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Best billing format for client for Accounting

what's up everybody in this video I'm going to teach you how to do bookkeeping for a trucking company I have no idea how long this is going to be but I'm going to take you literally start to finish I'm going to do an entire year the entire year of 2022 bookkeeping for a trucking company I'm going to use my Trucking Company it's a real company that I had I'm going to use the real transactions that I had in my checking account and my credit card I'm gonna go step by step how to set up the account in QuickBooks how to categorize the transactions how to reconcile everything generate the financial statements literally step by step and I'm making this video because I want to teach you how to do bookkeeping so you might be a trucking company owner and I'm going to teach you how to do bookkeeping or maybe you're a bookkeeper trying to start a bookkeeping business and this is going to be perfect training for you on how to do bookkeeping with QuickBooks all right this is going to be a long video let's not waste any more time let's jump right into it okay so this is my Quickbooks account and this is for my bookkeeping business Harrisburg bookkeeping so what you're going to do in the top right hand corner of your QuickBooks account and this is if you have a bookkeeping business you're going to add the client by clicking that button in the top right hand corner add the client and then whatever their name is so their business name for this particular Company Route 20 we'll say PC Route 20 trucking company and we'll say Route 20 at gmail.com and then we'll say the phone number is 717-448-5675 it's a random phone number that I made up okay so if you have a bookkeeping business here's how you add a client to your QuickBooks account so you just need their business name their email address and their phone number okay now for the subscription you can do a pro advisor discount or you can do Direct Discount or you can do revenue revenue share with the pro advisor discount account they get a 30 discount for the life of the subscription but QuickBooks Will Bill you as the bookkeeping business owner if they choose to Bill your client who is the trucking company owner now with this Direct Discount your the trucking company business owner is paying for it and you pass through a 30 discount for the next 12 months so for the first 12 months they get a 12 30 discount but if you build a firm if you build the bookkeeping business owner the 30 discount is for the life of the subscription or you can do a revenue share and you as the bookkeeper will receive 30 percent of the amount billed to your client for the first 12 months so we'll do Revenue share it doesn't matter I'm not actually setting up an account you have three options you have four options Simple Start Essentials plus Advanced I always start everybody at Essentials I think that's the best QuickBooks program we're not going to do payroll but you can sign up for payroll if you want and I never check this box I always make the business owner the primary admin so that's it just click save and now we have created a QuickBooks subscription for your client now your client the email address that you submitted whenever you add this client that email address will receive an invitation from QuickBooks it's very important that your client take that email and log in because they have their own separate QuickBooks login account so you as the bookkeeper have your own account and your client has their own account okay so now that we've created the account now we just need to log in to their QuickBooks account so now we are in the trucking company QuickBooks account and as soon as you log in they're probably going to ask you a couple questions none of these really matter a whole lot the legal business name is Route 20 TC whatever it is you can leave the industry blank you can leave this blank just click next if you want or fill in the industry it doesn't really matter it's important and if it's a sole prop or a partnership or a corporation identify what type of business it is it should be pretty obvious provide services you know you either sell products or you provide services and then you can skip all this just click done and you can move on now the first thing I recommend everybody do every single time is connect your bank account so the very first thing you need to do is go over to banking on the left hand side and if yours if your QuickBooks looks different than mine click the gear icon in the top right hand corner up here it might say switch to accountant view so if it doesn't say switch to business view then go ahead and click this button and it'll switch you to accountant View and then your screen will look exactly the same as mine okay so go to banking this is the first thing I always do you need to connect your accounts so click on banking click on connect account and here is where you are going to choose the bank so for my trucking company I used Orrstown okay type in the username and password password click on sign in go through whatever security features there might be QuickBooks pretty much always asks for some type of two-factor authentication so if you're logging into your client's business account make sure that whatever phone number or email address you have access to it or you have access to your client so that they can give you the code enter in the code click on continue and then now QuickBooks is connecting to your business checking account so if you have multiple accounts then click on whichever account you want to connect and then this is really important here we're going to select a date to pull transactions from so in this example I'm doing all of the bookkeeping for 2022 if you were just doing the bookie bookkeeping for 2023 then maybe you would just choose this year but I'm going to choose last year and now this is important choose the account type so if this is a credit card obviously credit card but this is a checking account so we will choose