QuickBooks Training Materials – Part 7

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This content is intended for use by ProAdvisors when instructing their clients in the use of QuickBooks Desktop. Last time, we began our study of Money-in processes for QuickBooks Desktop by looking at the Customer Center and the various ribbon tabs on QuickBooks Money-in transactions.

Here, we'll look at some of the various Money-in transactions intended to help bring revenues into the business. 

Depending upon your business, you may sell face-to-face or over-the-phone. You may collect payments at the time of a sale or, you may invoice your customers for products and/or services you provide.

Many times, a sale only occurs following an extended period of quotation, or estimating the costs and revenues associated with the work you conduct or products you sell. 

QuickBooks allows you to use all of these, and several other "modes of sale," depending upon your specific needs. For example, if you make sales that are "paid for" at the time of the sale, you'll generally want to use QuickBooks "Sales Receipts." 

This process tracks the items you sell and the receipt of revenues – all in the same transaction. On the other hand, if you Invoice clients under terms of payment, you'll be using Invoices to post sales on an "accrual basis."

If you quote prices in advance to your customer, you'll want to use QuickBooks Estimates. If you frequently sell items that require time to be manufactured, fabricated or you turnaround and purchase from a distributor, you may want to use Sales Orders for better tracking on what you're building, producing or have on order related to a sale.

If you have recurring customer charges due on a regular basis, like monthly rent, that you generally don't send an invoice, QuickBooks Statement Charges may be the best Money-in transaction for you.

While the forms and entry methods are similar between all of these transaction types, we'll examine each of these in addition to learning examples that will help you become proficient on when and how to use each type.

Using QuickBooks Sales Receipts

A Sales Receipt is the form you use within QuickBooks when you make a sale for which you receive full payment at the time of the sale. Sales receipts can include payments by cash, check or credit card.

When your customers pay in full at the time they receive your service or product, you don't need to track how much they owe you using an Invoice. But you need to record the sale, calculate any associated sales taxes and, typically, print a receipt for the sale. In these cases, you should create a sales receipt.

Note: If you need to track how much a customer owes you or you don't receive full payment at the time of the transaction, don't use a sales receipt. Rather, you should create an invoice, using the process described later in these lessons.

To enter a Sales Receipt:

1. From the Home Page, click Enter Sales Receipt. (As an alternative, go to the Customers menu and click Enter Sales Receipts.)

2. Fill in the top part of the form, including the Customer:Job, Date and Payment Method

3. Click the Template drop-down arrow, then click the sales receipt template you want to use

4. In the bottom part of the form, enter the items purchased

  • In the Item field, choose the item you'd like to add to the sales receipt
  • Enter the quantity in the Quantity column
  • If you're using Units of Measure, QuickBooks will default to the sale U/M for the Item, but you can change it by selecting a different U/M from the drop down
  • Enter the rate or per unit price for this item. If you set this item up with a default rate, it automatically will show on the line, but you can overwrite it
  • Review the amount or extension of the Quantity multiplied by the per unit price
  • Let QuickBooks populate the Tax code for this item automatically, but you can change it by selecting a different tax code from the drop down

5. Once you have entered all the items being purchased, click Print on the toolbar to print the Sales Receipt

  • Optionally, you can select the Print Later checkbox to print the form later or the email later checkbox to email the form later
  • Sales Receipts and other sales forms can be printed, emailed or saved as PDFs by clicking on the drop-down under print or email in the Main tab at the top of the form

6. Save & Close your sales receipt or click the Save & New button to save this sales receipt and open a new blank sale receipt

Practice Exercise: Entering a Sales Receipt

  1. From the Home Page, select Create Sales Receipts; QuickBooks opens the Enter Sales Receipt window
  2. Click in the Customer: Job field, begin typing Lanyard Pool Construction Inc. The more you type, the smaller the list of customer:job names QuickBooks will display. You may click on this customer at any time you identify the correct option. QuickBooks displays the customer’s billing information in the Sold To field.
  3. QuickBooks defaults the transaction date to today unless you've entered and earlier or later date
  4. QuickBooks assigns the next transaction number in the Sale No. field
  5. Click the large Cash button; the dollar bill turns green
  6. In the item field, begin typing White Aggregate Crushed Stone. As with the Customer name, the more characters you type, the narrower the item list becomes until you find the item you're wanting, select it
  7. QuickBooks displays Sales Description in the Description field
  8. Enter 10 in the QTY field
  9. Confirm that the U/M field has defaulted to TN (for ton), if not you can select it from the drop-down options
  10. Confirm that the Rate field reads 120.00
  11. QuickBooks computes the Amount to be 1200.00
  12. Confirm that the Tax field shows Tax 
  13. Select Thank you for your business from the drop-down of the Customer Message field
  14. Click the Save & Close button

Using Sales Receipts for a Sales Summary Record

You also can use a sales receipt to create a summary of sales income and sales tax owed.

Retail businesses may use cash registers or a point-of-sale (POS) system to record sales. Those systems produce register tapes or reports to summarize income and payments by categories.

The Sales Receipt form is good for summarizing these types of sales or any other type of sale you want to summarize by Item.

If a summary sales receipt covers payments by more than one method, like checks and credit card charges, you can show the breakdown by using a different Payment Type Item for each method.

An alternative to getting sales from another system into QuickBooks is to purchase a third-party program that can import the transactions into QuickBooks as invoices or sales receipts. 

