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Deposit invoice example for Administration

QuickBooks desktop 2023 apply customer deposit credit to invoice let's do it within two it's QuickBooks desktop 2023 support accounting instruction by clicking the link below giving you a free month membership to all of the content on our website Broken Out by category further Broken Out by course each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page we also include added resources such as Excel practice problems PDF files and more like QuickBooks backup files when applicable so once again click the link below for a free month membership to our website and all the content on it here we are in QuickBooks desktop get great guitars practice file we started up in a prior presentation going through the setup process we do every time maximize in the home page in the view drop down we got the hide icon bar open windows checked off open windows open on the left reports drop down company and financial p l profit and loss we're going to range and change in a 101232 123123 customize and funds to change to 14. okay yes okay let's go to the reports drop down again company and financial this time the balance sheet standard customize it's changed the range of 10123 to 123123 faunting and numbering up to 14ing and okay yes and okay that's the setup process we've been going through every time in the prior presentation we imagined the situation let's go to the home page to imagine it where we've received a payment before we invoiced someone so in our scenario that would be a customer comes in they say hey look I want this particular guitar and we're like well hold on to it until you give us the rest of the money but we would like an advance at this point in time and you can so therefore we entered the receive payment before entering the invoice which is one in a quite easy method to be applying this or work this kind of process out in QuickBooks noting of course that normally it goes in the other order we invoice and then we receive the payment or we have received the payment at the same point in time we give the inventory which would be using a create sales receipt in this case we got money but we didn't give the inventory or do the work if we just enter the received payment that will create in essence a negative receivable for that particular customer which as we discussed in the prior presentation is not exactly right from a financial statement point of view because what it should do is create a positive liability and unearned revenue account however from a logistical point of view on the bookkeeping inside of things it makes a lot of sense to do it this way because the supporting account for the accounts receivable is the customers and the customer center in other words if I use this form then I can go into the customer center quite easily here and say okay Customer Center Mr Anderson I can track the fact that I see that payment and I can make an invoice and apply the payment to the invoice quite clearly whereas if I use some method to just record unearned Revenue I don't have that same kind of link to the customer center available for that particular account that's kind of the idea we'll take a look at another method in a future presentation uh to kind of account for that using the unearned Revenue but this method you know works well and like I said you can always still then do a period end adjusting entry if if we haven't entered the invoice yet for example if I go to the reports drop down and if we go to the customers and receivables we go to the customer balance detail and then let's change uh the size here to bring it up to let's say let's make it 12. okay yes and okay and I look at Mr Anderson I'm going to make these a little wider then there's the 300 I have a negative 300 here that shouldn't be the case because that means that I owe them money or the guitar not that they owe me money so that's not exactly right it should be a positive liability however after I create the invoice which we will do this time it'll wash itself out and everything will be correct at that point it's just a timing difference in other words so so if I wasn't to receive the invoice yet I by the end of the year or the end of the month then I can do an adjusting entry to properly account the accounts receivable and the unearned Revenue allowing me to make the bookkeeping as easy as possible as well as do the adjusting entries to report the financial statements as clearly as possible periodically at the end of the month and the end of the year that's the general idea so now let's imagine that we're going to get that they they're going to sell the guitar we're going to finish the transaction so I'm going to create an invoice and apply this 300 to the invoice let's go to the home page so we did the this step first now we're jumping back to creating the invoice and I'm going to type in Mr Anderson Mr Anderson and this happened let's say the 26 like a day later Mr Anderson came in and we're gonna say that he wanted an epsh for two of those and this is an epiphone semi-hollow body 400 the tax uh is applied and we're gonna say an ELP listen ELP he wants one of those and so there we have that so we have the calculation down here now we need to apply out the advanced payment we could do that by going to the apply credits up top so I will apply the credits the changes to this transactions must be recorded before continuing I'm going to say okay your company email address is missing so I'm going to say uh okay let's uncheck the email apply credits yes and then we have the credit to apply there's the 300 that's what I want to do so I'm going to say okay done and there's the 300 and that brings the total down to what would be owed after the fact that they already gave us the three hundred dollars so this gets a little bit confusing to think about how this is going to be recorded because