How to handle a partial payment when creating an invoice in QBO?

Case: A customer bought $105.00 worth of product and paid $80.00 in cash. You need to send an invoice to the customer for the balance. How would you handle this in QBO?

First, create a new invoice using product/service item code for $105.00. Use deposit field to post $80.00 as the prepayment on that invoice. Deposit field is located right below the total. Now, the invoice will show $25 balance due.

If you do not see “DEPOSIT” field on your invoice, go to “Company Gear” settings to enable deposit field: Gear icon (upper right corner) > Settings > Company Settings > Sales > Deposit > ON > save. See screenshot below for reference.

Click on the screenshots below to enlarge them
enable deposit setting

Once you enter deposit amount, your invoice screen will expand to show the following three fields added to the invoice form. Fill out the information appropriately:

a) Payment method
b) Reference no.
c) Deposit to

You will need to select “Deposit to” field depending on your situation. If you are depositing this deposit (prepayment) to the bank along with other payments as a batch deposit, then you should select Undeposited Funds Account. On the other hand, if you are depositing just $80.00 as a single deposit to the bank, you should select the appropriate bank account.

deposit field on invoice

The snapshot below shows what accounts are affected by this transaction:
deposit journal report
1. Accounts Receivable: $25
2. Sales Income: $105
3. Undeposited Funds or Bank Account: $80

 

#QuickBooks Online

 

Recording Daily Sales

In QBO Essentials and Plus, you can create a Recurring Sales Transaction to be used at the end of each day to record your daily sales transactions.

This YouTube video will show step by step instructions on how to record daily sales in QBO. We highly encourage you to watch the entire video. You do not want to miss a step!

 

You will need to create a few new accounts in the Chart of Accounts:

Clearing Account (Category Type = Banking)
Income Account (Category Type = Income)
Overage/Underage Expense Account (Category Type = Expense)

To create new accounts (left blue navigation bar > transactions > chart of accounts > new)
bank clearing

 

You will need to create Products/Services associated with the following account types:

Sales categories = Sales Income account (make it taxable if your charge sales tax)
Cash= Undeposited funds
Checks= Undeposited funds
Visa/MasterCard = Undeposited funds
American Express = Undeposited funds
Discover = Undeposited funds
Overage/underage (for drawer shortages) = Expense account

To create products/services list (from the home page screen > company gear (upper right corner) > lists > products/services > new (upper right corner)

products services

 

You will also need to enable sales tax settings (if needed).
Sales tax = (left blue navigation bar > sales tax > add/edit tax rates and agencies). QBO will automatically create a Sales Tax Liability account. You do not need to create sales tax account in the Chart of Accounts separately.
sales tax

 

Now you need to create recurring Sales Receipt template (from the home page screen > company gear (upper right corner) > lists > recurring transactions > new (upper right corner).
recurring sales receipt

 

Now you are ready to create a Sales Receipt for each day based on end of the day Cash Register run (from the home page screen > company gear (upper right corner) > lists > recurring transactions > use under action column).
use recurring sales receipt
Note: By recording all of the Sales as positives and all of the Payments (Expenses & Cash Shortage) as negatives, the net amount of the Sales Receipt should be Zero.

In this example, at the end of the day, you have $1,000.00 in Sales, $80.00 in Sales Tax. The cash register count for Cash is $200.00, ‘Checks’ is 300.00, Visa/MasterCard is $390.00, American Express is $80.00, Discover is $80.00 and Cash Shortage is $10.00. The sales report that day shows $1,080.00 in Sales ($1,000 sales income plus $80 sales tax).
use sales receipt from recurring

 

In case of additional expense payments from the cash register, create new products/services mapped to appropriate expense category of Chart of Accounts.
additional expense payments

 

Finally, go to Undeposited Funds and record the deposit for the amounts actually deposited in the bank.
deposits

To do this (from the home page screen > create + sign > other > bank deposit). Select deposit date in QBO based on bank posting date.
 
