So many choices, Part 1: Customer transactions

This article is Part 1 of a two-parter on the transactions you can use in QuickBooks. Part 2 covers vendors and other transactions. This one covers customers.

QuickBooks has lots of different transactions you can use to run your business. Which ones do you need? Well, that depends on what you’re doing. Here’s a guide on when to use what.

With customers, the transactions you use deal with money that comes into your business. You can create any form for a customer from the Customers menu or from the Customer Center.

A customer owes you money

You’ve done the work or delivered the goods, and now you want to be paid. You have two approaches you can use to get the money ball rolling. With both options, you can either print a paper version to drop in snail mail to your customer or you can email a PDF.

  • Invoice. An invoice is a request to be paid. When you create an invoice, QuickBooks then sees that the customer now officially owes you money. So you might send an invoice for each job you complete for a customer. Choose Customers > Create Invoices.
  • Statement. A statement is a list of charges the customer has rung up over a period of time. You create statement charges to record what you’ve done for the customer as you go along, and then send a statement that lists all the accumulated charges. For example, you can send a statement once a month for all the work you’ve done for a customer that month. Choose Customers > Create Statements.

A customer pays you

Yay! Money! Now you need a record of that payment for both you and the customer.

  • Sales receipt. When a customer pays you on the spot, give them a sales receipt. It’s the same as when you go to a store and buy something. They give you a receipt with your purchase. That’s exactly what you’re doing. You can also use sales receipts to summarize a day’s sales if you don’t want to record each sale one by one. (Create a customer named “Daily Sales Summary” if you want to do this.) You can print or email a sales receipt. Choose Customers > Enter Sales Receipts.
  • Receive payments. If you’ve sent a customer an invoice and then they pay you, receive the payment (Customers > Receive Payments). The invoice is your customer’s record of sale so you don’t need to give them a sales receipt.

You’re bidding on work you want to do

The form you need is an estimate—what you tell a customer you think you will charge for your work. You’ve probably received estimates yourself from service providers, like a plumber or the guy who fixes your computer. In other words, estimates can be your first step in getting paid, and getting paid is good. Choose Customers > Create Estimates. (Be sure to turn on estimates through QuickBooks > Preferences > Sales & Invoicing.)

You owe a customer money

One of your customers has returned goods you sold or canceled an order for which you’ve already sent an invoice or billing statement and received a payment. So you need a credit memo. A credit memo reduces the amount the customer owes you. You can then issue a refund or apply the credit to future invoices. Choose Customers > Credit Memos/Refunds.

Check out Part 2 of this article to find out about transactions for vendors and other situations.

About Shelly King

Shelly King works for Intuit as a member of the QuickBooks for Mac team. She’s the Managing Editor for Little Square and its main contributor. Shelly grew up in the South until 1994 when the Internet called her to Silicon Valley. She’s done a lot on the web ever since. Little Square was her idea. Yep, it’s all her fault. See all of Shelly's articles

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