remember the invoice in and of itself can be a little bit confusing the data input pretty pretty easy pretty easy to get to this bottom line number but what's going to happen to the financial statements well it's an invoice so it's going to increase the accounts receivable but it's going to increase the accounts receivable by this 1365. this 300 is really just an information kind of component because uh we already recorded it right that's already on there so really it's going to increase the AR by the 1365 which will net it out against the 300 that's already in the account from the receive payment that we've recorded and then the other side is going to go to sales for the 800 and the 500 the difference going to sales tax payable of the 65 and then the inventory is going to go down by amounts not on the invoice but driven by the items and the cost of goods sold is going to go up for the same amount the net impact on net income will be the increase in the revenue of the 800 and the 500 minus the cost of goods sold whatever that is driven by these items and the sub Ledger for the customer of accounts receivable will be adjusted for Anderson which will apply the full 1365 invoice which will net out against the 300 payment that already has been received to represent the 1065 balance still owed to us in accounts receivable for Mr Anderson and the inventory sub-ledger will be adjusted for the quantities here so let's save it close it and check it out so we'll go to the balance sheet and we can say okay the accounts receivable if I double click on it there's the amount for the invoice if I double click on it notice it represents this amount 1365 not the 1065 the 300 is already there because it was recorded up top when we had the payment in place so then I'm going to close this out the other side is going to go to the profit and loss the P and L into sales like it normally would not including the sales tax and the payment once again doesn't have any any influence on it the sales tax is the difference closing those two out that's back on the balance sheet sales tax payable so we've got the payable down here obviously that again no impact from the Advance on the amount calculation for the payable and so I'm going to close that back out close that back out inventory then is adjusted it's going to go down if I double click on the inventory here's the amounts of the inventory for the two items notice those amounts aren't on the invoice but are driven by the item once again the prepayment the 300 has no impact on it closing that back out closing that back out back to the profit and loss the cost of goods sold is here if I double click on that we can see these two amounts the same amounts for the cost to get sold closing it out the difference between the sales and the cost of goods sold is the impact the net impact on net income back to the balance sheet we also know that the receivables is going to be supported by the customer balance detail report so here we have the invoice again on the books for the full amount so if I go into here the full amount here not this amount amount but it Nets out to that 1065 which is still owed which is great because that's what's on the bottom of the invoice if I give that to the customer and and but it Nets out this way because that 300 is tied to this invoice so we have a partial payment so that beautifully fits together that's the point of doing this method it works from a bookkeeping standpoint quite nicely even though until this happened we kind of had this this negative receivable which wasn't quite proper so there's pros and cons to using that method if I go to the customer center over here then also it works out beautifully in here because now I can see that this payment is applying out to this invoice as I go into this invoice and see you know the payment applied out I can close this out let's go back to the balance sheet and just take a look at the inventory inventory subledger is going to be up top reports up top we're going to go into the inventory valuation summary and so it's been adjusted 12 3123 and it's now at the 5226 for the in inventory items sold which ties out to the 5226 here okay so we're gonna leave it there for now and notice that these other two items that we have these Advanced payments for these other two customers that 200 right here for example uh we'll leave that we'll leave at least one of them there so that when we get to the end of the period and we do the month in reports we can see kind of the adjusting process that you might use in order to keep the bookkeeping as nice and neat and beautiful as it has been here for Mr Anderson but also adjust periodically at the end of the month using adjusting and reversing entries to exactly properly report your financial statements as of the end of the month as of the end of the year using the adjusting and reversing entries notice if I go back to the home page here that if I went into the receive payments for Mr Anderson then now we have of course the invoice down below with the original amount but the amount due would be the 1065 so that would be the next step if we were to receive you know the payment on the invoice and so on and go forward with a normal process of that point I'm not going to record it though The Next Step would of course then be the deposit let's go ahead and take a look at the balance sheet or the trial balance reports drop down check out our numbers with the accounting and taxes the trusty tb010123 to 123123 customize it font to number it change it 16 it okay yes it okay there it is so you can check your numbers and if everything ties out great if not try changing the date range to see if it's a date range issue and then you can drill down change your numbers as necessary we will be taking a look at a transaction detail report at the end of the data input for the second month which can help to drill down hone in on any problems foreign