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Dalma3
September 10, 2024
Question

How to have invoice not record transactions - only payment?

  • September 10, 2024
  • 1 reply
  • 0 views

In my business, I generate an invoice and ask for payment before services are provided. Therefore, when an invoice is generated, revenue has not been earned.


I do not want QB to record any transaction until payment is received. At that time, recording revenue and the sales tax liability is appropriate (since I fulfill orders within 24 hours, so it doesn’t have to go to deferred revenue).

 

I have seen some say to switch to cash basis. I do not want to do this - I just want the books to be accurately reflected.

 

My main concern with the current accounting is that some invoices end up not paid and yet it shows revenue earned and a sales tax liability incurred. At the end of the quarter (for sales tax reporting purposes) and at the end of the year (for income tax and franchise tax reporting purposes), my numbers will be wrong.

1 reply

J
JanbonN
September 10, 2024

Hello there, @Dalma3. I'm here to provide a way to record invoice payments in QuickBooks Online (QBO).

 

Based on the details you've shared, you can use a deposit or retainer process for your company in QBO. The retainer or deposit is treated as a liability to show that, although your business is holding the money from a deposit or retainer, it doesn't belong to you until it's used to pay for services.

 

First, you need to create a liability account to track the amount of retainers you receive from your customers. Here's how:

 

  1. Go to the Gear icon and select Chart of accounts.
  2. Select New.
  3. From the Account Type dropdown menu, select Other Current Liabilities.
  4. Select Trust Accounts - Liabilities from the Detail Type dropdown menu,
  5. Enter a Name for the account (for example, Trust Liabilities) or accept the suggested name.
  6. Select an option from the When do you want to start tracking your finances from the is account in QuickBooks? dropdown list.
  7. Select Save and Close.

 

Second, create a retainer item you can use when creating a sales receipt:

 

  1. Go to the Gear icon and select Products and Services.
  2. Select New.
  3. From the Product/Service information panel, select Service.
  4. Enter a Name for the new product or service item (for example, Retainer).
  5. From the Income account dropdown menu, select the liability account created above.
  6. Select Save and close.

 

Third, please refer to this article for the succeeding steps: Record a retainer or deposit. Please ensure to use Sales Receipt for Step 4.

 

Additionally, you can run customer reports to get an overview of your accounts receivable transactions.

 

Let us know if you have other concerns with your invoice in QBO. We're here to help you in any way we can.

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