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In Quickbooks, how do you know when to bill a customer using a sales receipt or an invoice? It depends on if you receive full payment at the same time you make the sale and if the customer is using one or multiple payments methods (ex: debit card and credit card).
Note: If you are using Quickboks POS (Point-of-Sale), this may not apply to your situation.
You use a sales receipt when:
You are running a mechanic shop and someone is buying an air freshener for their car. They buy the air freshener and pay with a debit card.
You use an invoice when:
You are running a mechanic shop and someone is getting their oil changed. They order the oil change, so you enter that as a bill (since they are not paying at this point). Once the oil change is done, you collect the money by receiving the payment. So, even though they paid on the same day, you created the sale as an invoice at a different time from when you actually collected the payment.
Ok, same mechanic shop, but this time someone is buying a special order part, a set of custom rims. You want to take a 50% deposit at the time of the order and then 50% payment when they pick up. First, write an invoice for the total amount. Second, receive the deposit by using receive payment. When you make that deposit, it is a partial payment, so Quickbooks will show a box in the lower left hand corner asking whether you want to leave as an underpayment or write off. By default, leave as underpayment is selected. Leave it like that because you’ll be receive the payment later. Third, when the customer picks up the rims, you then go to receive payment again and process the remaining 50%.
All right, mechanic shop, but this time they are paying for that air freshener with a credit card and a debit card. Don’t ask me why! You do this the same way as you would a when someone is paying an invoice in more than one installment. First, you write up the sales as an invoice. Second, you receive the payment, but only a partial payment using the first payment method (this case visa card). Quickbooks will show a box in the lower left hand corner asking whether you want to leave as an underpayment or write off. By default, leave as underpayment is selected. Leave it like that because you’ll enter another payment method with a new transaction. Third, receive the payment using the next payment method (this case debit card). Continue receiving payments for as many payment methods as you need to.
If your customer has paid over several transactions, such as paying a 50% deposit and then 50% upon receiving the goods OR paid using two different payment methods, you have a few options to give them a receipt. Please view Issuing a Paid Receipt or Proof of Payment.
In Quickbooks, there is usually more than one way to do something. Here are a few examples.
Let’s take that oil change example again. You were told to enter this as a bill, and then later use receive payment to get the funds. That’s because the customer paid at a time (maybe 30 minutes or 3 hours) after requesting an oil change and the sale being entered into Quickbooks. Let’s say you wait to write up the sale until the job is done. If you do this, the customer is then paying at the same time you are entering the sale into Quickbooks. In this situation, you can use a sales receipt.
You can actually receive a payment on an invoice. You can also receive payments from multiple sources (ex: credit card and debit card) using a sales receipt.
Both options are possible by creating a payment item.
To create a payment item, go to Lists > Item List and make a new item (Edit > New Item). Under Type choose Payment. Name your payment appropriately, such as Visa Payment for payments you’ll receive by visa or Debit Card Payment for payments you’ll receive by debit card. Add a similar name to your description. Under the Payment Method box, pick the correct method. Lastly, you can either have the money go to undeposited funds or you can have it go straight to a bank account.
Once you have the payment item created, you can choose that payment item, exactly like you would choose a product or service to charge your customer.
The only issue with this method, is that the Total box will show as $0.00, since there is no money owing (due to the negative dollar amounts for the payment lines). This may be a bit confusing to the customer.