check-in and then you can name it whatever you want I typically like to name it um you know Orrstown check-in sometimes you can include like the last four digits of the account number or if you only have one checking account you can just name it checking account it really doesn't matter how you name it as long as it makes sense to you okay now the money is coming in the transactions are coming in so this is just a mirror image of your bank account it's just pulling in the details of your bank so you don't actually have the ability to move or transfer any money through your bank account by using QuickBooks QuickBooks is simply connecting the transaction details and pulling in the data okay so you can link another account so in this example we're going to link an American Express credit card and every account is different so it might not look exactly like this and you might need to ask your client to help you enter in their credentials but this is a really important step to getting your bank accounts and your credit cards connected that way you don't have to do manual data entry because that would literally take forever so you want to pull in these transactions and once again we're doing for the entire year of 2022 so choose the account choose the date and then click next this is a credit card so we have the account type that's correct and then you can name it whatever you want Amex credit card now QuickBooks once again connecting to the credit card pulling in the transaction details this is going to make the entire year of bookkeeping much more simple okay so now we have all of these transactions we have all the details from the transactions in our QuickBooks Bank feed and I will show you real quick if you're not able to link the accounts directly you can click on this down over right here you can upload from files so you can upload a CSV file or a Qbo file you can download a Qbo file directly from your bank every bank is different so there is no one way to do it you're going to have to work with your bank on downloading the transaction details from the bank or you can download them into an Excel file you just need to make sure that it's formatted correctly so you need to have four columns you need to have the date and in this order date description money spent money received have those four columns and then you can upload your CSV file and import your transaction data that way oftentimes if you're doing an entire year of bookkeeping you will need to do this because most accounts only pull data from the last 90 days so if you need to pull data for the entire year you might need to log into the bank or credit card account directly export the data and then import it manually into QuickBooks okay now we have over 600 transactions that need to be categorized and I am about to do all of these transactions for the sake of time I might not do every single one but I am at least going to show you how to do the majority of this bookkeeping so this is about to be a long video very dry but if you're a business owner or a bookkeeper this is about to be extremely helpful I'm going to teach you how to do bookkeeping for a trucking company and if you have a different company that you want me to do this tutorial for like a different industry let me know in the comments if you have a software company or a construction company or a real estate investor or a restaurant or a marketing agency any industry you want I will create a tutorial for that specific industry and also if you need help with your bookkeeping or starting your business I have a link in the description use that link you can schedule a one-on-one consultation with me I'm already mentoring three different people on how to start a bookkeeping business in less than 30 days with no experience I'm teaching everybody exactly what I've learned over the past three years that way you can Fast Track and start and grow your successful bookkeeping business okay so the first thing I do is I click this little gear icon right here and I choose to show 300 transactions that just makes it easier for me to see the transactions and let's go ahead and sort by description so this is going to make it easy to categorize transactions in bulk now this is my company so I know all of the answers to my questions but if you are a bookkeeper working for somebody else you're going to have a ton of questions so for this example I'm just going to act like I know all of the answers but if there's ever a transaction that you don't know about like let's say for example on February 17 2022 you see here account transfer PSECU you're like what is that I don't know so you're going to have to ask your client what this is so create an Excel spreadsheet or open up an email and just simply write down the bank transaction detail and say hey on February 17th you transferred 278.80 and the bank memo says this this what was that transaction you're going to have to do that every single time you have a question never make stuff up never take shortcuts don't incorrectly categorize things just to save time and move quickly always try to get the right answer and you typically need two things whenever you're trying to categorize a transaction you need to know who did you pay who's the vendor and what's the category and we don't really have any categories right now but I'm going to show you how to create categories how to create vendors that way you can accurately do all of your bookkeeping so right off the bat I know for example this was owner's pay so anytime you transfer money from your business checking account to your personal checking account that is an equity transaction that's owner's pay so we don't have it here so I'm gonna go add new account type we're going to choose equity and then the detail type QuickBooks gives you a bunch of options and we're going to choose owners equity and we can see here s corporations use owner's equity to show the cumulative net income or loss of their business as of the beginning of the fiscal year we're going to choose partner distributions for