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Working with Bills, Deposits, and Credits in QuickBooks 2015
 
 
 
Working with Bills, Deposits, and Credits in QuickBooks 2015

 

Delete a Bill

To delete a bill, you are going to have to go to the Accounts Payable Register. To locate this, go to Lists>Chart of Accounts, then double click Accounts Payable. 

 

Select the bill you want to delete, as we have done below.

 

Right click, then choose Delete Bill. Confirm that you really want to delete the bill, then it is gone. That simple!

Bill Reminders

QuickBooks can remind you when it is time to pay bills, but you have to let it know that you want it to do that.   Go to Edit>Preferences. Click Reminders on the left, then click the Company Preferences tab. You will see a list of reminders.

 

Skim down to Bills to Pay and set how many days before the bill is due that you want to be reminded.   Just make sure that the Show Summary or Show List option is selected. 

Recording Deposits to Vendors

There may be times when a vendor requests that you pay a deposit up-front before they will ship products to you.   You will want to record those deposits into QuickBooks so that you can apply the deposit to the bill when it arrives.

To record a deposit, go ahead and use the payment method in QuickBooks that you will use to pay the deposit. You can write a check, pay with a credit card, etc.

Under the Expenses tab, choose the Accounts Payable account for the account assigned to the deposit. This way, you are creating a credit for yourself with the vendor in your Accounts Payable account.

Under the Expenses tab, in the first Amount cell, enter the amount you're paying as a deposit.

Click Save & Close. 

When you receive the bill from the vendor, you will apply the credit to the payment, as you will learn to do in this article.

Automatically Applying Discounts and Credits

QuickBooks can handle discounts and credits from vendors for you so that you don't have to worry about it.   All you have to do is set it up so that it is handled automatically.

To do this, go to Edit>Preferences.   Click Bills on the left, then the Company Preferences tab.

 

Put a checkmark in the Automatically Use Credits checkbox.   This means that credits will automatically be applied to a vendor's bill. If you want to choose when credits are applied, do not check this box.

 

If you want QuickBooks to automatically apply discounts, put a checkmark beside Automatically Use Discounts. Then, select the account to track vendor discounts in the Default Discount Account dropdown menu.

Click OK.

Applying Discounts and Credits Manually

To apply discounts manually, go to Vendors>Pay Bills.

Put a checkmark beside the bill that has the discount you want to edit.


 

To apply or edit a discount, click Set Discount, as circled below.

 

You will then see the Discounts and Credit dialogue box.

 

Under the discount tab, enter the discount and assign the discount account. If you do not have a discount account in your chart of accounts, select <New> to create one. If you use an income account as a discount account, the discount will increase the balance of the income account. If you use an expense account, the discount will reduce how much you spend on expenses.

Click Done when you are finished.

To manually apply credits, go to Vendors>Pay Bills, put a checkmark beside the bill, then click the Set Credits button.

 

You will then see the Discounts and Credits dialogue box.

 

Make sure the checkmark is beside the credit you want to apply, then click Done.

 

The credit is applied.

 

Reimbursible Expenses

Reimbursible expenses are simply expenses for which a customer will pay.   If you have to travel on behalf of a customer, a hotel room could be a reimbursable expense. 

In QuickBooks, there are two ways that you can track reimbursible expenses.  

One is as income. QuickBooks will post the expense on a bill that will be recorded to your chosen expense account.   Once you invoice the customer, QuickBooks posts that money as income in an income account. To track reimbursable expenses as income, you will need to set it up in QuickBooks.

The second way is as expense.   You can track reimbursements as expenses, and the expense will be posted on a bill, so that when the customer pays the expense, it posts back to the expense account. Your expense account never looks like it was touched. This way doesn't require you to set up anything in QuickBooks either.

To track reimbursable expenses as income in QuickBooks, go to Edit>Preferences.   Click Time & Expenses on the left, then click the Company Preferences tab.

 

Put a checkmark beside "Track Reimbursed Expenses as Income." 

Click OK.

Now we can go to the chart of accounts and create a reimbursed income account, as well as a new expense account by clicking on the Account button, then selecting New.

Creating the new income account is straightforward.

However, creating the expense account requires an extra step, so we will walk you through the process.

Select Expense as the type of account.

 

Click Continue.

