Chapter 10
Managing Your Accounts Receivable
In this chapter:
• Apply customer payments
• Apply credits and discounts to invoices
• Handle cash sales
• Deposit customer payments into your bank account
• Track receivables
• Impose finance charges
• Send statements to customers
As you create invoices and send them to your customers, there’s an expectation that money will eventually arrive to pay off those invoices. In fact, for most businesses, the most rewarding QuickBooks task is receiving a payment from a customer. QuickBooks gives you the tools you need to make sure that you apply customer payments the way your customer intended so that you both have the same information in your records.
Your Options for Receiving Customer Payments
In QuickBooks, payments are applied to specific invoices, not to a general balance forward. You can, however, change how QuickBooks applies payments with just a mouse click or two, using the following steps:
1. Choose Edit | Preferences and click the Payments icon in the left pane.
2. Move to the Company Preferences tab.
3. In the Receive Payments section, select or deselect options to match your needs:
• Automatically Apply Payments means that when you enter the amount you’ve received from the customer, QuickBooks will automatically pay off matching invoices, first by amount, then by the oldest due date.
• Automatically Calculate Payments tells QuickBooks to let you omit the amount of the customer’s payment in the transaction window and select invoices to pay off. QuickBooks adds up the invoice amounts and applies the total as the customer’s payment. (This assumes the customer has sent a payment that matches the total.)
• Use Undeposited Funds As A Default Deposit To Account automatically posts the payments you receive to the Undeposited Funds account, and from there you’ll deposit the funds into a bank account.
Recording the Payment
When a payment arrives from a customer, choose Customers | Receive Payments to open a blank Receive Payments window, as shown in Figure 10-1. Note the ribbon bar at the top of the window that contains three tabs: Main, Reports, and Payments. Each of these tabs contains buttons that give you easy access to important payment related tasks (such as processing credit payments) as well as reports where you can find customer balance information.
FIGURE 10-1 |
The Receive Payments window has everything you need to apply payments accurately and to choose QuickBooks customer payment options. |
Click the arrow to the right of the Received From field and select the customer or job from the drop-down list using the following guidelines:
1. Select the customer. The details for the open invoice balance(s) for this customer are displayed. If the payment is for a job, select the job. The details for the open invoice balance(s) for this specific job are displayed. If the payment covers multiple jobs, select the main customer name to see all invoices for all jobs. The details for the open invoice balance(s) for this customer and jobs are displayed.
2. In the Payment Amount field, enter the amount of this payment. To select the payment method, click one of the payment method buttons to the right of the Payment Amount field. If the payment method is a check, enter the check number in the Check # field that appears. If the payment method is a credit card, complete the Card No. and Exp. Date fields for your records. If you have a merchant account with the QuickBooks Merchant Account Service, check the Process Payment check box on the Main tab on the Icon Bar.
3. The Memo field at the bottom of the window is optional, and you can use it if you want to link a note to this payment record.
If the Deposit To field is displayed, select the bank account for depositing the payment, or select Undeposited Funds if you’re using that account to receive payments. If the Deposit To field is not displayed, it means your Payments Preferences are configured to deposit payments to the Undeposited Funds account automatically, which is the most often used setting. See the section “Depositing Payments into Your Bank Account” later in this chapter to determine which setting would work best for you.
ProAdvisor Tip: You can add any additional payment methods you need by choosing <Add New> in the Pmt. Method drop-down list.
Calculating the Payment
If you’ve enabled the Automatically Calculate Payments option in the Payments category of the Preferences dialog (the default setting), you can skip the Amount field and move directly to the list of invoices in the Receive Payments window. As you select each invoice for payment, QuickBooks calculates the total and places it in the Amount field.
If you haven’t enabled the option to calculate payments automatically and you select an invoice listing without entering the amount of the payment first, QuickBooks issues an error message, telling you that the amount of the payment you’re applying is higher than the amount you entered in the Amount field. In that case, enter the amount of the payment in the Amount field at the top of the Receive Payments window.
Applying Payments to Invoices
By default, QuickBooks automatically applies the payment to the oldest invoice(s), unless the amount of the payment exactly matches the amount of another invoice, as seen in Figure 10-2.
FIGURE 10-2 |
QuickBooks has applied the payment to an invoice that exactly matches the payment. |
In situations where the customer’s intention isn’t clear, the smart thing to do is to call and ask how the payment should be applied. You must, of course, apply the entire amount of the customer’s payment. If you are not tracking the customer balance by invoice and are instead using a balance forward system, just let QuickBooks continue to apply payments against the oldest invoices.
If the customer payment doesn’t match the amount of any invoice, check to see whether the customer indicated a specific invoice number for the payment. If so, apply the payment against that invoice; if not, let the automatic selection of the oldest invoice stand.
Depositing Payments into Your Bank Account
If you don’t see the Deposit To field in the Receive Payments window when recording payments from customers, it means your Payments Preferences setting is set to post payments automatically to the Undeposited Funds account. This is the default setting in QuickBooks and is almost always the best way to handle money you receive. To confirm this, select Edit | Preferences | Payments and look on the Company Preferences tab.
If you decide to change this setting, you’ll use the Deposit To field in the Receive Payments window to select an account for depositing the payments. You can select a bank account or select the Undeposited Funds account. Read the following two sections carefully before deciding which setting is the best for you.
Depositing Cash Receipts into the Undeposited Funds Account
When you enable the automatic use of the Undeposited Funds account (or manually select that account in the transaction window), each payment you receive is entered into the account named Undeposited Funds (QuickBooks establishes this account automatically). It’s an account type of Other Current Asset.
When you finish applying customer payments in QuickBooks, and you’re ready to make your bank deposit, you move the money from the Undeposited Funds account into a bank account by choosing Banking | Make Deposits from the menu bar. (See the section “Recording Bank Deposits from the Undeposited Funds Account” later in this chapter for the rest of the details.)
While the bank account shows only the total amount of each bank deposit (the payments you selected for transfer to the bank from the Undeposited Funds account), the Undeposited Funds account shows each individual payment you received. This matches the bank statement that shows up each month, making it easier for you to reconcile the account.
Depositing Each Payment Directly into a Bank Account
Depositing each payment directly to the bank means you don’t have to take the extra step of moving cash receipts from the Undeposited Funds account into the bank account. However, each payment you receive appears as a separate entry when you reconcile your bank account.
So, for instance, if you receive six payments totaling $10,450.25 and take the checks to the bank that day, your bank statement shows that amount as one deposit. When it’s time to reconcile your account and you compare your bank statement to your QuickBooks bank register, each individual payment is listed in the register. When added together, these payments should all equal that same amount of $10,450.25, but you’ll have to select each payment individually, mark it as cleared, and make sure it matches the bank statement. (See Chapter 13 for detailed instructions on reconciling bank accounts.)
