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January 29, 2014 / Jessica Connell

Receiving Payment from Customers in QuickBooks

Undoubtedly, there are some QuickBooks tasks that are more enjoyable than others. It’s no fun paying bills, for example, and making collection calls on unpaid invoices can be downright unpleasant.

But you probably don’t mind recording payments after all of your hard work creating products or providing services, sending invoices or statements, and generating reports to make sure you’re on top of it all.

QuickBooks offers more than one way to document customer remittances, and it’s important that you use the right one for the right situation.

Defining the destination


Figure 1: Uncheck the box on the farthest right if you think you may want to direct payments to other accounts sometimes.

Before you begin receiving payments, you need to make sure they will end up in the correct account. The default is an account called Undeposited Funds. To make sure that this setting is correct, open the Edit menu and select Preferences, and click the Company Preferences tab. Use Undeposited Funds as a default deposit to account should have a check mark in the box next to it.

If you think you’ll sometimes want to deposit to a different account, leave the box unchecked. Then every time you record a payment, there will be a Deposit to field on the form. Talk to us if you’re planning to use any account other than Undeposited Funds, as you can run into serious problems down the road if payments are earmarked for the wrong account.

The right tool for the job

Probably the most common type of payment that you’ll process will come in to pay all or part of an invoice or statement that you sent previously.


Figure 2: You’ll record payments on invoices you’ve sent in this window.

To do this, open the Customers menu and select Receive Payments. In the window that opens, click on the arrow in the field next to RECEIVED FROM to display the drop-down list, and choose the correct customer. You’ll see the outstanding balance. Enter the amount of the payment you received in the AMOUNT field and change the date if necessary. Click the arrow in the field next to PMT. METHOD, and then select the type of payment.

If you established a credit card as the default payment method in the customer record, the card number and expiration date will be filled in. If not, or if a check was submitted, enter the information requested.

Any outstanding invoices will appear in a table. Make sure that there’s a check mark in front of the correct one(s). If the customer only made a partial payment, you’ll have to indicate how you want to handle the underpayment. Here are your options:


Figure 3: You can select how to handle partially-paid invoices here.

When you’re done, save the payment.

Instant income

There may be times when you receive payment immediately, at the time your products or services change hands. In these cases, you’ll want to use a sales receipt. Open the Customers menu again and click Enter Sales Receipts.

Select a customer from the drop-down list or add a new one, then fill out the rest of the form like you would an invoice, selecting the items and quantities sold, and indicating the type of payment made (cash, check, credit).


Figure 4: Fill out a sales receipt when payment is received simultaneously with the sale.

Other scenarios

These are the most common methods of receiving payments from customers, and you may never have to do anything other than simple payment-recording and sales receipts.

But occasionally, unusual situations arise that may leave you stumped. For example, a customer may want to make a partial, advance payment before you’ve created an invoice or at the same time you’re entering it. In a case like this, you’ll have to create a payment item so that the money you’ve just received is reflected on the invoice. Or you may get a down payment on a product or service, or even an overpayment.

Let us help you when such situations occur. It’s much easier–and more economical for you–to spend some time with us before you record a puzzling payment than to have us track it down later on. We’ll help ensure that your money makes it to the right destination.

For more tips visit www.PlumCPAs.com

Copyright © 2014 CPA Site Solutions

This information is  for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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