Chapter

Chapter 2
2

Page ref.

Managing Revenue 31
Chapter

2 Objectives
1. Set up customer records in the Customer:Job list
2. Record Sales Receipts
3. Use the Undeposited Funds account to track your cash
receipts
4. Record Invoices and Payments from customers
5. Record bank deposits of cash, check, and credit card
receipts
6. Process customer returns and credits
7. Write off customer invoices (record bad debts)
8. Create and print customer statements
Page ref.
9. Assess finance charges
10. Create Sales Reports 31
Chapter

2 Tracking Company Sales

1. Sales Receipt
 Used for cash customers (pay by cash, check or
credit card at time of sale)
 Tracks detailed information about each sale
 For a cash register, use the register tape (z-total)
each day and create one Sales Receipt that
summarizes the sales for the day
2. Invoice
 Used for Credit Customers (pay on a date after Page ref.
the sale date)
31
 Tracks detailed information about each sale
Chapter

2 Steps in the Sales Process

Cash Customers (pay by cash,
Credit Customers (pay on a date after
check or credit card at time of
the sale date)
sale)
Business
Transaction
QuickBooks Accounting QuickBooks
Accounting Entry
Transaction Entry Transaction

Increase (debit)
Increase (debit)
Undeposited
Recording a Accounts Receivable,
Funds, increase
Sale increase (credit) income
(credit) income
account.
account.

Receiving Decrease (credit)

Money in No additional action is required on Accounts Receivable,
Payment of an the sales form increase (debit)
Invoice Undeposited Funds.
Decrease (credit)
Decrease (credit) Page ref.
Depositing Undeposited
Undeposited Funds,
Money in the Funds, increase
increase (debit) bank
Bank (debit) bank
Account.
Account. 33
Chapter

2
Objectives

• Set up customer records in

the Customer:Job list
Chapter

2 Setting Up Customers
1. For each of your
customers, create
a record in the
Customer:Job
List
2. Select the Lists
menu and then
select
Customer:Job
List or press Page ref.

CTRL+J 35
Chapter
Job Costing
2
1. QuickBooks tracks jobs in addition to
customers
2. For each customer in the Customer:Job List,
you can create one or more jobs
3. The Customer:Job field shows the Customer
name first, followed by a colon (:) and then
the job name
4. This helps you track income and expenses on
each Job, so that you can create reports Page ref.

showing detailed or summarized information 42

about each Job
Chapter

2
Objective

2. Record Sales Receipts

Chapter

2 Recording Sales Receipts

1. When customers
pay at the time of
the sale by cash,
check, or credit
card, create a
Sales Receipt Enter the name of the customer here, or
choose an existing customer from the

transaction list by clicking the down-arrow

2. Select the
Customers menu,
and then select Page ref.

Enter Sales 43
Receipts
Chapter

2
Objective

3. Use the Undeposited

Funds account to track
your cash receipts
Chapter

2 Recording Undeposited Funds

1. When you record Sales Receipts,
QuickBooks gives you two choices
 Group with other Undeposited Funds (default –
like a cash drawer)

 Deposit the funds to one of your bank accounts

2. You should use Group with other
Undeposited Funds option since it makes
reconciliation of bank accounts easier
3. Later, when you make your deposits, you’ll Page ref.

group all of the funds from several sales into 49

one deposit in the bank
Chapter

2
Objective

4. Record Invoices and

Payments from
customers
Chapter

2 Creating Invoices
1. Use Invoices to
record sales to Select the

your credit customer name

from the drop-
down list.
customers
2. Select the
Customers menu
and then select
Create Invoices
Page ref.

50
Chapter
Receiving Payments from
2
Customers
1. Receiving Payments by Check
2. Handling Partial Payments
3. Receiving Payments by Credit Card
4. Where Do the Payments Go?
5. Preferences for Applying Payments
6. Recording Customer Discounts
Page ref.

57
Chapter

2 Receiving Payments by Check

1. To record
payments from
credit customers
for invoices, use
Receive Payments
option
2. Select the
Customers menu,
and then select Page ref.

Receive Payments 57
Chapter

2 Handling Partial Payments

1. If a customer pays only a portion of an Invoice
 you should record the payment using Receive Payments
function
 Apply the partial payment to the appropriate Invoice
 The Invoice will remain open for the unpaid amount
2. The next time you use the Receive Payments
function for that customer, the Invoice will show the
remaining amount due
3. You can record additional payments to the Invoice
in the same way as before Page ref.