 

Fill out the information about the account.   Make sure you put a checkmark beside Track Reimbursed Expenses in Income Acct., then choose the reimbursable income account you want to assign to the expense account.  

You can only assign an income account to one reimbursable expense account, so you may need to create income subaccounts for different types of reimbursed expenses, such as travel, postage, etc.

NOTE: When you enter bills and mark reimbursable expenses as billable in the Billable column, also use the Memo field to identify the reimbursable expense. That will become the description for the charge on the invoice to your customer. 

Generating Expense Reports

To run expense and Accounts Payable related reports, go to Reports>Vendors & Payables.

Listed below are some different reports that you can generate:

  • A/P Aging Detail shows you every unpaid bill sorted by billing date and grouped into current, 1-30 days overdue, 31-60 days overdue, 61-90 overdue, and more than 90 days overdue.

  • A/P Aging Summary shows the vendors that you owe money, as well as how old the balances are.

  • Vendor Balance Detail shows your bills and payments. They are grouped by vendor.

  • Unpaid Bills Detail shows you the bills due up to today. They are grouped by vendor.

  • Purchases by Vendor Summary shows you the amount spent with each vendor during a specified time period.

  • Purchases by Item Summary shows the quantity and value of purchases. This is shown by item.

  • Open Purchase Orders shows you all open purchase orders.

Creating Invoices
 

Invoices are bills that you send customers. When a customer buys something from you and doesn't pay upon receipt, you bill them by sending an invoice. Creating invoices with QuickBooks is easy. However, there are a few things you need to do before you begin. 

To start with, make sure you have everything set up in QuickBooks. If you added customers, products, etc. during setup then you should be fine. However, if you skipped over those steps, you will need to populate your various lists now. Don't try to take a shortcut and create an invoice without doing these things first. You are going to make more work (and headaches) for yourself if you do.

Creating Product Invoices

This is for a physical product that's sold to a customer.   You can also create invoices for services rendered in QuickBooks; however, it is easier than creating product invoices. If you master product invoices, service invoices will not be a problem for you.  

To create an invoice:

Go to Customers>Create Invoices.  

 
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Choose the template or invoice form you want to use by going to the Template dropdown menu in the upper right hand corner. The default invoice shown to you when you open the Customer Invoices window depends on the type of business you selected when you set up QuickBooks.

 

Go to the Customer: Job field. Select from customer and job from the dropdown menu.

 

Next, you can assign a class to the invoice.   Some businesses use classes to track expenses and income. 

 

Specify a date for the invoice in the Date text box. The date should be in MM/DD/YYYY format. 

 

Enter an invoice number in the Invoice text box:

 

If you need to, you can also change the Bill To address and Ship To address. However, QuickBooks records all shipping addresses that you use, so you may be able to find it in the Ship To dropdown menu.

Now you can also fill in these fields:

  • Input a purchase order number in the P.O. Number text box. 

  • Enter payment terms by selecting the terms from theTerms dropdown menu. 

  • Specify the sales representative in the Rep text box (up to three letters). 

  • Enter the shipping date if it differs from the invoice date. 

  • Now, enter the shipping method . 

  • The Via field is available in Product and Packing Slip templates. This is for the method of shipping. Choose a method or choose <Add New>. 

  • In the F.O.B. text box, enter the F.O.B. point. FOB stands for free-on-board. This is important, even if it doesn't seem that way. The F.O.B. point determines the point that ownership is transferred, who pays the shipping charges, and who incurs the risk if there's damage to the product during shipping.  

If a shipment is F.O.B., ownership transfers to the buyer (your customer) when the order is shipped. This means the customer pays the shipping and holds all the risk if there's damage. Enter the name of the shipping point if this is what you want and where the product ships from is the F.O.B. point. For example, F.O.B. Atlanta. The FOB field is available only in Product and Packing Slip templates.

Entering Line Items on an Invoice

Line items are the products that were sold to the customer.  You will want to enter each item that was sold. Add the appropriate information in each column of the invoice. 

To enter line items, start by moving the cursor to the first row under Quantity/Item Code/Description/Price Each/Amount/Tax. Once you do this, the Item Code field will have a dropdown arrow. 

 

Click on the dropdown menu (the downward arrow) of the first empty row, then choose the item.