this one and we can just name it owner's pay and then once you have the account name created click save and close and then you can create a vendor I generally always recommend create a vendor except sometimes whenever it's owner's pay I won't add a vendor so just click add okay now you can see here QuickBooks does something really cool if you have two accounts and they're transferring money back and forth to each other QuickBooks will automatically pick up on that transfer so you can see here that these are all transfers from my checking account paying off my credit card and QuickBooks automatically picks up on that so you can select all of these transactions once we have all of these transactions selected all the ones that have this green paired to another transaction we can just click accept now QuickBooks has automatically matched the transfer from the checking account to the credit card so we categorized it on both sides it makes it so easy but QuickBooks did not pick up on these five these right here because you can see it's one thousand and one thousand so this was confusing for QuickBooks because it's the exact same amount so they weren't sure what was going on here so we're going to have to manually we can select all three of these and we can update and we know that they all went to American Express so we can click on the transaction type and say it was a transfer and the category is Amex credit card so this is telling QuickBooks that we are transferring money from the checking account to the AmEx credit card account and I can see here that it happened in February and March and now we can go back to the AmEx account okay so now we have gone to the American Express credit card account on the bank feed and we can see here that we have these three transactions that were received from the checking account but it's really important that we click on this transaction because we've already categorized it on the checking account side so now we need to click on find match so we'll click find a match and then we can see here that we transferred money and it shows up here so this is a transaction that's already been categorized on the checking account side and we just need to match the transaction on the credit card side so we'll we'll match that click save it's really important that you don't add it twice because that's going to mess up your book so you need to match transactions that have already been added on one side now we're just going to do the same thing for these two transactions just double check make sure the date lines up March 2nd March 3rd as long as it's within one or two days that looks like a match you can see here the other transfer was from February 28th but that's probably not the map so we'll do March 3rd I I noticed that credit cards always receive the money one day before it actually leaves the checking account so it's always going to show up on the credit card account one to two days before it shows up on the checking account okay now let's go back to the checking account okay now we just have these small amounts 38 cents but then also the same day we have 33 and 5 cents so I know that this was just a bank verification so these transactions really don't even matter but I like to include every single transaction so I will update this and I will just categorize this as Bank charges it makes no difference because it's the exact same amount coming in and going out so it will have a net effect of zero but go to expenses and we need to create a new category called Bank charges save and close and apply and accept so we just categorized all three of those transactions as Bank deposits now we have this transfer to Loan account so once again we can highlight all of these transactions we can click update transaction type we can do expense and I know that I have a loan with Orrstown bank so I'm going to create a new vendor called Orrstown Bank really important check up here make sure that the contact type is correct whether it's a vendor or a customer company name you can add as much details as you want but for now we're just going to add Orrstown bank and I know for example this was the trailer loan for my semi truck now you're probably not going to know this so you're going to have to ask your client but if you're the business owner you probably already know this is a long-term liability notes payable we can just call it trailer loan you can call it whatever you want just make sure that you have the account type as long-term liability so now this is just a transfer from your checking account to your loan account so this transaction in and of itself is not going to show up on your profit or loss statement it's not going to be an expense it's a balance sheet transaction it's just a transfer from your checking account to your loan account we will need to split the interest and the principal on that transfer I'm not going to go over those details right now just for the sake of time but just know anytime you pay off a loan you need to separate the interest and the principles okay now this is paying off my Chase credit card once again for the sake of time I did not connect my Chase credit card so in this example I will show you you can you actually don't technically need to itemize your credit card transactions if you don't want to as long as everything that you're using that credit card for is a business expense then we could technically just categorize these transfers from the checking account to the credit card as an expense in and of itself so this makes your bookkeeping a lot easier a lot faster but a lot less accurate I never recommend doing it but if you really want to do it a great example is if you're using the credit card for the same thing over and over again like let's just say for example I was always using my Chase card to pay my insurance bill then we could use the the Chase card here we'll name the vendor Chase credit card just because I always recommend that you have a vendor for every single transaction and then we can actually label this category as insurance