Episode 6 – Polymath Video Tutorial Series: Changes to QuickBooks Online – Receive Payment

 receive paymentThis episode in the Polymath Video Tutorial Series: Changes to QuickBooks Online covers receiving payments against existing invoices.  How do you create receive payment in QuickBooks Online?  When do you receive a payment instead of creating a sales receipt?

 

 

Make sure to check out all the other great videos in the Polymath QuickBooks Tutorial Series:

Transcript:

Welcome viewers to this Polymath Bookkeeping Instruction video. I am Ingrid Edstrom of Polymath LLC and Ashland Bookkeeping Services. If you’re following along with this series you just learned how to create an invoice. This video will show you how to receive payment against the invoice that you just created. If you’re just joining us for the first time, make sure to check out all of the videos in this series for great tips and tutorials for using QuickBooks on-line to run your business.

[expand title=”Continue reading…”]Now that you’ve created an invoice it is time to collect money from your client. Keep in mind that the steps that we’re about to go through for accepting payments are only for invoices. When you create a sales receipt that transaction includes the payment that you just received. Creating both a payment and a sales receipt duplicates the money coming into your business in QuickBooks. You’ve created an invoice for the work that you’ve done and sent it off to your customer. They sent you their payment and now you need to record that into QuickBooks before you can take their money to the bank.

To find open invoices you can go to the customers page. You can simply search for the name of your customer or you can sort the customers to show only customers with an open balance. Either way, once you go to a specific customer’s page you can review the invoices available to be paid for that client. There are three ways to get to the create payment window. The first is to click ‘receive payment’ from the customer window next to the invoice that you want to receive the payment for. The second way is to click ‘select payment’ from the ‘create new menu’ on the customer window. Finally the easiest way is use the create menu from the top of your screen, looks like a plus-sign, and simply select ‘receive payment’ from under the customers menu.

Any of those three paths will lead you to the receive payment window. Once you are here you can enter the customer name, the date, select a payment method and select the account that you want the funds to go to. As we explained in Episode 4 when we were talking about how to create a sales receipt, most of the time you’ll be grouping the payment with undeposited funds. If you always deposit the money from a single payment all by itself to the bank then you can just choose the bank that you want it to go to but this is not common practice. It is much more likely that this payment will be grouped in with other payments for deposit. In that situation you want to deposit the payment into your undeposited funds account.

In Episode 7 of this series we will look at how to group and deposit transactions from the undeposited funds window into your bank account. When you save the payment you will see that the invoice is now closed and the client no long owes you money. Customers do not always pay the exact the amount on their invoices. When a customer a different amount than what is due you can simple enter the amount that was exactly received into the box in the upper right hand side of your screen. If they pay an amount under the invoice amount you will see that QuickBooks automatically calculates the balance remaining on that invoice and it will show that the client owes a balance. If the client overpays QuickBooks will show a credit balance for that customer.

This credit may be applied to future invoices as they are created. If you do not expect to do any more business with this client, they may request that you issue a refund. Stay tuned to Polymath.com for upcoming videos on refunds and credits. Finally there may be a client with multiple open invoices. If they pay more than one invoice with a single payment you can simply select the appropriate invoices in the received payment dialog. If they’re paying an invoice other than the oldest invoice available, you will see that QuickBooks tries to apply the payment to the oldest open invoice even if your customer is paying them out of order.

This can cause some confusion with your client, so it’s important to double-check and not have the computer do our thinking for us. Now that you are an expert on receiving payments, check out Episode 7 of this series for how to make a deposit. Creating a deposit is how you group together a batch of payments so they match the actual amount of the deposit in your bank’s statements. I’m Ingrid Edstrom of Polymath LLC and Ashland Bookkeeping Services. Thanks for watching and stay tuned for more videos.

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