let's say I
went to Amazon and I bought some let's
say some some parts for projects I went
to Amazon and then on the account type
let's say I used this was some job
supplies and then down here where it
says client this is one of those other
major features that quickbooks online
plus has that third level at third
edition i'm gonna say that you know i
spent one hundred and fifty dollars on
job supplies specifically for xyc health
court and i'll show you why this is
important i'm gonna hit save and close
and then i'm gonna run the profit and
loss by client so I'm gonna click on
reports I'm gonna click on let's see
profit and loss by client there it is I
can search it in there and notice that I
have my sales for Health Corp I have my
cost of goods sold and I also have my
job supplies so if you want to do
budgets if you want to manage inventory
if you want to manage or see reports of
expenses by customer or a job then you
definitely want to take a look at that
third version of QuickBooks that the
plus Edition but if you don't need any
of those three I think I think the
essentials will work
for you I'm gonna click back in
dashboard and I think that was you know
if I wanted to make kind of a
comprehensive complete walkthrough I
know I left out payroll okay I would
definitely tell you what watch a
different video for that I left out
sales tax
definitely watch a different video for
that and I left out online banking those
three are sort of their own mini world
and you want to watch a completely
different video for that but this entire
video you saw should be pretty complete
and get you up and running now the last
piece is get your accountant involved
very important if you have an accountant
if you're a business owner and you have
an accounting professional and you work
hand in hand get your accountant
involved if you click on the my
accountant tab on the left side of the
screen it will actually recommend you to
either search for an accountant so you
can click here where it says find a pro
for help and you can put your zip code
whatever it happens to be let's say your
zip code is three three three three one
that's where I am and you're gonna see a
list of all certified QuickBooks Pro
advisors some some of us are CPAs some
are not you're gonna see a whole bunch
of people and you know you wanna you
want to contact that accountant you know
call them email them see if they're the
right fit for your business and then
once you have an accountant that uses
QuickBooks Online let me click back in
in my accountant here and I'm gonna add
them into their account so we're gonna
do it Hector at qbk accounting comm and
I'm gonna go ahead and invite my
accountant that way so if you actually
put your accountants email the same
email your accountant uses for
quickbooks online and you click on
invite your accountant will now get an
email invitation and then once they
accept it they can actually see
everything you're seeing so if they
support you with QuickBooks they can see
if you're doing it right doing it wrong
hopefully your accountant does training
as well again if you don't have an
accountant or someone to help you with
your QuickBooks that's what I'm here for
this is why I started here and made such
a long video for
you you know to gain trust on someone to
to hire to help you alongside with this
and this video is also being posted in
my in my course page so if you're
watching this because you bought a
course trying to sell your my accounting
services I'm just just saying if you're
a small business owner you want to have
an accountant by your side one the knows
QuickBooks one that the loves QuickBooks
Online as much as I do to help you be
successful so I hope this long video was
good if you if you watched the whole
thing
I certainly appreciate it and then check
out the channel for other videos similar
to this thank you