so this isn't completely accurate because on the other side of this transaction there was a credit card that was actually paying Progressive for the insurance so this is not the actual insurance payment this is simply us paying off the credit card but I know that this credit card was used exclusively for insurance so we could technically just categorize this transfer as the expense and not even worry about itemizing the credit card once again don't recommend doing this but it's just for example if you want to do it you technically probably could do it wouldn't recommend doing it but I just wanted to show you how to do it okay now this is money received and I can see here that it was received from Harrisburg bookkeeping and I know that that was owner's investment so typically whenever you receive money it's one of three things either income alone or owner's investment so I like to differentiate between owner's pay and owner's investments we're going to create a new category equity and we're going to call it contributions owners investors I'm not quite sure why it's showing up as partner distributions and partner contributions this is not a partnership I I would actually maybe just call it owner's equity the detail type really isn't super important what is important is that you get the account type right and you get the name that makes the most sense this is technically owner's investment because I'm the owner and I put money into my business it's really important that you don't categorize this as income if you incorrectly categorize a loan or owner's investment as income that means you're gonna have to pay taxes on that income so you want to avoid incorrectly categorizing money received super important okay now another cool thing so we see here all this bill paid Alex so I know Alex was my driver but just in case maybe and this is sorted alphabetically but let's just say for example we want to make sure that we capture all of the transactions that went to Alex we can type in Alex right here we can search for Alex and now these are all of the transactions that went to Alex so we can just select all of these we can click update we know this was an expense we know the payee was Alex add new now if this was your actual books you're going to want to make sure you add in all these details so first and last so not a company this is important not the company but first name because this is a person okay Alex Jones so not a company but a person if you were paying the company make sure you say that it's a company but since this is a person we're going to say Alex Jones you can add his email address you can add his mailing address you can add an attachment really important if he's a 10 99 contractor right here add in his social security number and check this box track payments for 10.99 that way whenever you run your report at the end of the year you can run your report for 1099s and you can actually file and send your 1099s directly through QuickBooks makes it so super simple okay so Alex Jones and then I don't think we have a category for that so now we're going to add a new category he was my driver so he's it's an expense um we can call it cost of Labor or we can call it driver or you can call it independent contractor or you can call it contractor labor it really doesn't matter what you call it as long as you're consistent and as long as it makes sense so driver independent contractor contractor labor all of those are good categories for your driver if you're paying him as an independent contractor getting a 1099 okay now you can see here that's 16 transactions that we just categorized with the click of a couple buttons so that's why it's really simple to use QuickBooks online with the bank feed to do a bulk number of transactions all at once here is another driver Alvin once again you can just search Alvin and QuickBooks is automatically pulling up this information because I used ACH direct deposit straight from my checking account and I paid these drivers so this information is already in the bank details of my transaction so I'm able to see because I use the ACH direct deposit I can see who I paid now if you're giving people checks or paying people with PayPal or venmo or Zell it might not necessarily give the person who you're paying it might not give their information on the bank details so you might have a couple extra steps like if you're paying people the check you're gonna have to look at every single individual check to find out who did you pay that makes this process a lot more difficult that's why I always recommend setup Ace CH direct deposit now this is another driver we'll just say Alvin Jones again and then this is contractor labor here's a good example so here's what the bank detail looks like so if we click on the individual transaction we can see here all of the bank details bill paid Carl Shipman he was my dispatcher so I'm going to search for Carl just to make sure we get all of the transactions going to Carl and I paid him every single week pretty consistently you can see there are 49 transactions in 2022 so almost every single week we can update that expense we have to create a new payee so every single time you're adding a new payee go ahead and create that make sure you get their W-9 if they are a 1099 contractor get their W-9 that way you can pay them properly and that way you can give them a 1099 at the end of the year Carl Shipman and now out he was also kind of like an independent contractor but he was my dispatcher and because it's the trucking company because that's a very specific expense to a trucking company I'm going to create a new category just for dispatcher so you could technically just lump that together with your driver and just label it all independent contractor or contractor labor but I'm going to differentiate between my driver and my dispatcher so I'm going to call that a dispatcher category all right once again we have here bill paid Harrisburg bookkeeping so this was just another transfer from uh from one business to another business so