You’ll use different screens depending on the reason for the payment.
Incoming payments are good. That is, if they’re recorded in the right place. There are many reasons why a customer might pay you, and it’s critical that you enter payments on the correct QuickBooks form.
QuickBooks training classes cover these issues in depth, but here are three of the most common situations and their proper places.
You’ve received payment:
- To settle charges on one or more invoices. Here, you would use the Receive Payments screen. Open the Customers menu and select Receive Payments (or click the Receive Payments link on the home page). This window will open:
You record payments on invoices in this window.
Fill in the top part of the form. QuickBooks will have displayed any open invoices in the grid below. If all invoices are not paid in full, payment will be applied beginning with the oldest invoice. You can change this by checking and unchecking boxes. If a partial payment is remitted, you must indicate whether to regard this as an underpayment or write off the extra amount by checking a box under UNDERPAYMENT.
- To record a payment that was made simultaneously with the sale so that no invoice is needed. This should be done with a sales receipt. Click Create Sales Receipts on the home page (or Customers | Enter Sales Receipts). Fill in the required information.
You would issue a sales receipt for items that were paid for immediately, by whatever method.
- To document a partial payment or advance that was made at the time the invoice is generated or before. In this situation, you would record a payment item that would subtract the amount paid from the invoice total. Go to the Lists menu and select Item List. Open the drop-down Item menu in the lower left and click New. Select Type and click Payment. Create an Item name that describes it and a Description. Select a method for depositing such payments (group with undeposited funds or deposit to another account). Once you save the item, you can select it from the drop-down list of items when you invoice, and enter the payment amount in the Rate field. QuickBooks will understand this and deal with it appropriately.
You can set up a payment item to record payments made on a sale prior to or at the time the invoice is generated.
Because there are numerous other situations that you’ll face as customers submit payments to you, enrolling in a QuickBooks course is the best way to make sure these become a natural part of your workflow. Applying payments inaccurately will have a negative impact on taxes and reports and cash flow, so you want to be sure to get it right.