Chapter
2
Chapter 2
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Managing Revenue
31
Chapter
2
Objectives
Set up customer records in the Customer:Job list
Record Sales Receipts
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
10. Create Sales Reports
1.
2.
3.
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31
Chapter
2
1.
Tracking Company Sales
Sales Receipt



2.
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
Invoice


Used for Credit Customers (pay on a date after
the sale date)
Tracks detailed information about each sale
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31
Chapter
2
Steps in the Sales Process
Business
Transaction
Recording a
Sale
Receiving
Money in
Payment of an
Invoice
Depositing
Money in the
Bank
Cash Customers (pay by cash,
check or credit card at time of
sale)
QuickBooks
Transaction
Accounting
Entry
Increase (debit)
Undeposited
Funds,
increase
(credit) income
account.
Credit Customers (pay on a date
after the sale date)
QuickBooks
Transaction
Accounting Entry
Increase (debit)
Accounts Receivable,
increase (credit)
income account.
No additional action is required
on the sales form
Decrease (credit)
Accounts Receivable,
increase (debit)
Undeposited Funds.
Decrease (credit)
Undeposited
Funds, increase
(debit) bank
Account.
Decrease (credit)
Undeposited Funds,
increase (debit) bank
Account.
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33
Chapter
2
Objectives
1.
Set up customer records in
the Customer:Job list
Chapter
2
Setting Up Customers
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
CTRL+J
1.
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35
Chapter
2
Job Costing
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
showing detailed or summarized information
about each Job
1.
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42
Chapter
2
Objective
2. Record Sales Receipts
Chapter
2
Recording Sales Receipts
When customers
pay at the time of
the sale by cash,
check, or credit
card, create a
Sales Receipt
transaction
2. Select the
Customers menu,
and then select
Enter Sales
Receipts
1.
Enter the name of the customer
here, or choose an existing
customer from the list by clicking
the down-arrow
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43
Chapter
2
Objective
3. Use the Undeposited
Funds account to track
your cash receipts
Chapter
2
1.
Recording Undeposited Funds
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
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
group all of the funds from several sales into
one deposit in the bank
2.
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49
Chapter
2
Objective
4. Record Invoices and
Payments from
customers
Chapter
2
Creating Invoices
Use Invoices to
record sales to
your credit
customers
2. Select the
Customers menu
and then select
Create Invoices
1.
Select the
customer name
from the dropdown list.
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50
Chapter
2
1.
2.
3.
4.
5.
6.
Receiving Payments from
Customers
Receiving Payments by Check
Handling Partial Payments
Receiving Payments by Credit Card
Where Do the Payments Go?
Preferences for Applying Payments
Recording Customer Discounts
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57
Chapter
2
Receiving Payments by Check
To record
payments from
credit customers
for invoices, use
Receive Payments
option
2. Select the
Customers menu,
and then select
Receive Payments
1.
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57
Chapter
2
1.
Handling Partial Payments
If a customer pays only a portion of an Invoice



2.
3.
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
The next time you use the Receive Payments
function for that customer, the Invoice will show the
remaining amount due
You can record additional payments to the Invoice
in the same way as before
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60
Chapter
2
Receiving Payments by Credit
Card
Select the
Customers menu,
and then select
Receive Payments
2. Enter the Credit
Card payment
method, credit card
number and Exp
date
1.
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60
Chapter
2
1.
Where Do the Payments Go?
Receiving payments


