Whenever you sell a product or a service to a customer or client, you need to record that transaction on some type of sales form. A Sales form can be an invoice or a sale(cash) receipt. The type of form you use depends on when you expect the payment. If you plan on billing the customer for products or services, and don’t expect payment right away, use an Invoice. When you require payment at the time of the sale, and receive that payment immediately, you would use a sales or cash receipt.
In today’s post we’ll be talking about recording your business sales using QuickBooks.
A QuickBooks invoice shows the customer’s name and address, along with an itemized list of how much the customer owes for products or services. When creating an invoice you can choose from different types of form templates or you can customize your own. For payment at the time you make the sale, you fill out a sales receipt instead. The difference in the invoice vs sales receipt is that the sales receipt will show the payment made. That payment can be made by cash, check or credit card. Like the invoice, the sales receipt includes information about the items or services.
The first thing you need to do before recording sales is to decide on the template you will use. QuickBooks has several different templates depending on the version of QuickBooks you’re using. Search the onscreen help for invoice templates to find out which ones your version offers. Each template will have both an onscreen version and a printed version. The lets you record any sales information you want, but only print what you want your customer or client to see. You can also customize your own sales form and save it for future use. I’m sure we’ll be discussing this in a future post.
To enter an invoice: Click Create Invoices on the home page. Today’s date will be the default, you can change this if necessary. The first time you create an invoice, enter the number you’d like your invoices to start with, after that the next number in sequence will appear automatically. In the template field choose the type you selected to you use. Click the drop down list in the Customer:Job field, all your existing customer and jobs will show up or you can enter a new one at this time. If using an existing customer the billing name, address and other information will be filled in for you.
On the bottom half of the invoice, you list each service or product you sell on its own line, along with the amount the customer owes for the item. In QuickBooks you enter the line items using the Item List. You’ll create your Item List before you start entering sales information. The Item list contains every item that you sell with detailed information on that product or service. This way when you enter an invoice or sales receipt, you only have to enter the name of the item. All the other information will automatically show up for you. Just enter the quantity you sold or the number of hours worked on a project. If you want, you can also change any of the information on the invoice, and it will only change it for this particular invoice. Line items don’t just have to be a product or service, they can be anything you want to list on the invoice. They can be discounts, subtotals, sales tax and more.
QuickBooks totals the invoice for you based on the line items you enter. You can check the invoice or sales receipt before printing or emailing by clicking the Print Preview button at the top right of the screen. QuickBooks will display the invoice as it will look when printed for the customer. Remember you can have both a displayed version and a printed version, so don’t be surprised if something looks a little different then what you see on your entry screen. All sales forms can be saved in pdf format for printing and emailing. You can also email the invoice directly from QuickBooks.
Another option for billing your customer using QuickBooks is to use statement charges. Statements are a good way to bill if your going to accumulate monthly charges before actually billing the customer. Of course statements can also be sent out on a regular basis to remind a customer of unpaid invoices that are due.
You enter statement charges one at a time, as you perform services or sell products to the customer. Statement charges are also good for recurring charges that you bill every month. You can even direct QuickBooks to automatically enter the charges for you. Then when you are ready to bill the customer for these charges, either at the end of the month, or another set time during the month, you print out Billing Statements. The Billing Statement shows the detail of all new charges as well as a previous balance and payments received.
Using Statement charges does have some limitations though. You can’t record sales tax, percentage discounts, payment or group items as separate charges. If you want to bill for these items you have to use an invoice. You can’t group related charges together and subtotal them either. Any charge that is on a billing statement can only represent one item. So you must enter separate charges for each service or product sold. If you want you can enter invoices for all sales and then show the invoice detail on the monthly statements.
Basically it’ll be up to you to decide which billing method works best for your business. You can also enter estimates and then create invoices from those estimates. QuickBooks also supports what are called progress invoices, where you bill the customer for work as it’s completed. A construction contractor would find this useful so that they can bill the customer at different points of completion for the same job. You can also add reimbursable expenses to invoices and time and material.
As you can see there’s alot more to learn about handling your accounts receivable with QuickBooks. We still need to talk about customer deposits and QuickBooks letters and statements that act as reminders to customers of payments that are due. There are reports that you can run that will help you manage your accounts receivable and your business. And we can’t forget that we’ll need to talk about entering customers, jobs and creating item lists. So keep reading and I’ll try to cover everything you need to know. If you don’t see it posted here at Business Darlings you might want to check over at the blog on my website too. If you have any questions, comments, or there’s something you’d like to read about please leave a comment or use the contact page to submit a question or request.
Thanks for reading and have a great weekend!
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