Handling Underpayments
After you apply the customer’s payment, if it isn’t enough to pay off an existing invoice, the lower-left corner of the Receive Payments window displays a message that asks whether you want to leave the underpaid amount as an underpayment or write it off.
To make it easy for you to contact the customer to ask about the reason for the underpayment, QuickBooks adds a button labeled View Customer Contact Information that opens to the customer record when clicked.
If you opt to retain the underpayment, the invoice you selected for payment remains as a receivable, with a new balance (the original balance less the payment you applied). When you click Save & Close (or Save & New), QuickBooks makes the appropriate postings.
If you select the option to write off the underpayment, when you click Save & Close or Save & New, QuickBooks opens the Write Off Amount dialog so you can choose the posting account, and, if applicable, apply a class to the transaction.
Discuss the account to use for a write-off with your accountant. You can create an Income or Expense account for this purpose, depending on the way your accountant wants to track receivables you’ve decided to forgive.
Applying Credits to Invoices
You can apply any existing credits to an open invoice, in addition to applying the payment that arrived. If credits exist, customers usually let you know how they want credits applied, and it’s not unusual to find a note written on the copy of the invoice that the customer sent along with the check that probably represents the net due when the credit is applied.
When credits exist for the customer or job you select in the Receive Payments transaction window, QuickBooks displays the credit balance in the Available Credits field at the bottom of the window (see Figure 10-3).
FIGURE 10-3 |
This customer has a credit balance that can be applied to the invoice along with the payment the customer sent. |
To apply a credit balance to an invoice, click the Discount And Credits button at the top of the Receive Payments window, which opens the Discount And Credits dialog.
Select the credit(s) you want to apply and click Done. Depending on the circumstances, here’s how QuickBooks handles the credits:
The Credit Total Is Equal to or Less Than the Unpaid Amount of the Oldest Invoice This reduces the balance due on that invoice. If the customer sent a payment that reflects his net balance due (balance minus unused credits), the invoice has no remaining balance.
If applying the existing credit along with the payment doesn’t pay off the invoice, the balance due on the invoice is reduced by the total of the payment and the credit.
The amount of the credit is added to the postings for the invoice. Don’t worry—this change affects only the invoice balance and the accounts receivable posting; it doesn’t change the amount of the payment that’s posted to your bank account.
The Credit Total Is Larger Than the Amount Required to Pay Off an Invoice If the customer payment is smaller than the amount of the invoice, but the amount of credit is larger than the amount needed to pay off the invoice, the balance of the credit remains available for posting to another invoice.
To apply the unapplied credit balance to another invoice, click Done and select the next invoice in the Receive Payments window. Then click the Discount And Credits button and apply the credit balance (or as much of it as you need) against the invoice. Any unused credits remain for the future.
You should send a statement to the customer to reflect the current, new invoice balances as a result of applying the payments and the credits to make sure your records and your customer’s records match.
Applying Credits to a Different Job
You may encounter a situation in which a customer has already paid the invoices for a job when the credit is created or has paid for part of the job, exceeding the amount of the credit. If the customer tells you to apply the entire credit balance to another job or to float the credit and apply it against the next job, open the credit transaction and change the job (because a credit can be applied to an invoice for that same job only). Then apply the credit to an invoice for the job you specified, or tell QuickBooks to retain it as an available credit that you’ll apply when payment arrives.
Applying Discounts for On-Time Payments
If you offer your customers terms that include a discount if they pay their bills promptly (for instance, 2%10 Net30), you should apply the discount to the payment if it’s applicable.
Figure 10-4 shows the Receive Payments window for a customer who has an invoice that is eligible for a discount for timely payment. QuickBooks has displayed a message that discounts are available. However, if multiple invoices are listed in the transaction window, the only clue you have to recognize an invoice with such a discount is the fact that the Disc. Date column shows the date by which the invoice must be paid to receive the discount. For invoices without discount terms, that column is blank in the Receive Payments window—in fact, if there are no invoices with available discounts for a customer, the Disc. Date column does not appear at all.
FIGURE 10-4 |
A discount date appears for invoices that are eligible for a discount. |
QuickBooks doesn’t apply the discount automatically. Instead, you must select the invoice (unless QuickBooks automatically selected it in order to apply the payment) and click the Discount And Credits button to see the Discount And Credits dialog connected to this invoice.
If the payment arrived by the discount date, QuickBooks inserts the amount of the discount to use. Accept the amount of discount and enter a Discount Account (see “Posting Discounts to a Sales Discount Account” later in this chapter). If the payment did not arrive by the discount date, QuickBooks displays 0.00 as the discount amount, which can be changed at your discretion. Click Done to return to the Receive Payments window. You’ll see that QuickBooks has added a discount column and displayed the discount amount in that column. If the net amount and the customer payment amount are the same, the invoice is now paid off.
Applying Discounts for Untimely Payments
Sometimes customers expect to take the discount even if the payment arrives after the discount date. You can apply the payment to the invoice and leave a balance due for the discount amount deducted by the customer. Or, as a goodwill gesture, you can give the customer the discount even though the payment is late.
When you click the Discount And Credits button in that case, QuickBooks does not automatically fill in the discount amount, because the discount period has now passed. To preserve your goodwill with that customer, simply enter the amount of the discount manually, select the posting account, and then click Done to apply the discount to the invoice.
Posting Discounts to a Sales Discount Account
You should create a specific account in your chart of accounts to track the discount amounts you allow your customers to take. You could post the amounts taken to your regular sales account, which would have the effect of reducing the total sales reported in that account. A better approach would be to create a separate account, such as “Discounts on Sales” (account type should be Income), so you can easily track the discounts you’re allowing your customers to take over time.
Caution: If there’s an account named Discounts in the part of your chart of accounts that’s devoted to expenses or cost of goods, don’t use that account for your customer discounts, because it’s there to track the discounts you take with your vendors.
Printing a Receipt for an Invoice Payment
You can print a receipt for an invoice payment by clicking the Print icon at the top of the Receive Payments window. Most customers don’t expect printed receipts for invoice payments, but you may have a customer who requests one.
Handling Cash Sales
In QuickBooks, a cash sale is handled via a transaction called a Sales Receipt. When entering a sale using a Sales Receipt, the payment you take can be in the form of cash, check, e-check, or credit/debit card. This means you have no accounts receivable as a result of the transaction. Most restaurants and retail businesses that use QuickBooks use Sales Receipts to record their sales.