QuickBooks will fill in the Description and the Price Each for you based on what you have recorded in your Item list for that product.  

 

Enter the quantity that you have sold, and QuickBooks will adjust the price for you.

 

If a product is taxable, the word Tax will appear in the Tax column to show that it will be taxed. 

 

If you want to make it nontaxable, click the Tax column, then select Non.

If you have enabled price levels, you can change the amount charged for any line item by applying a price level by clicking in the Price Each field, then choosing the price level from the dropdown menu.  

 

If you have already assigned a price level to a customer, the adjusted amount automatically shows up. 

You can also apply discounts in an invoice. However, you enter discounts as line items. If you want to create a discount against multiple or all line items, you must first create a subtotal for those items. Simply use a subtotal item type that you create in your Item list. 

Wrapping Up an Invoice

Once you have all the other information filled out, it is time to finish up the invoice. You will notice that QuickBooks has kept a total for your items including taxes.  

 

In the Online Pay field on the left hand side (shown above), you can see that the pay online feature haven't been turned on.  

 

To turn this feature on, we will have to setup our online payments with QuickBooks by clicking the Turn On link.

To wrap up the invoice, you can also add a customer message, a memo, and enter the customer's tax code.

When you're finished, save the invoice by clicking Save and New if you still want to create more invoices. Or click Save and Close if you are doing creating invoices. 

Invoicing for Time & Expense

You might have customers that don't just buy products from you, so you don't invoice them for just products. Instead, if you use QuickBooks Pro or Premiere, you may invoice them for your time and expenses to complete the job.

In order to be able to bill for time and expenses in QuickBooks, you will have to set it up in your preferences.

To do this, go to Edit>Preferences, then select Time & Expenses on the left. Click on the Company Preferences tab. 

 

If you need to provide invoices that show your costs plus markup, enable this preference by selecting from the following time tracking options:

  • Select Yes to enable time recording on timesheets. These can then be transferred to vendor and employee payment, as well as customer invoices. 

  • First Day of Work Week . Specify the first day of the work week. 

  • Mark All Time Entries as Billable.  This is a new feature. Use it if you list detailed information on vendor or employee time on invoices to customers. 

Next, under the Invoicing Options section, choose your preferences:

  • Create Invoices from a List of Time and Expenses. Select Yes for Do You Track Time. This will enable you to track time on timesheets. This can then be transferred from payment transactions to invoices. 

  • Track Reimbursed Expenses as Income . Put a check in this box if you want costs invoiced to customers counted as income.  

  • Mark All Expenses as Billable . This is also new in QuickBooks. This marks all expense line transactions as billable. If you detail costs on invoices, this is helpful. 

  • Default Markup Percentage is used to define a percentage that's added to an invoice when billing for cost and time.  

  • Default Markup Account is used to select an account for all amounts charged as markup. 

Click OK when you're finished.


To bill for time or expense on an invoice, create the invoice for the specific customer.   If there is billable time or expenses outstanding for that customer, you will see the Billable Time/Costs dialogue box. 

"Select the Outstanding Billable Time and Costs to Add to This Invoice?" will be checked for you. Click OK. 

You will then see the Choose Billable Time and Costs dialogue box. 

Select the time and costs that you want to add to the invoice by selecting the appropriate entries under the Time tab. 

Put a checkmark beside "Print selected time and costs as one invoice item" if you want to just have one line on the invoice that includes all time and expenses. 

Creating Credit Memos

Credit memos are easy ways to correct errors in invoices or to issue refunds to customers. A credit memo is simply a way of giving a customer credit. For example, if your client returned a product, you can issue a credit memo for the price of the product.    

Let's learn how to create and use credit memos.

Below is what a credit memo looks like in QuickBooks:

 

To create a memo, go to Customers>Create Credit Memos/Refunds, or click Refunds & Credits in the Customer section on the Home page. You will then see the window pictured above.

Next, select the customer (and the job if necessary) in the Customer: Job field.

 

You can also select a class for the credit memo.

 

Enter a date, then credit memo number.

 

Next, make sure the customer's address is correct.

 

If the credit memo you are creating will adjust a customer's balance on a purchase order, enter the purchase order (PO) number.

 

Now, you can list line items. List any items the customer is returning. List items in the same way you listed items on the product invoice. 

