Now that we know how filtering transfers, and excluding transactions inside of QuickBooks self employed works, let's put all that information together by entering transactions. So we're currently on the transaction screen of QuickBooks self employed. And we can see the last 12 months of transactions. Now, I'd rather eliminate all these months because it can get quite confusing. So I'd rather just narrow things down to items that currently need to be reviewed and entered into QuickBooks self employed. So what we want to do is we want to look at the unreviewed transactions.

So when you first sign into QuickBooks self employed, you land on the homescreen of the homepage rather, on the homepage, it's going to tell you how many Transactions you have that are currently unreviewed inside of QuickBooks self employed. So by looking at this screen, we can tell that we have 20 plus transactions that need to be reviewed. So what you can do is you can just click on review now because what we want to do is we want to go ahead and review all of the transactions that have been uploaded into QuickBooks either via the bank or bank credit card or using an Excel spreadsheet. So we click on review now. Okay, so when we click on review now, it shows us all the transactions inside of QuickBooks self employed that have not yet been reviewed. So there are over 20 transactions.

So the first thing we want to do is we want to start refilling the transactions. Now, you can sort the transaction by date, which I usually prefer to do when I'm inputting transactions into QuickBooks self employed. I usually like to try and start the process by sorting by date, so you can click on this area Where it says date, and then it automatically sorts the transaction by dates. And now you can see, we're starting with September 1, and it ends with September 30. Now if for some reason you would prefer to, to look at transactions alphabetically, you can also do that by clicking on this area. And then it gives you the transactions alphabetically.

So in this case, it starts with W, but you want to start with the first the most recent letter of the alphabet, click it again. And as you can see, now it stops with B and goes down. If you'd rather view transactions by the dollar amounts, you want to review them by the dollar amounts, you can do that as well. By doing the same thing, just click on the amount area and it starts with the highest amounts to the lowest or do you want to start from the lowest amount to the highest click on it again, and then it gives you the lowest amount all the way to the highest dollar amount. As I said, I like to review by dates, we're going to go back to September 1. So each transaction that we're looking at is either going to be a business transaction, a personal transaction or a split transaction.

A split transaction is a transaction that is both business and personal. So we have a way of splitting both transactions within QuickBooks self employed. Now transactions are going to be transfers, they may be income or there may be some type of expense. So the first transaction is a transfer. And let me explain how this works. If you remember during the transfer lesson, I we discussed ways in which to transfer funds within your QuickBooks self employed.

So remember how I said trance transfer could be either a Owners withdrawal and owners investment into the company. So that's where the owner actually deposit some money into the company. It could be a payment for a credit card, or it could be some type of other transfer. If you have two or three different banks connected to your QuickBooks self employed, you can transfer funds from one bank to the next. Well, this first transaction is an actual owner's draw. This is where Jennifer paid herself on September 1 $700.

For this, this is an example of an owner's owner's draw transfer. So how do we handle this transfer? So we're going to click on business. We click on business, we want to make sure that this particular transaction is categorized as a transfer. So you want to go over here where it says category and click on other expenses. We want to recategorize this in To a transfer.

So we're going to click on the show all categories. And you can scroll down to look at all the different categories until you get to transfer. Another way of looking for or finding a transfer is to just type in transfer in the search box, and they have it for now, this is a transfer. Now what I like to do, when I, when I have an issue, when I have a transaction that I may not be certain that I'm going to remember what it was it seen about two or three months from now. Because oftentimes, I can only remember what happens yesterday. So therefore, I need to make sure that I know a week or two weeks or three weeks or a month from now, what this particular transfer was for.

So I want to leave a note to myself to let myself know that this $700 was payments to myself. So you'll just type in whatever note you'd like to whatever you would like to use to remind us Have what this particular transaction was for in this case it was payment to myself and then you can just click on Save. And that's it. So now that transaction has been taken care of. So now you know this is a transfer that was that this is a transfer and it was actually payments to Jennifer. So if you or your accountants are looking at this transfer months from now, both of you will know exactly what the transfer was for because you all you have to do is look within the notes section a unit with payments to your to myself.

So now your accountant knows exactly how to handle this particular transaction. When he's doing it he or she is doing your taxes. The next top transfer is income. So this is an income from Sarah so somebody paid you for a service or a product. So you will click on business and it goes It went directly to the income category, which is correct. So you do nothing else.

Now, you could, if you're not really sure what this particular service was for, or in other words, if you don't think you're going to be sure what it was for weeks or months from now, you can notate put a note down here for yourself for a reminder. And the second one is also income from Charles, that's also business. Club California, I'm going to assume that Club California for $5 and 77 cents is going is a personal expense. I'm not quite sure what it is, but I'm going to assume that it's personal. So we're going to click on personal and this goes directly to the personal section. Now by clicking on personal and by going to a personal account.