There are two methods for handling cash sales in QuickBooks:
• Record each cash sale as a separate record. This is useful for tracking sales of products or services to customers. It provides a way to maintain historical records about those customers in addition to tracking income and inventory.
• Record sales in batches (usually one batch for each business day). This method tracks income and inventory when you have no desire to maintain historical information about each customer that pays cash.
To record a cash sale, choose Customers | Enter Sales Receipts from the menu bar, which opens the Enter Sales Receipts window shown in Figure 10-5.
FIGURE 10-5 |
A Sales Receipt form is like an invoice, a receive payment form, and a printable customer receipt, all rolled into one transaction window. |
ProAdvisor RecommendsIs It Time for a Dedicated Point of Sale System?
If you’re running a retail store, the Sales Receipt feature in QuickBooks isn’t necessarily the most efficient way to handle your transactions and manage your inventory. You should consider using specialized retail software, such as QuickBooks Point of Sale, which makes it easy to process the payment at the end of a sale, tracks your inventory, and helps you better manage your cash. If you want to learn more about the QuickBooks Point of Sale product, visit the website: payments.intuit.com.
Entering Cash Sale Data
If you want to track customer information, enter a name in the Customer:Job field or select the name from the drop-down list. If the customer doesn’t exist, you can add a new customer by choosing <Add New>.
If you don’t want to track customers, create a customer for cash sales, such as “Cash Customer.” Even if you use a generic customer name, you can still type in the actual customer name and address in the Sold To field. (You’ll have to add this field to the default Sales Receipt template—see Chapter 24 to learn more about customizing transaction templates.) In the future, you can run the Sales by Ship To Address Report (Reports | Sales | Sales By Ship To Address) to view a report that shows the transactions for this generic “cash sale” customer that includes the information you’ve entered in the Sold To field. You can use this report for this purpose, because behind the scenes QuickBooks tracks Sold To and Ship To as the same field type.
Use the payment buttons (as shown in Figure 10-5) on the Sales Receipt form to indicate the type of payment being received. From there, the Enter Sales Receipts window works exactly the way it works for invoices and payments—just fill in the information. To save the record, click the Save button on the Main tab of the Enter Sales Receipts ribbon bar. You can also select Save & New to open a new blank record or click Save & Close if you’re finished.
ProAdvisor Tip: Some fields are missing from the default QuickBooks cash receipts template (named Custom Sales Receipt) that you might find useful when recording a cash sale. For example, there’s no place for a sales rep, which is needed if you’re paying commissions on cash sales or you just want to track the person who made the sale. There’s also no Ship To address if the customer pays cash and wants delivery, nor is there a Ship Via field. You can learn more about customizing templates in general in Chapter 24.
Handling Batches of Cash Sales
If you operate a restaurant, you can batch and enter your cash transactions on a daily basis. This works only if you don’t care about maintaining information about the customers and no customer expects a printed receipt from QuickBooks. This technique also works if you have a business in which sales and service personnel return to the office each day with customer payments in hand.
Create a customized template using the steps described in Chapter 24, with the following guidelines:
• Name the template, for example, “Batch Sales.”
• On the Header tab, keep only the Date and Sale Number fields in the header part of the template.
• On the Columns tab, deselect all the optional fields, leaving only the Item, Description, and Amount columns selected.
• On the Footer tab, remove the Message field.
To batch-process cash sales, use the new template just described with the following procedures:
• Use a customer named “Cash” or “DailySales.”
• Create a Service type or Other Charge type item called “Daily Sales.”
• In the line item section of the Sales Receipt, you can either use a separate line for each sale that day or enter the item once to capture the total for the day.
• Click the Save & Close button at the end of the day. If you need to close the window during the day, you can reopen the Sales Receipt window and click the Previous button to find that day’s receipt and add to it as needed.
Tracking Your Cash Drawer in QuickBooks
If you deal in real cash, have a cash register, and are not using QuickBooks Point of Sale (see “ProAdvisor Recommends: Is It Time for a Dedicated Point of Sale System?” in the previous section), consider these suggested steps for keeping track of your cash drawer.
There are two basic ways to track receipts from cash sales separate from customer payments; choose the one that best suits your needs:
• Post the cash receipts to the Undeposited Funds account but deposit those funds separately from noncash payments when you work in the QuickBooks Payments To Deposit window.
• Post the cash receipts directly to a new bank account called “Cash in Drawer” (or something similar). Then, when you empty the drawer and deposit the cash into your bank account, you can record it in QuickBooks by making a Transfer (Banking | Transfer Funds) from the cash drawer account into the appropriate bank account.
The advantage of having a Cash in Drawer account is that you can match the contents of the physical till of your cash register to an account in QuickBooks. In a perfect world, you’ll open the register for the Cash in Drawer account in QuickBooks and see that it matches your actual drawer count. The world isn’t perfect, however, and sometimes the two amounts will not be equal. To resolve this, refer to the next section, “Handling the Over and Short Problem.”
Handling the Over and Short Problem
If you literally take cash for cash sales, when you count the money in the till at the end of the day, you may find that the sales total recorded doesn’t match the cash you expected to find in the till. Or you may find that the money you posted to deposit to the bank doesn’t match the amount of money you put into the little brown bag you took to the bank.
One of the problems you face is how to handle this in QuickBooks. If you post $100.00 in cash sales but have only $99.50 in cash to take to the bank, how do you handle the missing 50 cents? You can’t just post $100.00 to your bank account (well, you could, but your bank account won’t reconcile).
You can easily account for the over/short dilemma in your bookkeeping procedures. In many cases, by the way, the Overs and Shorts balance out—short one day, over another.
Creating Over and Short Accounts
To track over/short, you need to have some place to post the discrepancies, which means you have to create some new accounts in your chart of accounts, as follows:
• Create an account named “Over,” using the account type Income.
• Create an account named “Short,” using the account type Income.
If you want to see a net number for over/short (a good idea), create three accounts. Create the parent account first and name it “Over/Short,” and then make the Over and Short accounts subaccounts of the parent account. If you use account numbers, make the three numbers sequential—for instance:
• Over/Short (parent account)
• Over (subaccount)
• Short (subaccount)
Creating Over and Short Items
If you track cash sales by tracking batches of sales in a Sales Receipt transaction, you need items for your overages and shortages (in QuickBooks, you need items for everything that’s connected with entering sales data in a transaction window). Create items for overages and shortages as follows:
• Create two Other Charge items, one named “Overage,” the other named “Shortage.”
• Don’t assign a price.
• Make the items nontaxable.
• Link each item to the appropriate account (or subaccount) that you just created for Over/Short.