2.
reduces the balance in Accounts Receivable
increases the balance in Undeposited Funds
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
in your bank account (and reduce Undeposited
Funds)
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62
Chapter
2
1.
2.
Preferences for Applying
Payments
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
Automatically Apply Payments setting in Sales &
Customers Company Preferences allows
QuickBooks to match the payment with invoices
automatically
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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
1.
2.
3.
Recording Customer Discounts
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
To apply the discount to
this Invoice, click Set
Discount on the left side of
the Receive Payments
window
QuickBooks automatically
calculates a suggested
discount based on the
terms on the customer’s
Invoice, you can override
this amount if necessary
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63
Chapter
2
Objective
5. Record bank deposits of
cash, check, and credit
card receipts
Chapter
2
1.
Making Bank Deposits
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
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66
Chapter
2
1.
2.
3.
4.
Depositing Checks and Cash
Select the Banking menu
and then select Make
Deposits
Since you have funds
stored in the
Undeposited Funds
account, QuickBooks
displays the Payments to
Deposit window
Select Cash and Check
from the View Payment
Method Type drop-down
list
In the Make Deposits
window, select the bank
account where payments
will be deposited
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67
Chapter
2
1.
Holding Cash Back from
Deposits
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
it’s an account where you can track all your cash
expenditures
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70
Chapter
2
1.
2.
3.
4.
Printing Deposit Slips
QuickBooks can print deposit slips on preprinted deposit
slips
To make this feature work for you, you’ll need to order
preprinted deposit slips that match the QuickBooks
format
Display the most recent deposit transaction by selecting
the Banking menu and then selecting Make Deposits
Click Print on the Make Deposits window
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70
Chapter
2
1.
2.
3.
4.
5.
Depositing Credit Card
Payments
Select the Banking menu, and then select Make
Deposits. The Payments to Deposit window opens
Click in the left column on the line to select the
Credit Card receipt , then click OK
The Make Deposits window opens
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
QuickMath is a feature that helps you add, subtract,
multiply, or divide in any QuickBooks Amount field
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73
Chapter
2
Objective
6. Process customer
returns and credits
Chapter
2
1.
Use QuickBooks Credit
Memos for the following
situations:




2.
Recording Customer Returns
and Credits
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
Select the Customers
menu and then select
Create Credit
Memos/Refunds
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76
Chapter
2
1.
2.
3.
Customer Open Balance Report
Select the
customer:job in
the Customer:Job
list
Click Reports
button at the
bottom
Select Open
Balance Report
option for the
selected
customer:Job
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78
Chapter
2
1.
Applying a Credit Memo to an
Invoice
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
Invoice
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79
Chapter
2
1.
2.
3.
4.
5.
6.
7.
8.
Refunding Customers By Check
Select the Customers menu and then select Create Credit
Memos/Refunds.
Fill in the Credit Memo to match the returned items and
any restocking fee, if applicable
To create the refund check, click the Check Refund icon
QuickBooks automatically opens the Write Checks
window and creates a refund check which is already filled
out
Print the check by clicking the Print icon
Click Save & Close to record the check
Press ESC to close the Create Credit Memos/Refunds
window
QuickBooks recorded the Credit Memo when you
recorded the check
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82
Chapter
2
1.
2.
3.
4.
Refunding Customers By Credit
Card
Create a new credit card Payment item in the Item
list for the credit card used in refund
Create a Credit Memo using the same items that
were originally invoiced to ensure QuickBooks
credits back the original sales Items correctly
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
Verify that the total on the credit memo is zero, then
click Save & Close to record the transaction
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82
Chapter
2
Objective
7. Write off customer
invoices (record bad
debts)
Chapter
2
1.
2.
3.
4.
5.
Writing Off a Bad Debt
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
Bad Debt is an Other Charge Item linked to Bad
Debts expense
Fill out the Credit Memo using the Bad Debt item,
rate being the invoice total
Click Save & Close to record the Credit Memo
Apply this credit memo to the original invoice using
Receive Payments and Set Credits
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89
Chapter
2
Objective
8. Create and print
customer statements
Chapter
2
1.
2.
3.
4.
5.
6.
Creating Customer Statements
QuickBooks customer statements provide a
summary of the activity for an accounts receivable
customer during the period you specify
In a statement, you can show either all of the
customer’s accounts receivable activity or just the
transactions that are currently open
Select the Customers menu and then select Create
Statements
Enter the date, statement period, select customers
and other relevant options
Click Preview button to review the statements in
Print Preview window
Print the statements and then close
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92
Chapter
2
Objective
9. Assess finance charges
Chapter
2
1.
2.
Assessing Finance Charges
When a customer is late in paying an invoice, you
can assess finance charges
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
You can override the finance charge amount
Click Assess Charges to record the finance charges
Click Preview to see the finance charges in your statements
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93
Chapter
2
Objective
10. Create Sales Reports
Chapter
2
1.
Sales by Customer Summary
Report
Select the Reports menu, then select Sales,
and then select Sales by Customer
Summary
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96
Chapter
2
1.
Sales by Item Report
Select the Reports menu, then select Sales,
and then select Sales by Item Summary
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96
Chapter
2
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Summary of Key Points
Set up customer records in the Customer:Job list
Record Sales Receipts
Use the Undeposited Funds account to track your cash
receipts
Record Invoices and Payments from customers
Record bank deposits of cash, check, and credit card
receipts
Process customer returns and credits
Write off customer invoices (record bad debts)
Create and print customer statements
Assess finance charges
Create Sales Reports
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