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brussell2333
September 6, 2021
Question

Invoices and Statements

  • September 6, 2021
  • 2 replies
  • 0 views

Hello. I serve as Treasurer for a small church that uses Quickbooks for its accounting. We use Invoices to set up annual pledges from members of our congregation, and post their payments as they give toward their pledges over the course of the year. Some members do not make their pledge in a given year, and some give more. I record giving to a pledge (invoice) as received payments, and giving in excess of a pledged amount as sales receipts. Annual and quarterly statements show both types of giving.

 

I want to use Balance Forward statements for reporting as these statements show a member the amount of their individual giving over the year, when they gave, and the total amount of their giving against their pledge (invoice). However, Balance Forward statements show open invoice amounts (unmet pledges/invoices) from previous years. We do not think it is appropriate to remind households of prior year's giving in the current year, so I want to augment past year's invoice amounts so there is no open balance to carry forward.

 

Rather, this is what I think I want to do so that I can use Balance Forward statements.

 

Changing past year's invoiced amounts results in changes to past year's Profit and Loss Statements and Balance Sheets as it should for Accrual Basis accounting. I want to avoid those changes. We use Cash Basis accounting and invoices are not revenue to us. But I don't want to change previous years' P & L reports to solve this problem.

 

Can you help?

2 replies

M
MirriamM
September 6, 2021

I appreciate the detailed information that you've provided me, brussell2333.

 

You may want to record a bad debt for the invoices that become uncollectible in QuickBooks Online (QBO). Doing so ensures your accounts receivable and net income stays up-to-date. Then, you'll be able to close the open invoice and zero out the customer balance.

 

To do this, you'll need first to create an expense account for bad debts:

  1. In the left menu, click Accounting.
  2. Go to the Chart of Accounts tab.
  3. Click New to create a new account.
  4. From the Account Type drop-down menu, select Expenses.
  5. From the Detail Type dropdown menu, choose Bad debts.
  6. In the Name field, enter “Bad debts.”
  7. Click Save and Close.

Then, create a non-inventory item that will hold the bad debt:

  1. In the left menu, click Sales.
  2. Go to the Products and Services tab.
  3. Click New.
  4. Choose Non-inventory.
  5. In the Name field, enter “Bad debts.”
  6. From the Income account drop-down, select Bad debts.
  7. Click Save and Close.

After that, create a credit memo and ensure to apply it to the invoice you want to close. For detailed steps, continue following Step 4 and 5 outlined in this article: Write off bad debt in QuickBooks Online. It will provide you with information on how to manage uncollectible invoices in QuickBooks.

 

As always, you can visit our Sales and customers page. It provides you links about managing your company's income and customers.

 

Feel free to post in the comment section should you have any other questions in mind. I'm always here to keep helping. Have a great day ahead. 

BigRedConsulting
BigRedConsulting
February 2, 2025

Yes, QuickBooks won't create a proper donor statement showing the donations received during a period.

 

Instead, you can use our BRC Donor Statements - QB Online  and/or our BRC Donor Statements - QB Desktop  tools. These tools use your QuickBooks data to create proper letter-like donation statements for a period, such as a month or year. They're very customizable. For example, you can include a table of donations that's fully customizable as well as specifying the text parts of the statement. These tools can also email your statements, when used with our BRC Excel Batch-Email Manager.

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