Now that you have the necessary accounts and items, use the Over and Short items right in the Enter Sales Receipts window to adjust the difference between the amount of money you’ve accumulated in the cash-sale transactions and the amount of money you’re actually depositing to the bank. It’s your last transaction of the day. Remember to use a minus sign before the figure when you use the Short item.
Recording Bank Deposits from the Undeposited Funds Account
When you receive a customer payment or save a Sales Receipt, by default, QuickBooks posts the offsetting total on that receipt to the Undeposited Funds account. Then when it’s time to go to the bank, you have to tell QuickBooks about your bank deposit.
Choosing the Payments to Deposit
As you’ve been completing the receive payment and cash sales forms, QuickBooks has been keeping a list of these transactions in the Undeposited Funds account. These transactions remain in Undeposited Funds until you clear them by depositing them into your bank account.
To tell QuickBooks about the details of your bank deposit, choose Banking | Make Deposits from the menu bar, which brings up the Payments To Deposit window, shown in Figure 10-6.
FIGURE 10-6 |
All the income you’ve collected since the last bank deposit is waiting to be deposited. |
ProAdvisor Tip: You may have other deposits to make, perhaps refunds, loan proceeds, capital infusion, or some other type of deposit. Don’t worry—you can tell QuickBooks about them in the next transaction window. This window is displaying only the payments you’ve entered into QuickBooks through customer-based transaction windows.
Notice the following about the Payments To Deposit window:
• The Type column displays information about the payment type for each transaction—PMT for payment of an invoice and RCPT for a cash sale (as shown in Figure 10-6).
• The Payment Method column displays the specific payment method for each transaction, such as cash, check, a specific credit card, and so on.
This information is important because you should match it to the way your bank records deposits; otherwise, bank reconciliation becomes much more complicated.
For example, your bank probably lists credit card deposits separately from a deposit total for cash and checks, even if all the money was deposited the same day. That’s because your credit card deposits are probably made directly to your bank account by your merchant account bank.
Select Deposit Items
If you have only a few transactions to deposit, select those you just deposited (when you went to the bank) by clicking their listings to place a check mark in the left column. Click Select All if you took all the payments to the bank for deposit.
Separate Deposit Items by Payment Method
If you have to separate deposits by type, select a payment method from the View Payment Method Type drop-down list at the top of the Payments To Deposit window. Choose Selected Types to open the Select Payment Types list and choose either individual or multiple payment types to include in the same deposit.
For example, you may use the Other category to signify a money order or a traveler’s check and list those items on the same deposit slip in which you listed checks. When you select a particular payment method from the list, the listings on the Payments To Deposit window change to include only the payments that match that payment method.
Separate Deposits by Bank Account
If you’re depositing money into multiple bank accounts, select only the transactions that go into the first account. After you complete the deposit, start this process again and deposit the remaining transactions into the other account(s).
Credit Card Deposits
You shouldn’t deposit credit card payments until your merchant bank notifies you that the funds have been placed in your account. If you have QuickBooks online banking, the deposit shows up in the downloaded report from your bank (see Chapter 16 to learn about managing online banking transactions).
• If you have online access to your merchant card account, the transfer will appear on the activities report on the bank’s website.
• If you don’t have any form of online access, you’ll have to wait for the monthly statement to arrive (or contact the bank periodically to see if anything showed up in your account).
If your merchant bank deducts fees before transferring funds, learn how to deposit the net amount in the section “Calculating Merchant Card Fees,” later in this chapter.
Working in the Make Deposits Window
After you select the appropriate payment method (or select all payments), click OK in the Payments To Deposit window to bring up the Make Deposits window shown in Figure 10-7.
FIGURE 10-7 |
The Make Deposits form looks a lot like a bank deposit slip. |
Select the bank account you’re using for this deposit. Then make sure the date matches the day you physically deposit the money.
Adding Items to the Deposit
If you want to add deposit items that weren’t in the Payments To Deposit window, click anywhere in the Received From column to make it accessible and select an existing name by clicking the arrow, or click <Add New> to enter a name that isn’t in your system. If the source of the check is any entity that isn’t a customer or vendor (perhaps you’re depositing your own check to put additional capital into the company, or you have a check representing a bank loan), you can either skip the Received From column or add the name to the Other Names List. (If you don’t need to track the entity as a customer or vendor, it’s fine to skip the name.)
Press TAB to move to the From Account column and enter the account to which you’re posting this transaction. Here are examples and basic instructions on how to enter the most common deposits (that are not customer payments):
• If the check you’re depositing represents a bank loan, use the liability account for that bank loan (you can create it here by choosing <Add New> if you didn’t think to set up the account earlier). The bank should be in your Vendors list, because you have to write checks to repay the loan.
• If the check you’re depositing represents an infusion of capital from you, use the owner’s capital account in the Equity section of your chart of accounts.
• If the check is a refund for an expense (perhaps you overpaid someone, and they’re returning money to you), use the vendor’s name and post the deposit to the same expense account you used for the original transaction.
• If the check is a rebate from a manufacturer instead of the vendor, skip the Received From column and post the amount to the original expense account you used when you purchased the item.
• Use the TAB key to move through the rest of the columns, which are self-explanatory.
Calculating Merchant Card Fees
If your merchant card bank deposits the gross amount of each transaction and charges your bank account for the total fees due at the end of the month, you don’t have to do anything special to deposit credit card payments. You can deal with the fees when your bank statement arrives by entering the fee directly in the bank account register, posting the amount to the merchant card fee expense account.
If your merchant card bank deducts fees from transactions and deposits the net proceeds to your account, it takes a few extra steps to track credit card transactions and deposit the correct amount.
1. Select the credit card transactions in the Payments To Deposit window—these are gross amounts, representing the sales price you charged (and the customer paid). Then click OK to move the payments to the Make Deposits window.
2. In the first empty line below the transactions that were transferred to the Make Deposits window, click the From Account column and select the account to which you post merchant card fees.
3. Move to the Amount column and enter the fee as a negative number. Now, the net matches the amount that the merchant card company deposited in your bank account, and your merchant card expense has been posted to the general ledger.
ProAdvisor Tip: Using the QuickBooks Merchant Service can make it easier to track and account for customer credit card payments. With this service, your customer’s credit card charges are processed directly through QuickBooks and you can download the fees directly into your check register. They appear the way they do in your bank statement, which can prevent data entry errors and reduce the time it takes to reconcile your bank account. Learn more about Intuit’s Merchant Service options at www.payments.intuit.com.
Getting Cash Back from Deposits
If you’re getting cash back from your deposit, you can tell QuickBooks about it directly on the Make Deposits window, instead of making a journal entry to adjust the total of collected payments against the total of the bank deposit.