This means that this particular transaction will not be used in the profit and loss statement. In other words, this dollar amount that was spent will not be used to determine your overall net profit. It won't be used in your gross income normally show up in your group expenses or rather in your total expenses. It goes straight to personal spending. So here we have a another transfer. So in this case, Jennifer, on September 12, had some bills to pay.

She didn't have enough money in her account to pay these bills. So she needed to invest money into her business. So she did a she transferred $500 from a personal account into her business account. This is called a owners viewpoint an owners investment or owners deposit either one it doesn't really matter if it was $500. So this is also going to be categorized as a transfer, so you go to click on business, click on whatever comes up under category, in this case is income, but we know it's not income. So we want we want to change that to a transfer.

So we click on the income button, we find transfer, click on transfer. And there you have it. Once again, we want to know what this transfer was for Jennifer or her accounts, it may want to know why she transferred money into her business account from her personal account. So we're going to leave a note to say, to cover bills or rather to cover business expenses. So we were looking at this transaction. Six months from now 12 months from now we'll know that it was to cover transactions or rather to cover to cover expenses.

The next transaction is hamazon. I guess it's a play on the words Amazon, they try not to use actual business words. So they just make up their own, which is okay. So in this case, in this case, it's hamazon. So we're going to assume that Amazon is some type of online store, and that Jennifer purchased something for her business from Amazon. So this is a business Oh, no, you know what, let's do this.

Let's make this one a split transaction. So Jennifer purchased an item from Amazon. This transaction was both business and personal. So we're going to split this one out. So in order to split it out, so we're going to click on the split option. And as you can see, QuickBooks self employed automatically split the transaction 5050.

But we don't want to do that. We want to Split it, we want to use a different ratio. So for business purposes, this transaction, the amount for this transaction was $40. So now you can see that now that you have changed the amount, the amount of the business was actually 240 dollars, automatically the personal transaction changes to 3402, which is the total amount of the transaction. So now we split this transaction. So now the business part of this transaction, the $40 is going to go into an actual account and it's going to go into a business expense account.

So don't want to use other business expense. Let's say that she used this or rather the fishy purchase. Let's see what we want to stay let's say she pushes let's look at all the categories so you can pick something. So from how many She purchased not furniture, that wouldn't be a fishy purchase. See what our options here are uniform, fairly fishy purchase uniforms from from hamazon. So we'll click on uniforms.

So now this $40 is going to go onto the profit and loss statement on that uniforms as an expense, whereas the personal spending is just going to go to personal and it will not be used to calculate her net income. So now we can go ahead and save this. Here we have another payments to Jennifer on 915. Jennifer once again paid herself. So this is going to be a transfer. It's going to be a it's going to be an owner's draw, which we're going to categorize as a transfer.

So we want to click to click other business expenses, this is going to be categorized as a transfer, we find the transfer key transfer option. And there you have it transferred. Okay, ghost peppers. This is a business expense. And I think it's a restaurant $81 and 31 cents, we're going to click on business. And it's meals and entertainment.

Now just FYI, when it comes to expenses for meals and entertainment, the only time you can take an expense or include meals and expenses on your profit and loss statements, is if you took out a client if it's a business meal, a business meal would mean that you took a client out, even lunch, breakfast or dinner and you paid for the meal that is deductible because it's a business meal. Also, if you take your employees out or you take your workers out to dinner breakfast or lunch. That is that's also a deductible expense. So you can include that on your profit and loss statement. However, if you personally go out to get something to eat, that is not a deductible expense. So therefore, if this happened to be an expense that you made based upon based upon taking yourself out to lunch, dinner or breakfast, it will be categorized as personal and not business.

So because this is a business expense and it was an expense that was incurred from you taking it taken out a client for lunch, we will categorize this under meals and entertainment. Now, one thing that I think is very, very crucial when it comes to especially when it comes to meals and entertainment because the IRS, they tend to look look very closely to This type of expense because it's very easy to abuse. So it's important that you leave a note to yourself to remind yourself who you took out what day, what time, and all the necessary information and also to upload the receipts because you definitely want to keep the receipts for meals and entertainment because if you ever get audited by the IRS, they are going to want to see the receipts, they're going to want to see the time they want, they're going to want to see the purpose.

They want you to explain the purpose of the lunch and who you took out when, what day just all those intricate details. So the receipt is going to give you the information as it relates to when you took the client out the dates and all of that. The notes section is going to help you record who you took out. So let's say you took out took a client or you took the fake tom tom to lunch See if your latest marketing project, you want to know what the launch was for. And that's it. So that way when you hand your file to your accountant, they have this information.