60
Chapter
Receiving Payments by Credit
2
Card
1. Select the
Customers menu,
and then select
Receive Payments
2. Enter the Credit
Card payment
method, credit card
number and Exp
date Page ref.

60
Chapter

2 Where Do the Payments Go?

1. Receiving payments
 reduces the balance in Accounts Receivable
 increases the balance in Undeposited Funds
2. Payments in Bank Account
 If you selected the Deposit to option in the
Receive Payments window (something that is not
recommended), QuickBooks will increase your
bank balance when you receive payments
 If you selected Group with other undeposited
funds option, then you must use Make Deposits
function in order to have your payments show up
Page ref.
in your bank account (and reduce Undeposited
Funds) 62
Chapter
Preferences for Applying
2
Payments
1. As soon as you enter the customer name at the top of
the Receive Payments window and press TAB,
QuickBooks displays all of the open Invoices for that
customer in the lower section of the window
2. Automatically Apply Payments setting in Sales &
Customers Company Preferences allows QuickBooks
to match the payment with invoices automatically

Page ref.
By default, QuickBooks applies the payment to the oldest Invoice. You change
the invoice to which the payment applies by removing the checkmark in the left
column and selecting another invoice from the list.
62
Chapter

2 Recording Customer Discounts

1. If the customer takes
advantage of the discount
you offer on your invoices,
you’ll need to reduce the
amount due by the
discount percentage
2. To apply the discount to
this Invoice, click Set
Discount on the left side of
the Receive Payments
window
3. QuickBooks automatically
calculates a suggested
discount based on the
terms on the customer’s Page ref.
Invoice, you can override
this amount if necessary 63
Chapter

2
Objective

5. Record bank deposits of

cash, check, and credit
card receipts
Chapter

2 Making Bank Deposits

1. To ensure that your bank reconciliations go
smoothly, you should always deposit your
checks and cash separately from your credit
card payments using the following:
 Depositing Checks and Cash
 Holding Cash Back from Deposits
 Printing Deposit Slips
 Depositing Credit Card Payments
Page ref.

66
Chapter

2 Depositing Checks and Cash

1. Select the Banking menu
and then select Make
Deposits
2. Since you have funds
stored in the
Undeposited Funds
account, QuickBooks
displays the Payments to
Deposit window
3. Select Cash and Check
from the View Payment
Method Type drop-down
list
4. In the Make Deposits
window, select the bank Page ref.
account where payments
will be deposited 67
Chapter
Holding Cash Back from
2
Deposits
1. To hold back cash from deposits
 Fill in the bottom part of the deposit slip indicating the
account to which you want to post the cash
 If you’re splitting the deposit between two different bank
accounts, you could enter the other bank account and
amount here
 If you routinely hold back funds from your deposits and use
them for several different purchases, you may want to set
up a new QuickBooks bank account called Petty Cash and
enter that account in the Cash back goes to field
 The Petty Cash account is not really a bank account, but
Page ref.
it’s an account where you can track all your cash
expenditures 70
Chapter

2 Printing Deposit Slips

1. QuickBooks can print deposit slips on preprinted deposit
slips
2. To make this feature work for you, you’ll need to order
preprinted deposit slips that match the QuickBooks
format
3. Display the most recent deposit transaction by selecting
the Banking menu and then selecting Make Deposits
4. Click Print on the Make Deposits window

Page ref.

70
Chapter
Depositing Credit Card
2
Payments
1. Select the Banking menu, and then select Make
Deposits. The Payments to Deposit window opens
2. Click in the left column on the line to select the
Credit Card receipt , then click OK
3. The Make Deposits window opens
4. If your credit card processing company (or your
bank) charges a discount fee on each credit card
deposit (rather than monthly), enter a transaction for
discount fee using QuickMath
5. QuickMath is a feature that helps you add, subtract, Page ref.
multiply, or divide in any QuickBooks Amount field
73
Chapter

2
Objective

6. Process customer
returns and credits
Chapter
Recording Customer Returns
2
and Credits
1. Use QuickBooks Credit
Memos for the following
situations:
 cancellation of an order
that has already been
invoiced
 return of merchandise
from a customer
 credit-on-account for a
customer
 making a refund to a
customer
2. Select the Customers
menu and then select Page ref.
Create Credit
Memos/Refunds 76
Chapter

2 Customer Open Balance Report

1. Select the
customer:job in
the Customer:Job
list
2. Click Reports
button at the
bottom
3. Select Open
Balance Report
option for the
selected
customer:Job Page ref.