Enter the account to which you’re posting the cash (usually a petty cash or draw account), and then enter the amount of cash you want to get back from this deposit. Even though you can put the cash in your pocket, you should account for it. As you spend the cash for business expenses, you can post the expenses directly in the same petty cash account register.
Printing Deposit Slips
If you want to print a deposit slip or a deposit summary, click the Print button at the top of the Make Deposits window. QuickBooks asks whether you want to print a deposit slip and summary or just a deposit summary.
If you want to print a deposit slip that your bank will accept, you must order printable deposit slips from QuickBooks. The QuickBooks deposit slips are guaranteed to be acceptable to your bank. You must have a laser printer or inkjet printer to use them. When you print the deposit slip, a tear-off section at the bottom of the page has a deposit summary. Keep that section for your own records and take the rest of the page to the bank along with your money.
If you don’t have QuickBooks deposit slips, select Deposit Summary Only and fill out your bank deposit slip manually. Be sure to fill out the payment method field (cash or check), or QuickBooks won’t print the deposit slip. A Print Lists dialog appears so you can change printers, adjust margins, and even print in color. Choose Print to send the deposit information to the printer. When you return to the Make Deposits window, click Save & Close to save the deposit.
Keeping Track of Accounts Receivable
Collecting the money owed to you is likely one of your most important tasks when running a business. You have to track what’s owed and who owes it, and then devote time and effort to collect it. QuickBooks offers several tools and reports that give you what you need to manage your Accounts Receivable efficiently.
Getting the Most from the Customer Center
In Chapter 3, you were introduced to the Customer Center, where you access and work with your customers and jobs as well as view all the transactions associated with them. The Customer Center also contains links that give you quick access to accounts receivable reports and the Income Tracker, a tool that will help you keep your client balances in check.
The Income Tracker
The Income Tracker provides a comprehensive view of all the customer-related transactions you’ve entered into your QuickBooks file. From this list, you can review the details of any transaction by double-clicking it.
Use the Income Tracker to take follow-up action on past-due transactions or outstanding estimates, or just to send an e-mail to stay in touch with a valued customer. You can access the Income Tracker from the Customer Center.
1. Open the Customer Center by choosing Customers | Customer Center or by clicking the Customers icon on the Icon Bar.
2. Click the Income Tracker button located at the top of the window. The Income Tracker opens, displaying all of your customer’s transactions.
At the top of the Income Tracker window, you’ll find totals for Unbilled (open) estimates, Unpaid invoices, Overdue invoices, and Paid receipts received in the last 30 days. Clicking the boxes that contain these totals will quickly filter the list of transactions displayed below. In our example, there are two overdue invoices totaling $1547.01.
Another way to control which transactions appear in the list is by using one or all of the Customer:Job, Type, Status, or Date filters located at the top of the Income Tracker window. In addition, the list of transactions displayed can be re-sorted by clicking any one of the column headings.
Use the Select drop-down menu (in the Action column) to take an action on a specific transaction. For example, if you’re ready to create an invoice for an open estimate, you can use the Select menu for that purpose. If you want to print multiple transactions at once, you can click the Batch Actions button located at the bottom of the window. Maybe you want to create a new sales-related transaction while working in the Income Tracker—if so, you can click the Manage Transactions button at the bottom of the window.
The Collections Center
The Collections Center is an optional feature that has to be turned on by you. When enabled, it’s located within the Customer Center. Its purpose is to help you keep track of past-due and almost past-due customer balances while giving you an easy way to send e-mail reminders to the customers that are listed there.
To enable the Collection Center feature, choose Edit | Preferences | Sales & Customers | Company Preferences | Enable Collections Center. A Collections Center button will appear in the Customer Center. Follow these steps to open both the Customer Center and Collections Center:
1. Open the Customer Center by choosing Customers | Customer Center or by clicking the Customers icon on the Icon Bar.
2. Click the Collections Center button located at the top of the window. The Collections Center opens to the Overdue tab.
From this list, you can review the details of individual invoices in question by double-clicking an invoice. The list can also be sorted by balance or days overdue by clicking the appropriate column heading. If you’ve entered an e-mail address in the customer’s record, you can also send a reminder e-mail to one or all of the customers on this list. Just click Select And Send Email at the top of the Overdue tab window. You’ll see a yellow alert icon in the Notes/Warnings column if an e-mail address is missing. Clicking this icon allows you to add an e-mail address to the customer’s record if you choose.
The Notes icon next to the customer name lets you document your collections activities or view previous entries. To see a list of customers that have upcoming invoices due, select the Almost Due tab.
Reports You Can Run from the Customer Center
You can run some key reports on individual customers right from the Customer Center. Simply highlight the customer or job and click the Reports links located in the upper-right corner of the customer information pane. The following reports are available:
• Quick Report Displays all transactions related to that customer within a specified date range.
• Open Balance Displays the transactions (invoices, payments, and credit memos) that make up a customer’s current balance.
• Show Estimates Displays all estimates created for the customer within a specified date range.
• Customer Snapshot Displays a dashboard-like view of a customer’s relationship with you (including what they buy, how they pay, and how long they’ve been doing business with you).
Running A/R Aging Reports
A/R aging reports are lists of the money owed you by your customers, and they’re available in quite a few formats. They’re designed for you, not for your customers. You run them whenever you need to know the extent of your receivables. Many companies run an aging report every morning, just to keep an eye on the amount of money due them on a particular day.
ProAdvisor RecommendsAccounts Receivable (A/R) Totals
The total amount of A/R is the value of your A/R asset. It can be an important asset—in fact, banks give lines of credit and loans using the A/R balance as part of the collateral.
When you look at your balance sheet, the general ledger A/R balance and the total on the A/R aging report should be the same (for the same date)—not close, not almost, but exactly the same.
If your A/R account balance doesn’t match your A/R report for the same date, it likely means that the A/R account balance was changed using a journal entry (versus via a transaction such as an invoice or a customer payment).
The quickest way to find a journal entry (or entries) posted directly to the A/R account is to run a Quick Report for this account. With the chart of accounts open, highlight your A/R account. Click the Reports button at the bottom of the window and select Quick Report. By default, this report will show every transaction ever posted to this account. Your job is to find journal transactions in this report, and you can do that either by sorting the report by transaction type or filtering it to show only the “journal” transactions (Chapter 26 covers customizing reports).
If you find journal transactions, they should be reviewed and either replaced with a transactional document or removed altogether. Consult with your accountant if you’re not sure how to handle a particular transaction.