this is an equity transfer owner's pay has nothing to do with my revenue or my expenses just because we are transferring money from one business to another business that I own so that's the same concept as transferring money from your business account to your personal account you can also transfer money from your business account to another business account just categorize it as owner's pay okay now all of these transfers here to what's called CDL Labor Management they were my staffing agency so I would actually just because I know what this was I would treat this differently and I would split this transaction so I'm not going to do it for every single one just for the sake of time but I'm going to show you one example because we have two things going on in this one transaction so we can split the transaction and we're going to say that we paid CDL Labor Management add them as a company now we have two categories here so we have driver and then we also have staffing agency fees because they charged me not only for the cost of driving but they up charged me on the staffing agency fees so I'm going to add a new category and they gave me an invoice every week so I would know exactly how much it was but just for this example I'm going to say that it was eighteen hundred dollars for drop for the actual driver and then an up charge of the remainder of five hundred and three dollars and seventy one cents and then if I were you I would add an attachment so if you got an invoice from your staffing agency or from your repairman or from your insurance company you can add an attachment to every single transaction so this is how you split a transaction between two separate categories so if I look at my p l i will see this one two thousand three hundred dollars split between driver and staffing agency fees two separate line items on the profit and loss statement for the sake of time I'm just going to categorize all of these as driver so it's getting a little bit redundant now but expense payee category simple as that all right now we have Fleet core funding so for this example I'm let's just say maybe I'm not entirely sure what this means so I can just highlight Fleet core funding open up a new new tab and and if I don't know what Fleet core funding is then I can do a quick Google search and then you can go to the businesses website you can find out who it was but for this example I know who this was this was Fuelman so another company Fuelman and this was vehicle fuel this was fuel for my truck so if you are not a trucking company you're probably going to categorize this differently but for a trucking company I categorize vehicle fuel as supplies and materials but if you just have like a marketing agency and you go to the gas station to fill up fuel for your car then that would be a completely different idea of a transaction but for a trucking company since our industry is transportation and trucks and fuel this is supplies and materials for my trucks so we're going to say Fuelman vehicle fuel we're going to go ahead and add that and now this is the easiest fastest way to do it once again I recommend mend if you are doing your bookkeeping for your own business or if you have a client and they want you to attach documents to individual transactions that is probably a smart idea so for Fuelman whenever I did my bookkeeping in real life in real time every single week I got an invoice from Fuelman so I would be doing my bookkeeping in real time and I would be attaching that invoice to every single transaction but for this example I'm not going to do it for every transaction for the sake of time I just want to show you the the best way to do your bookkeeping as quickly as possible so here we can select all of these transactions and we can double check the payee and the category all looks accurate and we just click accept just like that we've categorized 19 transactions as vehicle fuel so you can see here as long as a business has some level of consistency the bookkeeping can get really pretty simple especially whenever you're doing a large number of transactions like in entire year of a cleanup for bookkeeping okay now all of this business Mobile deposit this was just checks that were deposited into my account and these might be different for you or your client but for this example I'm pretty confident that all these mobile deposits were just owner's investment but it might be services and sales so let's say every Mobile deposit is income so we're going to categorize that as sales income we're just going to sales deposit I don't necessarily give a customer for every bank deposit I only necessarily do a vendor for every expense but if it's a bank deposit I just categorize it as sales you can get a lot more detailed with categorizing your sales by creating sales receipts and invoices that is a whole extra layer of complexity for your bookkeeping and that takes a lot more time so if your client wants you to create invoices and create sales receipts you're going to want to charge them a lot more to do their bookkeeping okay here we have so similar to my Chase credit card I also had a credit card so we're just going to search here for so this is a good example where the not all of the credit cards showed up in order like for example this Mobile like alphabetically did not show up in order with so that's why sometimes I like to search for the keywords in the bank details and that pulls up all the transactions that way I can highlight all of them click update and once again I would recommend that you itemize every single credit card you have but for the sake of time we will just say that this was all we'll just call it repairs and maintenance we're going to add a new category for expense repair and maintenance apply and accept Okay now these are all of my deposits from my factoring company so I used tafs as my fact company now I did a journal entry for every deposit from my factoring company but if you just want to quickly recognize your income from your factoring company then you can just look for all of