Note to Simple Start users: since there is no “Recurring Transactions” feature available in Simple Start, you will need to follow all the setup instructions and create a Sales Receipt for daily sales. Transactions will be recorded the same way in QBO.
 

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QuickBooks Online Chart of Accounts

There are certain accounts QBO automatically creates when a new company is created. These certain accounts can be deleted or edited and there are certain specific accounts cannot be deleted. They are integral part of QBO company account setup.

These are specific accounts that cannot be deleted or used for anything else. Here are specific accounts that cannot be deleted or used for anything else:

  • Undeposited Funds
  • Inventory Assets
  • Opening Balance Equity
  • Retained Earnings
  • Cost of Goods Sold
  • Credit Card Receivables
  • Reconcile Discrepancies
  • Unapplied Cash Payment Income

All of these specific accounts are integral part of QBO special accounts. They cannot be changed into regular accounts. It is highly recommended not to delete it even though you may never use these certain accounts.

These accounts cannot be deleted or merged but can edit the name if needed:

  • (Sales tax agency name) Payable
  • Services
  • Owner’s Equity
  • Uncategorized Expense
  • Uncategorized Income
  • Uncategorized Asset

Services income account is the default income type account for the QBO file. It actually operates the same as any income account, but this one can’t be deleted, nor can the corresponding product service item. However, they can both be changed to the main income account you will be using.

Edit the name of Services to the name you call your income:

  1. From the home page screen, go to the Company Gear (upper right corner) and select Chart of Accounts under Settings heading
  2. Click once on Services to highlight it.
  3. Click Edit button.
  4. Change the name to your preferred name of income.
  5. Click Save.

Accounts that can be deleted by merging:

  • Billable Expense Income (Income Category Type)
  • Markup (Income Category Type)

To merge the accounts:

  1. From the home page screen, go to the Company Gear (upper right corner) and select Chart of Accounts under Settings heading
  2. Click once on the account to highlight it.
  3. Click Edit button.
  4. Change the name to Services, or the exact name that Services has been changed to.
  5. Click Save.
  6. The program will ask if you want to merge; click Yes.

Accounts that can be deleted, but are associated to a company settings. (Since the below accounts are associated to a preference setting the only way to delete them is to disassociate them from the setting .)

  • Shipping Income (Income Category Type)
  • Discounts Given (Income Category Type)

To disassociate the account you want to change:

Want to change Shipping Income?:

  1. From the home page screen, Go to the Company Gear tab (upper right corner) and click  Company Setting under Settings heading.
  2. In the left column, click on Advanced.
  3. In the Chart of Accounts section, click on Shipping Account.
  4. From the drop down list, select shipping account you will be associating this preference to income type account.
  5. At the bottom right, click Done.

Want to change Discount Income?:

  1. From the home page screen, Go to the Company Gear tab (upper right corner) and click  Company Setting under Settings heading.
  2. In the left column, click on Advanced.
  3. In the Chart of Accounts section, click on Discount Account.
  4. From the drop down list, select discount account you will be associating this preference to income type account.
  5. At the bottom right, click Done.

 

 

…more related source

 

Chart of Accounts can be also used many ways in new QuickBooks Online.

How to go to Chart of Accounts?

From the home page screen > select Company Gear (upper right corner) > select Chart of Accounts under Settings

From here, you can ADD New account, edit existing account and delete account with certain exception (certain account cannot be deleted).

Wait, you can do more…

From here, you can go the Register for all the Balance Sheet Accounts. Just highlight account and select Register.

From here, you can generate ACCOUNT QUICKREPORT for all accounts listed here on the Chart of Accounts. Just highlight account and select Report. It is also a quick way to run a report for specific General Ledger Account.

 
COA menu bar

COA quickreport

Is there any way to select all in undeposited funds instead of clicking on them one by one?

At this time, there is no way to select all from “Receive Payment” screen deposit to Undeposited Funds account. But I see huge advantage of having “Select All” button and “Clear All” button like currently available in “Bank Deposit” form.

To add this new feature request, add your voice here:

http://feedback.qbo.intuit.com/