A couple of aging reports are available in QuickBooks, and you can also customize any built-in reports so they report data exactly the way you want it. To see an aging report, choose Reports | Customers & Receivables, and then choose either A/R Aging Summary or A/R Aging Detail (these reports are explained in the upcoming sections).
A/R Aging Summary Reports
The quickest way to see how much of the money is owed to you is current or past due is to run the A/R Aging Summary (see Figure 10-8). This report produces a listing of customer balances by aging period (such as 31–60, or 61–90 days).
FIGURE 10-8 |
An A/R Aging Summary report provides totals for each customer, broken down by aging periods. |
A/R Aging Detail Reports
If you choose Aging Detail from the Customers & Receivables reports menu, you see a much more comprehensive report, such as the one shown in Figure 10-9. The report is not only sorted by aging period, but it also shows individual invoice, finance charge, and credit memo transactions for each aging period.
FIGURE 10-9 |
A/R Aging Detail reports display information about every transaction that’s involved in each customer’s A/R balance. |
Customizing Aging Reports
If you don’t need to see all of the columns in the A/R Aging Detail report, or you’d prefer to see the information displayed in a different manner, you can customize the report. Start by clicking the Customize Report button at the top of the window to open the Modify Report window shown in Figure 10-10.
FIGURE 10-10 |
Customize an A/R aging report in the Modify Report window to get exactly the information you need. |
Customizing the Columns
The most common customization is to get rid of any column you don’t care about. For example, if you use the Classes feature but don’t care about that information in your aging report, you can get rid of the column. Or you might want to get rid of the Terms column since it doesn’t impact the totals. To remove a column, scroll through the Columns list and click to remove the check mark, and then click OK to accept your changes. The column disappears from the report.
While you’re looking at the list of column names, you may find a column heading that’s not currently selected but that contains information you’d like to include in your report. If so, click that column listing to place a check mark next to it and then click OK. The column will appear on the report and the data linked to it is displayed.
Filtering Information
If you want to produce an aging report for a special purpose, you can easily filter the information so it meets criteria important to you. To filter your aging report, click the Filters tab (see Figure 10-11).
FIGURE 10-11 |
Filters let you specify criteria for displaying data. |
Select a filter and then set the conditions for it. (Each filter has its own specific type of criteria.) For example, you can use this feature if you want to see only those customers with receivables higher than a certain figure or older than a certain aging period.
Caution: If you filter the report in a way that affects the amounts, your report total will not match your A/R account balance. Use this type of filter only to get certain types of information for yourself, not for an “official” aging report.
Configuring Header/Footer Data
You can customize the text that appears in the header and footer of the report by making changes in the Header/Footer tab shown in Figure 10-12.
FIGURE 10-12 |
Specify the text you want to display on the top and bottom of the report. |
You’ll probably find that your decisions about the contents of the header and footer depend on whether you’re viewing the report or printing it. And, if you’re printing it, some stuff is more important if an outsider (a banker or your accountant) will be the recipient of the report, rather than your credit manager.
For example, the date and time of preparation is more important for outsiders than for you. Incidentally, on the Header/Footer tab, the Date Prepared field has a meaningless date—don’t panic, your computer hasn’t lost track of the date. That date is a format, not today’s date. Click the arrow to the right of the field to see the other formats for inserting the date. The Page Number field also has a variety of formats to choose from.
You can eliminate a Header/Footer field by removing the check mark from the field’s check box. For fields you want to print, you can change the text. You can also change the layout by choosing a different Alignment option from the drop-down list.
Customizing the Appearance
Click the Fonts & Numbers tab to change the format of the report. You can change the way negative numbers are displayed, and you can change the fonts for any or all of the individual elements in the report.
When you close the report window, QuickBooks may ask if you want to memorize the report with the changes you made (if you told QuickBooks to stop asking this, you won’t see the message). Click Yes so you don’t have to go through all the modifications again. If QuickBooks doesn’t ask, memorize the report using the instructions in the next section.
Memorizing Aging Reports
If you’ve customized a report and have the columns, data, and formatting you need, there’s no reason to reinvent the wheel the next time you need the same information. Instead of going through the customization process again next month, memorize the report as you designed it. Then you can fetch it whenever you need it.
Click the Memorize button in the report window. When the Memorize Report dialog appears, enter a new name for the report, optionally save it within a report group, and click OK.
From now on, this report name will be on the list of memorized reports you can select from when you choose Reports | Memorized Reports from the menu bar.
ProAdvisor Tip: When you use a memorized report, only the criteria and formatting is memorized. Each time you open the report, the data is generated from the QuickBooks transaction records, so you get current, accurate information.
Printing Reports
Whether you’re using the standard format or one you’ve customized, you’ll probably want to print the report. When you’re in a report window, click the Print button at the top of the window and select Report to bring up the Print Reports dialog. If the report is wide, use the Margins tab to set new margins, and use the options on the Settings tab to customize other printing options. You can also use the Fit Report To options to fit all the columns or rows on your report to a page.
Running Customer and Job Reports
Customer and job reports are designed to give you information about the selected customers/jobs instead of providing information on the totals for your business. Plenty of customer reports are available from the menu that appears when you choose Reports | Customers & Receivables, including but not limited to the following:
• Customer Balance Summary Report Lists the current total balance owed for each customer.
• Customer Balance Detail Report Lists every transaction for each customer with a net subtotal for each customer and job.
• Open Invoices Report Lists all unpaid invoices, sorted and subtotaled by customer and job.
• Collections Report Includes the contact name and telephone number, along with details about invoices with balances due. With this report in hand, you’re all set to call the customer and have a conversation, and you can answer any questions about invoice details.
• Accounts Receivable Graph Shows a graphic representation of the accounts receivable. For a quick overview, there’s nothing like a graph.
• Unbilled Costs By Job Tracks job expenses that were linked to customers or jobs that you haven’t yet invoiced.
• Transaction List By Customer Displays individual transactions of all types for each customer.
• Customer Contact List Displays an alphabetical list of customers along with the contact, telephone numbers, billing address, and current open balance for each. Give this list to the person in charge of collections.
• Item Price List Lists all your items with their prices and preferred vendors.
Assessing Finance Charges
The amount of time spent tracking, analyzing, and chasing receivables can be substantial. Imposing finance charges can be a way to help offset the time and resources needed to collect past-due balances and can act as an incentive to get your customers to pay on time!
Configuring Finance Charges
Your company’s finance charges are configured as part of your company preferences. It’s from here that you’ll establish the rate and parameters that QuickBooks uses to create a finance charge invoice for your customers with past-due balances. Choose Edit | Preferences to open the Preferences dialog. Then click the Finance Charge icon in the left pane and select the Company Preferences tab (see Figure 10-13).