the deposits from your factoring company as you can see here there were quite a few of them we can select all of these deposits from Trans Am financial and then we can just click update and then we can say it's a deposit and this was all sales now keep in mind you are going to want to recognize the factoring fee because you just received the net after the factory company took out the fees so if you actually ran a load for a thousand dollars you probably only got nine hundred and fifty dollars so you want to recognize that three or four percent factoring fee that way your top line revenue matches potentially the 1099s that you're going to get same concept Applause if you're working with stripe you might have received a payment and then stripe took out that three percent payment processing fee to process the credit card so you want to make sure that you capture all of the top line revenue and then take out the the factoring fees or the stripe fees or the QuickBooks Payment Processing fees okay now this was also income so we're going to categorize that as sales and you can see here that it's just been 10 minutes 20 minutes and we've almost categorized all of my transactions from 2022 I had a pretty small trucking company I just had one truck and one driver so pretty small operation but you can see here you can get a lot done pretty quickly okay this is going to be a good example we're going to look at this deposit here from January 14th for forty five thousand dollars now I remember that was a truck loan so forty five thousand dollars so we're gonna go here account type long-term liabilities the same thing we did with the trailer loan but this is money that we received so you can see it's really important that you don't classify that as income because you're going to have to pay taxes if you incorrectly categorize that as income so if you received a large sum of money as a loan make sure you categorize that as a long-term liability here is another example so this twenty five thousand dollars that was for my trailer loan so we're going to categorize that as the trailer loan and we're just transferring money from the trailer loan to the checking account so now we're increasing the balance of the trailer loan while simultaneously increasing the balance of our checking account through cash through a transfer of cash and then this here 33 000 this is whenever I actually bought the trailer so whenever you whenever you buy an asset you need to categorize it correctly so it's not an expense it's a fixed asset so here we have the account type is fixed asset and then it's machinery and equipment and we're going to call it trailer if you have multiple trailers you can give them numbers or unit numbers it doesn't matter but for this example we're just going to call the trailer so now hour transferring money from our checking account to an asset account so if you look at our balance sheet now we're going to have an asset of a trailer for thirty three thousand five hundred and eleven dollars this is super important I see people incorrectly categorizing their loans and their assets all the time here is the other payment this is fifty seven thousand dollars this is whenever I bought my truck so we'll say truck zero zero one and this is a fixed asset and it's a vehicle the name is truck zero zero one so now we have on our books a trailer and a truck as an asset and then the way you capture the expense of the asset is you run depreciation you're going to run depreciation with your tax accountant or your CPA there are a dozen different ways to run depreciation you can use Section 179 you can use bonus depreciation you can use straight line depreciation there are a ton of different ways to capture depreciation make sure you talk to your tax accountant or your CPA about that okay here we have if the tax so every single every quarter I think I'm not sure what this is but it's Pennsylvania if the tax so whatever I paid my ift attacks I actually just categorized that as fuel so I said that I paid the PA Department of Revenue because that's who you're paying for the ift attacks make sure it's a vendor but I didn't categorize it as taxes or licenses I just categorized it as vehicle fuel okay I'm gonna stop showing you guys the checking account now I'm going to move to the credit card account for the sake of time I don't think I'm gonna have enough time and I'm sure nobody is even still watching this video but I really want to show you guys kind of start to finish how you would do real bookkeeping for a real trucking company so this is going to be so credit cards are a lot more straightforward typically than checking accounts because checking accounts you have assets you have income you have expenses you have loans you have owners investment owners pay but credit cards are usually pretty straightforward forward is usually just a bunch of expenses so for here we have Amazon so if you're doing this bookkeeping for a client you might want to ask them hey what did you buy at Amazon but I'm just going to assume that all of my Amazon expenses were job supplies job supplies is a pretty broad category I use it for all of my clients typically anything that's not office supplies I would categorize that as job supplies and now you can be as detailed as you want so we're doing an entire year of bookkeeping right now so time is of the essence but if you're doing your bookkeeping in real time by all means be as detailed as you'd like with the the bank detail the memo adding attachments the more detail you provide the better here's another good example Easy Pass so we have here 33 transactions for Easy Pass so just type in the vendor and then for this I like to do a category called parking and toll the detail type really doesn't matter just make sure the name makes sense and you're consistent so every time you pay Easy Pass make sure you categorize that as parking and tolls or whatever you call it okay now I know for example that I went to loves a lot so I'm going to type in the word loves and I'm going to so we probably