But even more important, you have this information. So if the IRS ever questions any of your meal and entertainment expenses, you can just quickly look at the notes to see. Okay, let me see why I took this client out. What date did I take this client out? Where did I take this client, and you're going to upload the receipt right in this area by just clicking on browse and then picking whatever file the receipts on and then adding it to the adding it to the transaction. Once all that's done, you can click Save Now we have an Intuit transaction, this is a business transaction as well, this is probably just going to be fees fees that you paid into it for processing transactions.

So if you have a processing fee of some sort, so you click on business, and then it automatically for some reason, sometimes it puts transactions into other business expenses. I really, really try to avoid this category because it's so it's so ambiguous, it's not clear. I want to know what those expenses are for. And the IRS also would like to know what the expenses are for. Usually when you have too many other business expenses, or too many miscellaneous business expenses, or expenses, expenses are not very descriptive. It's a red flag for an IRS audit.

So just try to categorize your transactions as clearly as possible. So intuitively, we know that that's some type of processing fee. So we're going to look for a processing fee. Let's see what we have. Okay, so fees, we can click these. And then we can further categorize this into transaction processing fees because that's what Intuit fees will probably be.

You click on that and then there you go. Another item is gas. Okay, so this is a gas transaction. I'm going to assume that it's gas as in petrol as in fuel, I should say gas is in fuel, which would be for your automobile. Now, as a sole proprietor, who reports expenses on a schedule C, you cannot deduct gasoline on your profit and loss statement. gasoline is considered to be a personal expense, at least until your accountant gets a hold of your expenses, and then he can recategorize that into some type of business expense percentage wise if need be.

That's a whole different story. So, for right now, let's just focus on categorizing gasoline using QuickBooks self employed. And because we're using QuickBooks self employed, we're going to assume or not, we're going to see we're going to categorize gasoline as a personal expenditure. So you're going to click on personal. Now, keep in mind, even if you're driving around town, and you're going on business trips, and you happen to put gas in your car, you still don't want to categorize it on your profit and loss statements as a business expense. At the end of the year.

When you're doing your taxes. your accountant is going to make that determination, because he's going to determine whether or not you're going to take standard a standard deduction for your automobile or you're going to take actual expenses if you are taking or using actual expenses. For your automobile expenses, then your accountant is then going to ask you for the receipts of information on all the gasoline that you have purchased through the year. And you're keeping track of it here because you're going to have some type of information showing you how much you actually spent on gasoline through the air. At that point, you will give him or her that information. And then they will use that information to do what they need to do on your tax return.

But as you but for you who is just recording your transactions, you don't put it on your profit and loss statement. You just you just throw it in there with personal spending. And as I said at the end of the year, let your accountant figure out what to do with it. The next transaction is blue fart donuts. So blue font donuts $5 and 98 cents we're going to assume that that was a personal span. So you decided one morning that you know you wanted to cheat yourself to donut see when to donut shop purchase Some donuts and purchase some coffee for yourself.

So because it's a personal spend, not a business spend in other words, you didn't take somebody out to the donut shop or rather you didn't need to take a client out to the donut shop nor did you take out an employee to donut shop and spend $45 and 98 cents on them that morning. Instead you purchased doughnuts and coffee for yourself for $5 and 98 cents so then that's going to go under personal and not business. So here you would click on personal. Okay. The next item would be credit card payments. Okay, so if you notice we have two opposing transactions.

We have a credit card payments for $1,964 in one sense. We also have a payments from the checking account for the exact same amount. So what happens here is this amount of $1,964, in one sense was paid from the checking accounts paid to the credit card account. So if you can remember that during the transfer lesson I talked about one of the types of transfers is credit card payments. So this is going to be a transfer. So we're going to click on business and it automatically categorizes it as a credit card payments, and the type of transaction is a transfer.

Nothing else to do here. Now we're going to go down to the banking part of it. This is where we actually made the credit car payment. So we're going to click on business. And once again, everything has been done for us, it's a transfer. And of course, the category is credit card payments because both of these transactions have to do with credit card payments.

So they happened. Now remember I said that the actual payments for a credit card does not go on the profit and loss statement, because it doesn't. It's just a transfer between your business account and your credit card. But also remember they said to you, even though the credit card payment is not going onto your profit and loss statement, all of the transactions that you made using your credit card is still going to be part of your profit and loss statement. So for example, this look at this ghost peppers again, so here you go again, taking out another class. to lunch, this time you spent $70 and 42 cents to take your client out to lunch, you use your credit card to make this payment.