FIGURE 10-13 |
Configure the way in which you’ll impose finance charges on overdue balances. |
Here are some guidelines for filling out this dialog:
• In the Annual Interest Rate field, replacing the default data (0.00%) with any positive number automatically enables the Finance Charges feature (the dialog has no Yes/No check box to enable or disable finance charges).
• Notice that the interest rate is annual. So, for example, if you want to charge 1.5 percent a month, enter 18% in the Annual Interest Rate field.
• You can assess a Minimum Finance Charge for overdue balances. QuickBooks will calculate the finance charge, and if it’s less than the minimum, the amount will be rolled up to the minimum charge you specify here.
• Use the Grace Period field to enter the number of days of lateness you permit before finance charges are assessed.
• During setup, QuickBooks probably created an account for finance charges. If so, select it in the Finance Charge Account field. If not, enter (or create) the account you want to use to post finance charges (it’s an income account).
• The issue of assessing finance charges on overdue finance charges is a sticky one. In fact, this calculation method may be illegal in your state, so check with the appropriate agency before implementing it. Selecting the Assess Finance Charges On Overdue Finance Charges option means, for example, that a customer who owed $100.00 last month and had a finance charge assessed of $2.00 now owes $102.00. As a result, the next finance charge is assessed on a balance of $102.00 (instead of on the original overdue balance of $100.00).
• In the Calculate Charges From area, specify whether to calculate the finance charge from the due date or the invoice/billed date (it’s common to use the due date).
• QuickBooks creates an invoice automatically when finance charges are assessed in order to have a permanent record of the transaction. By default, these invoices aren’t printed; they’re just accumulated along with the overdue invoices so they’ll print as a line item on a monthly statement. You can opt to have the finance charge invoices printed by adding a check mark to Mark Finance Charge Invoices “To Be Printed,” which you should do only if you’re planning to mail invoices to nudge your customers for payment.
Click OK to save your settings after you’ve filled out the Preferences window.
Assessing Finance Charges
You should assess finance charges just before you create customer statements, which is commonly a monthly chore. Choose Customers | Assess Finance Charges from the menu bar. The Assess Finance Charges window opens (see Figure 10-14) with a list of all the customers with overdue balances.
FIGURE 10-14 |
QuickBooks automatically assesses finance charges as of the assessment date you specify. |
If you have any customers that have made payments that you haven’t yet applied to an invoice, or if any customers have credits that you haven’t yet applied to an invoice, an asterisk (*) appears to the left of the customer or job name. Close the Assess Finance Charges window and correct the situation, and then return to this window.
Choosing the Assessment Date
Change the Assessment Date field (which displays the current date) to the date on which you actually want to impose the charge—this date appears on customer statements. It’s common to assess finance charges on the last day of the month. When you press TAB to move out of the date field, the finance charges are recalculated to reflect the new date.
Selecting the Customers
You can eliminate a customer from the process by clicking in the Assess column to remove the check mark. QuickBooks does not have a finance charge assessment option on each customer record, so all customers with overdue balances are included when you assess finance charges. This means you have to know off the top of your head which customers are liable for finance charges and which aren’t—or you have to keep a list near your desk.
It can be time consuming to deselect each customer, so if you have only a few customers for whom you reserve this process, choose Unmark All, and then reselect the customers you want to include.
Changing the Amounts
You can change the calculated total if you wish (a good idea if there are credit memos floating around that you’re not ready to apply against any invoices). Just click the amount displayed in the Finance Charge column to activate that column for that customer. Then enter a new finance charge amount. If you need to calculate the new figure (perhaps you’re giving credit for a floating credit memo), press the equal sign (=) on your keyboard to use the QuickBooks built-in calculator.
Checking the History
To make sure you don’t assess a charge that isn’t really due (or fair), you can double-check by viewing a customer’s history from the Assess Finance Charges window. Highlight a customer listing and click the Collection History button to see a Collections Report for the selected customer (see Figure 10-15). Your mouse pointer turns into a magnifying glass with the letter “z” (for “zoom”) in it when you position it over a line item. Double-click any line item to display the original transaction window if you need to examine the details.
FIGURE 10-15 |
You can check a customer’s history to make sure the finance charges are legitimate and fair. |
Saving the Finance Charge Invoices
If you’re sure all the calculations and figures are correct, click Assess Charges in the Assess Finance Charges window. When you create your customer statements, the finance charges will appear. If you’ve opted to skip printing the finance charge assessments as invoices, there’s nothing more to do. If you’re printing the finance charges, see the next paragraph.
Selecting Printing Options
If you want to print the finance charge invoices, be sure to select the Mark Invoices “To Be Printed” check box on the Assess Finance Charges window. You can send the printed copies to your customers as a nagging reminder. If you only care about having the finance charge on the monthly statement (the common method for most businesses), deselect the printing option.
To print the finance charge invoices, choose File | Print Forms | Invoices. The list of unprinted invoices appears, and unless you have regular invoices you didn’t print yet, the list includes only the finance charge invoices. If the list is correct, click OK to continue on to the printing process.
Sending Statements
On a periodic basis, you should send statements to your customers. (Most businesses send statements monthly.) They serve a couple of purposes: they remind customers of outstanding balances, and they provide detailed documentation of your records, which your customers can match against their own records.
If you’re coming to QuickBooks from a manual system or a system in which you tracked invoices and payments in a spreadsheet, these statements will seem like a miraculous tool. Creating statements from customer cards maintained manually in a word processing document or in a spreadsheet is a nightmare. As a result, companies without real accounting software generally don’t even bother to try.
Entering Statement Charges
Before creating statements, you should create any transactions that should appear on the statements. Invoices and payments appear automatically, but you may want to add statement charges. A statement charge is a charge you want to pass on to a customer for which you don’t create an invoice. You can use statement charges for special charges for certain customers, such as a general overhead charge, or a charge you apply for your own out-of-pocket expenses (instead of using the reimbursable expenses feature for expenses incurred on behalf of the customer). Some companies use statement charges instead of invoices for invoicing regular retainer payments.
