QuickBooks desktop receive payments window is the proper place top record receiving advanced payments or prepayments form customer, for invoice or jobs that will, be done later. You could consider this a job deposit in your QuickBooks customer records. This method, method 1 for customer advanced payments, makes sure that the customer’s balance is always correct, and that each customer’s current balance reflects what is really owed to or from the customer. Unfortunately, if you choose this method, your accounts receivable account in the chart of accounts will be off by the amount of the advance payments until the job is done and the invoice is sent out. This amount of pre-paid job deposit is technically unearned income until the job is finished or the goods have been given. If you need to make formal financial statements before the invoice is made, then your accountant can make a normal accounting adjustment in order to show accurate reports. Then you can reverse it and continue to do your bookkeeping normally from that point forward. This allows the customer reports to help you make the customers balance and possible collections. This method is simply receiving payment in the same window that you receive invoice payments from. Just make sure that it is not applied to any open invoices. When you save it, you will get a “payment credit” message pop up that states that you can print a credit memo or just save a s a credit to the customer balance to apply later. You can apply the advanced payment later when you actually make the invoice. From the ribbon of the invoice, you can click “apply credits”. The entire transaction cycle you will have accurate customer reports.
After making a credit memo in QuickBooks desktop, sometimes you do not know what invoice the customer wants to apply the credit to. If you will not know until later what invoice you will apply the credit to, then you can “retain as an available credit” and apply the credit later. You can see the available credits on the open invoice report. You can apply the credit to an invoice from either the receive payment window or from the ribbon of the credit memo or the ribbon of an invoice that you can click to apply available credits. You can also click form the ribbon of the actual credit memo and click “apply to an invoice”. Then the credit will disappear from the open invoice report as it decreases the remaining invoice balance.
This YouTube QuickBooks desktop instructional training tutorial course will show you how to use the advanced features of accounts receivable when managing your customer transactions and client data. Advanced transactions that you may need to make with your customers can be: returns, credits, discounts or any kind of customer deposit or pre-payment (like a down payment for a job) are higher level transactions in the receivables section of QuickBooks desktop. Every possible type of transaction you can have with your customers is shown here as part of this playlist course. If you follow these methods, all of your client’s balances and customer records will be correct to the last detail. Ultimately, you will use the reports in accounts receivable and the customer statements to reconcile with your customers to ensure accuracy in accounts receivable.
The full Advanced Receivables desktop course is here……
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Intro to desktop receivables is here if you missed anything………………
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