 

Add sales tax, a customer message, and memo.   Of course, adding a customer message and memo is optional. 

Click Save & New if you want to create another credit memo.

Click Save & Close if you are finished creating credit memos.

NOTE : Whenever you save a credit memo, QuickBooks prompts you to select how you want to apply it. You can retain it as an available credit, give a refund, or apply to an invoice. Select which one you want, then click OK.

Creating Estimates

An estimate is a price quote that you provide to a customer for products or services. It is not a contract or guarantee that your customer will buy it. Instead, you are simply providing your customer a price that they will pay if they choose to do business with you.

Keep in mind that an estimate does not affect your financial records. The amounts listed in the estimate do not affect any of your accounts. An estimate simply quotes a customer a price for a job so the customer can determine if he/she wants to hire you.

To create an estimate, go to Customers>Create Estimates. The window that opens is very much like the invoicing window.

 

Go ahead and fill this out just as you would an invoice.   Again, the difference is that an estimate is not an invoice, and it does not affect your accounts.

Note : You may need to turn the Estimate feature on. To do this, go to Edit>Preferences. Select Jobs & Estimates on the left, then click the Company Preferences tab. Select Yes under "Do you create estimates?"

Convert an Estimate into an Invoice

To turn an estimate into an invoice, select the customer in the Customer center.   You will then see a list of transactions for that customer. Simply double click on the estimate you want to use.

 

Next, click on the Create Invoice button at the top of the window. 

 

If you have specified that you'd like to progress-bill the customer, you will see a dialogue box that asks if you want to invoice the entire estimate or just a part of it.

 

Answer the question, then click OK.  

The invoice will then be created based on your estimate.

 

Create Progress Billing Invoices

Progress billing is simply the act of billing for part of a job. If you have enabled estimates and progress billing in Preferences, you can bill for milestones on a job – or bill for part of the job before the job is finished. 

The important thing to remember when doing this is that progress invoices are invoices that are connected to an estimate for a customer or job. In other words, the customer accepts your estimate, and you use that estimate to bill for milestones.   This means you must have an estimate created first.

To enable progress billing, Go to Edit>Preferences. Select Jobs & Estimates on the left, then click the Company Preferences tab. Check "Yes" under "Do You Do Progress Invoicing?"

 

Once you've made sure that progress billing is enabled, it's time to create the invoice.

To create a progress invoice, go to the Create Invoices window. If any estimates exist, they will be shown in the following dialogue box.

 

Select the estimate that you want to use, then click OK.

 

QuickBooks will then allow you to specify what you want included on the invoice. You can:

  • Create an invoice for the entire estimate

  • Create an invoice for a percentage of the entire estimate

  • Create an invoice for selected items or for different percentages of each item.

We are going to choose to create an invoice for a percentage of the entire estimate.


 

Click OK when you are finished.

An invoice opens. Make sure you use the Progress Invoice template. 

 

Printing Invoices

Of course, printing begins with loading the proper paper into the printer. However, you also have to set up the Invoice Printer on QuickBooks. You can use this for credit memos also.

Go to File>Printer Setup. 

In the Form Name field, select Invoice. 

 

Next, follow these steps:

  • Find the printer that you want to use and select it from the Printer Name dropdown list.

  • If you want, select the printer type.   This is just the type of paper that you are going to use.

  • Now, choose the type of invoice form that you are going to print on: Intuit Preprinted Forms, Blank Paper, or Letterhead. 

 


 

Go ahead and print a test invoice on paper. To do this, click the Align button. When the dialogue box comes up (shown below) click Intuit Product Invoice.

 

Click OK.

 

Now you can fix any alignment problems.

Save your settings by clicking OK.

You are ready to print!  

Print a Single Invoice

If you want to print invoices as you create them, you can click the Print button in the Create Invoices window.

Select Invoice from the dropdown menu.

 

A dialogue box will appear. 

 

Click on the Print button.

Print Batches of Invoices

If you want to print batches of invoices, make sure the checkbox "Print Later" is checked at the top of the Create Invoices window when you create invoices. 

When you are ready to print, click the Print button in the Create Invoices window, then choose Batch.

 

Now, select the invoices that you want to print, then click OK. 

 

Select the invoices that you want to print, then click OK.

 
 
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