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

 

QuickBooks Multicurrency in QuickBooks Online US

With QuickBooks Online (QBO) multi-currency, you can track transactions in more than one currency. Multicurrency affects many accounts and balances in company file and the preference can’t be turned off once it’s been turned on.

Important: Since you cannot really back up company file (with all the features and the settings) in QBO at this time, make sure this is what you want before turning on this multi-currency feature.

The multi-currency menu items are in the Company Settings menu under Currency in the QuickBooks Online.

From the home page screen > company gear (upper right corner) > settings > company settings > currency > ON > Save

Click on the screenshots below to enlarge them
1enable currency feature

Multicurrency once enabled from the QuickBooks Online, one cannot UNDO it. See screenshot below, there is no edit pencil icon for currency, once the currency feature is ON.
2currency feature enabled

Once the multi-currency is enabled, it will do two visible things:

  • It will create “Currencies” under lists.
  • It will create “Exchange Gain or Loss” account under “Other Expense” type.

lists currencies

exchange gain or loss account

Currency exchange rate

Once set, the company’s home currency cannot be changed:
For US QuickBooks Online editions, the home currency is set to USD, by default.
Exchange rates are always recorded as the number of home currency units it takes, to equal one foreign currency unit.

To add new currency > from the home page screen > company gear (upper right corner) > lists > currencies > add new

home currency table

How to start using the multi-currency feature?

  • After you turn on the feature, you will be able to assign a currency to customers, vendors, and other accounts.
  • You can assign one currency for each customer or vendor so you will create new customers or vendors to use in your foreign transactions.
  • You can assign one currency for each account so you will create new accounts to use for your foreign transactions.
  • If you prefer to use your own exchange rates, you can manually enter those as well.

The following image shows how these currencies attributes in an Invoice transaction relate to the representation of the invoice.
invoice in gbp

Customer Center > from the home page screen > left navigation bar > customers

customer center

Customer Page > from the home page screen > left navigation bar > customers > customer

customer page

It also automatically creates separate Accounts Receivable accounts (not sub-accounts) by currencies in addition to main home currency A/R.
ar accounts by currencies

A/R Aging Summary Report in home currency
ar aging in home currency

Balance Sheet Report
Since A/R (and A/P) not sub-items type, it cannot be collapsed even if wanted.
balance sheet

(All Vendor side transactions and reports also work the same way as Customer transactions).

Mult-currency features not available

Weekly TimeSheet and Single Time Activity entered (either by employee or vendor contractor) do not work with multi-currency at this time. You will get the following error message:

“The following errors have occurred: You must choose a customer that uses local currency when time is billable.”

multicurrency single time not working

multicurrency timesheet not working

 

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#QuickBooks Online #QBO – How to handle zero balances in accounts receivable aging

You have two ways to handle this issue in QBO:

  • Manual Setting
  • Automatic Setting (auto-mode)

You will need to select the one which is right for your business situation. When you create a new company file in QBO, normally this auto-mode is already ON as a default setting.

1zero ar aging

Manual method is commonly used when you have several customers open invoices and need to apply issued credit and received payment against a specific invoice. The credit memo may directly be related to certain specific project or a product return.
For example, you issued several product invoices to a customer. They returned one product and you had to issue a credit memo. They paid that invoice and also deducted for product return. For your business, you want to make sure, transactions (payment and credit) for that invoice is handled correctly. You would want to manually select that invoice; enter receive payment; apply credit and clear that invoice in A/R Aging.

To clear zero balance in A/R Aging:
From the home page screen > left navigation bar > customers > customer page > go to customer invoice > select “Receive Payment” under “Action” column
It will take you to “Receive Payment” screen. “Amount Received” should show zero because clearing “outstanding” and “credit” are for the same amount. Choose Save and Close. It should clear (disappear) zero balance in A/R Aging. Now, on customer page, status should indicate paid (instead of partial) and closed (instead of unapplied).

Click on the screenshots below to enlarge them
2customer page

3clear ar

4clear customer page status

Automatic method (default setting in QBO)
You can also choose “automatically apply credit” setting in QBO. By turning this setting ON, it will automatically apply credits to the next invoice you create for the same customer. General service-based companies (or non-project oriented companies) prefer turn on this setting. They do not deal with product returns. Invoices they issue are not sensitive to any specific project.

To turn on this automatic setting in QBO:
From the home page screen > company gear (upper right corner) > settings > company settings > advanced > automation > Automatically apply credits ON > save

5automatically apply credit setting

Once this automation setting is on, it is automatically take care of payment and credit. You will not see zero balances in Accounts Receivable Aging.


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