So this $70 and 42 cents is part of this entire payments of $1,964. So remember, remember I said that if you if you make this payment as part of your profit and loss, you're going to be double dipping because this $70 and 42 cents, which is part of this 1964 is going to go on your profit and loss statement. So this was a business transaction for $70 and 42 cents, we're going to click on business and automatically goes into the correct accounts, which is meals and entertainment. So there you have it. Now this is going to show up on your profit and loss statement and reduce your total gross income. The next transaction we Have is another pet owners investment by Jennifer.

So Jennifer invested $2,000 into her business on September 30. So this is going to be we're going to click on business. Under category, it shows us income, but it's not income to make sure you go in and click on income and change this to a transfer. That's what it is. It's a transfer. So there you have it.

Now what was this $2,000 school? Well, let's say let's say Jennifer wanted to purchase something for her business, but didn't have enough money in her bank account to make this purchase. So she invested $2,000 into her business to purchase this particular item. We want to make a notation that we don't get confused six months from now when we're looking to see Okay, what what $2,000 I don't remember, positive $2,000 even if I did, I should have had that number was I sure as heck don't remember what it was for. So we're going to leave a note to remind Jennifer that the $2,000 that she invested in her company was to purchase a computer. Let's say he purchased a computer.

So Jennifer purchased a computer from office. depot. Okay, so we know we now know what that was for. Now she can go ahead and put the receipts she can connect them or rather upload the receipts to this transaction. It would be a good idea to do that. So once again, to attach a receipt you just click on Browse You pick your file that the receipts in, and then you click on it and then click Open.

And it automatically uploads into QuickBooks self employed. And then you press save. And then the last transaction is rent. So this is this $1,034 and 73 cents is rent payments. So of course rent payments is business, we're going to click on business for that. And then here it says rent and lease, it says home office.

But no, this is not for a home office. This is for an actual rental of a location that we actually rent for our business outside of our home. So you're going to click on that tab, I mean wants to change that to just regular rent. So you can click on show categories. And you can just keep going looking looking for and usually, when you click on, show up categories is usually because you're not really sure you might not be really sure where the transaction is supposed to live. So you're trying to make the determination by looking at all of your options.

But if you already know what you want, and you know that, that it's in here, you can just go into the search box. And in this case, we're looking for ramps just type in our CI and they haven't rent in lease, we're going to pick one in leased. Rather than using the rent and lease home office, we're going to change that. So now you have the business payments for rent, going to a rent and leased accounts. Now if you remember, in the excluded transactions lesson, we talked about excluding transactions from QuickBooks self employed. Now because QuickBooks self employed does not have a delete function, but instead it has an excluded option.

I'm going to show you how to exclude an a transaction from QuickBooks self employed. Now, there are different reasons why you may want to exclude this transaction, it could be because that transaction is a duplicate, sometimes an item may come in twice, whereas it shouldn't have. And if that does happen, you can exclude it from from from all of your transactions, it could be that that particular transaction may have been returned, it could be returned purchase, it could have been a customer refund. I mean that just different reasons why a transaction may want to be or rather different reasons why you may want to exclude a transaction in QuickBooks self employed. So just think of it this way. That's a signal that comes in that you know, you you would you would want to delete.

For some reason that transaction is just not correct, and you know that he needs to be deleted and easily removed from QuickBooks self employed. So in this case, you would exclusion, or rather the exclude function. So this is a transaction from NetBeans, wherever that is, I have no idea what that is. But we want to exclude this want to exclude it from QuickBooks self employed. So we just click on this key that says, exclude this transaction. When you click on exclude this transaction, and you click on Save, it gets rid of the transaction.

So this transaction is now excluded from any of your reports. So you won't see it in your profit and loss statement. You won't see it in your currency anywhere, it's gone. It's a way of deleting, but without actually deleting. Now, let's say you accidentally exclude an item in QuickBooks self employed and you want to bring it back when you say Oh, you know what, oops, I should have excluded that that actually was a business transaction. You can go back and on on excluded by just clicking on it.

Excluded. And now see what happened. When you click on excluded, you get your business personal and split options again. So now you can say, no, this wasn't supposed to be excluded. This was actually a business transaction. So now you can click on business.

And it's gone into your business transactions and wants to get it takes you to other expenses, which I hate. So let's just pick something else has to say what's the some type of really, really cheap insurance, whatever that would be for $10? I'm not sure but that's good enough. So it's going to be for insurance. Business Insurance. Yeah, we'll just pick that one.

Okay, so yeah, business insurance. So that's what it was. So again, to exclude, you click on the down arrow, and you click on exclude and stays and then it's excluded. exclude click on exclude and everything goes back to normal. So in this lesson, we learned how to categorize transactions in QuickBooks self employed. We also learned how to filter, transfer and exclude transactions from QuickBooks self employed.

In the next lesson, you're going to learn how to automate your accounting using the rules feature. I'll see you in the next lesson.