Many third-party program POS or similar systems offer QuickBooks integration capabilities. Some are by file exports using a format known as the Intuit Interchange Format (iiF), which can be directly imported into QuickBooks, others offer direct integration, in which the third-party program communicates with QuickBooks via something called the SDK "integrated applications" interface. 

Many QuickBooks ProAdvisors have expertise in the integration of third-party products with QuickBooks.

Using QuickBooks Invoices

When your customers don't pay you in full at the time you provide your service or product, or when they pay in advance, you need to track how much they owe you.

A QuickBooks Invoice is the form you use to charge customers for the products and services they purchase from you. Invoices help you track what your customers owe you (your "accounts receivable").

Invoices list all the details about the sale, including the services you're providing or the products you're selling (your items). Invoices also show the quantity and price of each item. If you need to make adjustments to prices (for example, discounts or markups), invoices allow you to do so.

Remember, if your customers pay in full at the time of purchase, you shouldn't create an invoice. Rather, you should create a sales receipt, described earlier in this lesson.

To create an Invoice:

1. From the Home page, click Create Invoices (Or, you can go to the Customers menu and select, Create Invoices. There are several other ways to open the Create Invoices window).

2. From the Customer:Job drop-down list, enter or choose the name of the customer or job

3. Click the Template drop-down arrow and select the invoice template you want to use

  • If the Billable Time/Costs window pops up, choose whether you wish to add billable time, costs, expenses or items

4. If "terms" have been established for this customer, QuickBooks will default to those terms, but you can change them by selecting different terms from the drop down.

5. In the lower part of the form, enter each of the Items (including the proper quantity) that the customer has purchased.

  • In the Item field, choose the item you'd like to add to the invoice. If you chose to add billable expenses when prompted, these items already will show in this section.
  • Enter the quantity you wish to invoice for in the Quantity column.
  • If you're using Units of Measure, QuickBooks will default to the "sale" U/M for the Item, but you can change it by selecting a different U/M from the drop down.
  • Enter the rate or per unit price for this item. If you set this item up with a default rate, it'll automatically show on the line. You can overwrite it.
  • Review the amount or extension of the Quantity multiplied by the per unit price.
  • Let QuickBooks populate the Tax code for this item automatically. You can change it by selecting a different tax code from the drop down.

6. Click Print on the toolbar to print the invoice now.

  • Optionally, you can select the Print Later checkbox to print the form later or the email later checkbox to email the form later.
  • Invoices and other sales forms can be printed, emailed or saved as PDFs by clicking on the drop-down under print or email in the Main tab at the top of the form.

7. Save & Close your Invoice or click the Save & New button to save this invoice and open a new blank invoice.

Practice Exercise: Entering an Invoice

  1. From the Home Page, select Create Invoices; QuickBooks opens the Enter Invoice window.
  2. Click in the Customer: Job field, begin typing Lee Smith Construction. The more you type, the smaller the list of customer names QuickBooks will display. You may click on this customer at any time you identify the correct option.  QuickBooks displays the customer’s billing information in the Bill To field.
  3. QuickBooks defaults the transaction date to today, unless you have entered and earlier or later date.
  4. QuickBooks assigns the next number in the Invoice No. field
  5. Confirm the SHIP To address
  6. Select Net 30 from the Terms drop down options
  7. Change the SHIIP date field to 3/24/2017
  8. Enter 20 in the QUANTITY field
  9. In the item field, begin typing Yellow Crushed Stone Aggregate. As with the Customer name, the more characters you type, the narrower the item list becomes until you find the item you're wanting, select it.
  10. QuickBooks displays Sales Description in the Description field.
  11. Confirm that the U/M field has defaulted to TN (for ton), if not you can select it from the drop-down options.
  12. Confirm that the Rate field reads 80.00
  13. QuickBooks computes the Amount to be 1600.00.
  14. Confirm that the Tax field shows Tax. 
  15. Select We appreciate your prompt payment from the drop-down of the Customer Message field.
  16. Click the Save & Close button

Using QuickBooks Statement Charges

Another way to record income is through the use of Statement Charges. QuickBooks allows you to create billing statements instead of invoices. Statements work well when you accumulate multiple charges with your customers before requesting payment or who assess a regular monthly charge.

To create Statement Charges:

1. Select Customers, then choose Enter Statement Charges

2. Enter Statement Charges directly into the A/R register for each customer

  • Don't use Statement Charges to track charges subject to sales tax because you cannot add sales tax to a Statement Charge.

3. The customer’s printed statement contains the date, description and amount of each Statement Charge.

  • You can customize the statement to include columns for quantity and rate.

4. To print Statements, select Customers, and then choose Create Statements.

5. When using Statement Charges, all the charges will remain in the current aging bucket until you print a statement.

  • This is because QuickBooks sets the date of expected payment (based on payment terms for the customer) for each new Statement Charge only when the statement is printed.
  • Even if you don’t send the statements, when using Statement Charges, you should print them out or print to a PDF file to set the due date of the Statement Charges, so the aging at the bottom of the statement will be correct.

Next time, we'll look at using QuickBooks Estimates and Sales Orders.

(Note: The Practice Exercises used herein are designed for use with a specific QuickBooks Desktop Sample/Practice file. But ProAdvisors can easily adapt them with just a few changes to Customer Names and Items.)