did a couple things here we probably got scales for three dollars and fifty cents 13 maybe parking maybe a shower so anything under a hundred dollars I'm going to say with job supplies because it more than likely was I'm not going to create a separate category for scales or a separate category for showers or a separate maybe a separate category for parking but in general I'm just going to categorize all of this as job supplies if it's less than twenty dollars don't get hung up on it I try to keep my chart of accounts clean my profit and loss statement clean I don't like to have ton of separate categories and then we have here a hundred and forty dollars so this might have been repairs and mating this might have been fuel so we're gonna we're gonna say that this with fuel so you can see here we can pay the same person but we can categorize it differently so it's important that you look at the receipt or you talk to your driver or you talk to your client figure out what they're buying and then finally we're going to say that this one was repairs and maintenance just because it's one thousand six hundred dollars probably not fuel probably not job supplies we probably got some sort of repairs done on the truck at a Love's truck stop okay so for the sake of time like I said probably no one's still watching this but if you are now we're done categorizing transactions now I'm going to show you two more things so I always tell people bookkeeping is a three-step process you got to categorize your transactions which we just got done doing I didn't do all of them but you get you get the idea you can probably do it on your own now we need to reconcile account so in QuickBooks go to the bottom left-hand corner and click on reconcile and I recommend that you reconcile your checking accounts your credit card accounts and your loan accounts so in this reconcile tab here we're just going to choose the account that we want to reconcile so like I said bank accounts credit card accounts loan accounts I'm just going to show you the checking account right here for example so you're going to want to look at your bank statement and do this every single month so look at the bank statement so for this example we're going to look at the January bank statement I'm not going to give real numbers because I don't have time just look at the ending balance in January 2022 and write down the eight the ending date of that bank statement so look at the balance and the date of the bank statement and then click Start reconciling now QuickBooks is going to pull every single transaction from January 2022 and it's going to add up all the deposits subtract out all the payments so we have here here's the beginning balance of the checking account minus all of the payments plus all of the deposits should equal the statement ending balance in this example it doesn't because I didn't do everything but here's how you reconcile your accounts here's how you make sure everything penny for Penny is perfectly accurate once everything is accurate and reconciled you're going to see a zero dollar difference and you just click done or click save and then your accounts are reconciled now the final thing I'm going to show you this is your financial statement so like I said bookkeeping three-step process categorize transactions reconcile your accounts now you're going to want to generate your financial statements so we're going to look at two things here we're going to look at your balance sheet now your balance sheet has your assets like your bank account your trailer your truck your credit card isn't as a liability so after assets we have liabilities your credit card accounts or liabilities your loans are liability so the truck loan the trailer loan the credit card is all liabilities and then we have Equity your opening balance Equity is maybe if you start doing bookkeeping in 2022 and you you but you did business in 2021 and you have a checking account with ten thousand dollars in it you're going to recognize an opening balance Equity of that checking account of ten thousand dollars on January 1st 2022 owner's investment personal money I put into my business owners pay business money that I take out and pay myself personally or pay another business just an equity transfer retained earnings is your net income from the year before and net income is obviously the difference between your revenue and your expenses in the current year and you can look at your net income on your profit and loss and that takes us to the final financial statement that I'm going to show you you can look at your financial statement on a monthly basis or you can look at it for all the dates you can run the report and you can see here this is the golden ticket financial statement your profit and loss this is shows you what you're going to owe taxes on this shows you your income top line and then all of your expenses you can see here all those categories we made Bank charges and contract labor and insurance and repairs and maintenance that's where all of those categories show up on your profit and loss statement that's why it's important that you accurately categorize things so that it makes sense for the business owner so that they can make informed financial decisions about their business how much money do they make how much money do they lose how much money are they making how much money are they gonna have to pay taxes on that's what everybody wants to know so bookkeeping three-step process categorize transactions reconcile your accounts and then finally generate these financial statements and then this is what you use to file your taxes at the end of the year and this is what you use to give to your bank to apply for a new loan I hope this video was helpful I know it was crazy long if you made it to the end congratulations and let me know if you want me to create tutorials for other Industries I'd be happy to show you how to do bookkeeping for software companies or marketing agencies or construction companies thanks for watching talk to you guys in the next video