You must add statement charges before you create the statements (or else the charges won’t show up on the statements). Statement charges use items from your Item List, but you cannot use any of the following types of items:
• Items that are taxable, because the statement charge can’t apply the tax
• Items that have percentage discounts (instead of discounts with specific amounts), because the statement charge can’t look up the discount percentage (and therefore can’t apply it)
• Items that represent a payment transaction, because those are negative charges, which a statement charge doesn’t understand
Statement charges are recorded directly in a customer’s register or in the register for a specific job. To create a statement charge, choose Customers | Enter Statement Charges from the menu bar to open the customer register, which looks like Figure 10-16. By default, QuickBooks opens the register for the first customer in your Customers & Jobs List; you can use the drop-down list at the top of the window to select a different customer. Then follow these steps to add statement charges (use the TAB key to move through the register’s fields):
FIGURE 10-16 |
Statement charges are entered directly in a customer or job register. |
1. Select the appropriate customer or job from the drop-down list in the Customer:Job field at the top of the register.
2. Enter the date on which the statement charge is being assessed.
3. In the Item field, select the item for the statement charge from the drop-down list.
4. Enter a quantity in the Qty field if the item is invoiced by quantity.
5. Enter a rate (or accept the default rate if one exists) if you’re using the Qty field.
6. Enter the amount charged if the Qty and Rate fields aren’t used (if they are, the total amount is entered automatically).
7. Optionally, edit the item description.
8. Optionally, enter the billed date, which does not have to match the transaction date in the first column of the register. Postdating or predating this field determines which statement it appears on.
9. Optionally, enter the due date, which affects your aging reports and your finance charge calculations.
10. When all the fields you want to use are filled in, click Record to save the transaction.
Continue to select customers and/or jobs to enter additional statement charges.
Creating Statements
Before you start creating your statements, be sure that all the transactions that should be included on the statements have been entered into the system. Did you forget anything? Applying credit memos? Applying payments? Assessing finance charges? Entering statement charges?
When all customer accounts are up-to-date, choose Customers | Create Statements to open the Create Statements dialog, shown in Figure 10-17.
FIGURE 10-17 |
You can choose which customers will receive a statement and what information that statement will contain. |
Selecting the Date Range
The Statement Period determines which transactions appear on the statement. The printed statement displays the previous balance (the total due before the From date) and includes all transactions that were created within the date range specified for that Statement Period. The starting date should be the day after the last date of your last statement run. If you send monthly statements, choose the first and last days of the current month; if you send statements quarterly, enter the first and last dates of the current quarter—and so on.
If you choose All Open Transactions As Of Statement Date, the printed statement just shows unpaid invoices and charges and unapplied credits. You can narrow the criteria by selecting the option to include only transactions overdue by a certain number of days (which you specify). However, this makes the printed statement more like a list than a standard statement.
Selecting the Customers
You can send statements to all or some of your customers. If you want to send statements only to a select group of customers, click the Multiple Customers option to display a Choose button next to the option. Click the Choose button to bring up a list of customers, and then select each customer you want to include. You can manually select each customer, or select Automatic and then enter text to tell QuickBooks to match that text against all customer names and select the matching customers. (The Automatic match option isn’t efficient for multiple customers because it matches only exact text, not partial text, and therefore matches only one customer at a time.) Click OK when all the appropriate customers are selected.
If you’re sending a statement to one customer only, select One Customer, and then click the arrow next to the text box to scroll through the list of your customers and select the one you want.
To send statements to customers who are designated with a specific customer type, select the Customers Of Type option, and then select the customer type you want to include from the drop-down list. This works, of course, only if you created and used customer types as part of your QuickBooks setup.
ProAdvisor Tip: If you want to send statements to certain customers only, create a customer type for statement recipients, such as “Statements.” Refer to Chapter 3 to learn how to create a new customer type.
Filtering for Send Methods
If the way you send statements varies by customer (the option you selected in the Preferred Delivery Method field of the customer record), you can opt to handle your statement delivery in batches, using one delivery method per batch. To do this, select the Preferred Send Method option, and then select the send method for this batch from the drop-down list that appears:
• E-mail Sends the statements by e-mail using a compatible e-mail application.
• Mail Sends the statements to QuickBooks Billing Solutions, where the invoice is created with a tear-off slip that the customer can use to pay the invoice. QuickBooks mails the invoice. (Additional fees may apply.)
• None Means no special handling. You print the statements, put them in envelopes, and mail them.
Specifying the Printing Options
You can specify the way you want the statements to print using the following criteria and options in the Select Additional Options section:
• You can print one statement for each customer, which lists all transactions for all that customer’s jobs, or you can print a separate statement for each job.
• You can opt to show invoice item details instead of just listing the invoice on the statement. If your invoices have a lot of line items, this could make your statements very long. However, this option can speed up collections since the customer won’t have to call you with questions like, “What makes up this balance?” or “What was that charge for again?” So, if customers often call you after you send less detailed statements, consider this alternative.
• Printing statements in order by ZIP code is handy if you’re printing labels that are sorted by ZIP code. This option is also important if you have a bulk mail permit, because the post office requires bulk mail to be sorted by ZIP code.
• By default, the original due date for each transaction listed on the statement is displayed on the statement. If you have some reason to hide this information from your customers, QuickBooks offers the opportunity to deselect the option.
Specifying the Statements to Skip
You may want to skip statement creation for customers that meet the criteria you set in the Do Not Create Statements section of the dialog. If statements are the only documents you send to customers (you don’t send the individual invoices and credits you create), selecting any of these options makes sense.
If, however, you use statements to make sure you and your customers have matching accounting records, you should create statements for all customers except inactive customers.
Last Call for Finance Charges
If you haven’t assessed finance charges and you want them to appear on the statements, click the Assess Finance Charges button. The Assess Finance Charges window opens, showing customers that have been selected for finance charges.
If you’ve already assessed finance charges, QuickBooks will warn you (when you click the Assess Charges button) that finance charges have already been assessed as of the selected date. If you ignore the message, another round of finance charges is imposed (and you’ll have a lot of angry and distrustful customers). Therefore, this window is useful only if you don’t assess finance charges as described earlier in this chapter.
Previewing the Statements
Before you commit the statements to paper, you can click the Preview button to get an advance look. This is not just to see what the printed output will look like; it’s also a way to look at the selected customer records and to make sure that all the customers you selected are included.
Use the Zoom In button to see the statement and its contents close up. Click the Next Page button to move through all the statements. Click Close to return to the Create Statements window.
Printing the Statements
When everything is just the way it should be, print the statements by clicking the Print button in the Create Statements window. The Print Statements window opens. Here, you can designate the printer you want to use and adjust printer settings.
If you want to first take a look at what will be sent to the printer, click the Preview button. If you like what you see, you can select Print from this window. Keep in mind that clicking the Print button from the Preview window will send the entire statement print job to the default printer (with no additional opportunity to change the print settings).
Customizing Statements
You don’t have to use the standard statement form—you can design your own. The instructions for creating a template with customized fields and columns are in Chapter 24. If you want to create a customized template for statements, think about adding the Terms field to the statement (which is not selected by default). It doesn’t seem fair to tell a customer of amounts past due without reminding the customer of the terms.
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