78
Chapter
Applying a Credit Memo to an
2
Invoice
1. To apply the Credit Memo to the open Invoice
 Select the Customers menu and then select Receive
Payments.
 Select Customer:Job from the list
 Disregard the Date field
 DO NOT enter an amount in the Amount field
 Verify that the Show discount and credit information
box is already selected.
 Select the Invoice (do not click the first column)
 Click Set Credits button and verify that QuickBooks
applied the Credit Memo to Invoice
 Click Save & Close to apply the Credit Memo to the Page ref.
Invoice
79
Chapter

2 Refunding Customers By Check

1. Select the Customers menu and then select Create Credit
Memos/Refunds.
2. Fill in the Credit Memo to match the returned items and
any restocking fee, if applicable
3. To create the refund check, click the Check Refund icon
4. QuickBooks automatically opens the Write Checks
window and creates a refund check which is already filled
out
5. Print the check by clicking the Print icon
6. Click Save & Close to record the check
7. Press ESC to close the Create Credit Memos/Refunds
window Page ref.
8. QuickBooks recorded the Credit Memo when you
recorded the check 82
Chapter
Refunding Customers By Credit
2 Card
1. Create a new credit card Payment item in the Item
list for the credit card used in refund
2. Create a Credit Memo using the same items that
were originally invoiced to ensure QuickBooks
credits back the original sales Items correctly
3. Add a final line on the credit memo using the
Payment item, in the RATE column, enter the total
amount of the credit as a negative number which
will zero out the Total on the Credit Memo
4. Verify that the total on the credit memo is zero, Page ref.
then click Save & Close to record the transaction
82
Chapter

2
Objective

7. Write off customer

invoices (record bad
debts)
Chapter

2 Writing Off a Bad Debt

1. If an Invoice becomes uncollectible, you’ll need to
write off the debt by creating a credit memo (using a
Bad Debt Item) and then applying the credit memo
to the open invoice
2. Bad Debt is an Other Charge Item linked to Bad
Debts expense
3. Fill out the Credit Memo using the Bad Debt item,
rate being the invoice total
4. Click Save & Close to record the Credit Memo
5. Apply this credit memo to the original invoice using Page ref.
Receive Payments and Set Credits
89
Chapter

2
Objective

8. Create and print

customer statements
Chapter

2 Creating Customer Statements

1. QuickBooks customer statements provide a
summary of the activity for an accounts receivable
customer during the period you specify
2. In a statement, you can show either all of the
customer’s accounts receivable activity or just the
transactions that are currently open
3. Select the Customers menu and then select Create
Statements
4. Enter the date, statement period, select customers
and other relevant options
5. Click Preview button to review the statements in Page ref.
Print Preview window
6. Print the statements and then close 92
Chapter

2
Objective

9. Assess finance charges

Chapter

2 Assessing Finance Charges

1. When a customer is late in paying an invoice, you
can assess finance charges
2. To set up your finance charge settings
 Click Assess Finance Charges on the Create Statements window
 Click Settings on the Assess Finance Charges window to display
your finance charge settings
 Enter Assessment Date
 Select the customers to be charged
 Review the finance charge amount automatically calculated by
QuickBooks based on your Annual Interest Rate field of the
finance charge Company Preference
Page ref.
 You can override the finance charge amount
 Click Assess Charges to record the finance charges 93
 Click Preview to see the finance charges in your statements
Chapter

2
Objective

10. Create Sales Reports

Chapter
Sales by Customer Summary
2 Report
1. Select the Reports menu, then select Sales,
and then select Sales by Customer
Summary

Page ref.

96
Chapter

2 Sales by Item Report

1. Select the Reports menu, then select Sales,
and then select Sales by Item Summary

Page ref.

96
Chapter

2 Summary of Key Points

1. Set up customer records in the Customer:Job list
2. Record Sales Receipts
3. Use the Undeposited Funds account to track your cash
receipts
4. Record Invoices and Payments from customers
5. Record bank deposits of cash, check, and credit card
receipts
6. Process customer returns and credits
7. Write off customer invoices (record bad debts)
8. Create and print customer statements
9. Assess finance charges
Page ref.
10. Create Sales Reports
99