To keep your business running smoothly, you need to be able to keep track of your income. To track your income with accuracy and detail, you most likely need to know when, from who, and for what you’re receiving payment. With that in mind, as part of our series on foundations of basic transactions, let’s look at the “Customer Payments” window.
Where Can I Go to Record Customer Payments?
Like most things in QuickBooks, there are several ways to access the customer payments screen.
1. From the home screen, look for “Receive Payments” in the customer section, just to the right of center.
2. From the Customers drop-down in the top menu, choose “Receive Payments”.
3. In the “Customer Center,” click the “New Transactions” drop-down menu and choose “Receive Payments”
4. Right-click a customer in the “Customer Center” and choose “Receive Payments”
5. From an invoice you’re receiving a payment for, choose “Receive Payments” from the top toolbar.
Most of these options will pre-fill the customer that is selected or on the invoice into the payment window for you.
What Can I Do While I Record a Payment in QuickBooks?
The top toolbar of the Customer Payments window has relatively few buttons compared to some of QuickBooks’ transaction types.
The left half of the bar contains our standard navigation, “new,” “delete,” “print,” “email,” and “attach” buttons. The right half contains some options specific to the payments.
What if I Need to Look For a Specific Customer or Invoice?
Use “Look up Customer/Invoice” to Find Specific Customer or Invoice Information Using Different Criteria
This is a simple search window that lets you locate a customer or invoice and use that as the basis for receiving the payment. If a specific invoice is selected, it will be checked on the list of customer invoices being paid, and the amount of the payment will be automatically set to the amount due on the invoice.
What Happens When I Use “Auto-Apply Payment,” or “Un-Apply Payment” ?
This Button is Context-Sensitive
Depending on your settings and what has been done in creating the invoice so far, it may show as “Auto Apply Payment” or “Un-Apply Payment”.
- Auto Apply Payment will have QuickBooks automatically check off the invoice or invoices that it assumes the payment goes to, based on the amount of the payment and invoices, and the dates.
- If QuickBooks has guessed incorrectly, Un-Apply payment will uncheck all payments and remove any applied amounts, allowing you to manually assign the payment to the correct invoices for the correct amounts.
What if I Need to Use a Discount or Credit As a Customer Payment to an Invoice?
Use “Discounts and Credits” to Apply Either Discounts or Credits to Invoices.
The main difference is credits come from some other transaction, often another payment or a credit memo, that has caused an unapplied credit value in the customer’s A/R, which is then tied to an invoice to pay it either in full or in part.
A discount is a write-off of some of what the customer owes on an invoice, created at the time of payment. This may be suggested automatically by QuickBooks based on the terms you have with the customer.
How Do I Record a Bounced Check I Received from a Customer?
Use “Record Bounced Check” to record a bounced check
This will allow you to record that a customer’s check payment was rejected by the bank, marking the invoice as unpaid again and allowing you to create another invoice recording any applicable bank fees and any service fees you charge the customer for this inconvenience. It will be greyed out on an unsaved invoice, or one that used a non-check transaction type. This is another piece of the customer payments puzzle that we could go on for a while about, so we’ll cover that in more detail in our advanced payments post.
Where is Electronic Payments Processing in QuickBooks Desktop?
Integrate Your QuickBooks Desktop with QuickBooks Payments
The last portions of this toolbar are used if you are or would like to use Intuit’s credit card processing through QuickBooks. The checkbox indicates that you’ll be using the service to process the credit card payment online. The button is there if you haven’t yet purchased this service and wanted to get started with that process online.
What Else Should I Know about Customer Payments in QuickBooks?
The Customer Payment Header Contains Most of the Basic Payment Information
This includes:
- who is the payment for
- what is the amount of the payment
- when did they pay it
- how did they pay
- what number are we using to track it?
Invoicing and Payment Involving Multiple Jobs Under a Single Customer
Note that if an invoice was entered under a job, payment may be received at the customer or job level. However, if an invoice was entered at the customer level, it must be paid at the customer level rather than under a job.
Another thing to note here is that the last field may be check number or reference number, depending on the payment method selected. Further payment method options are available under the more button, and you can create custom payment methods as needed for your reporting.
Below the header, we see the invoices with open balances for this customer that can be paid. Some columns here are not always present and will only appear as needed, such as the “job” column when a customer is selected in the header, or the “discount” or “credit” columns appearing only when one is added.
In this area, you can select which invoices the payment is applied to, as well as the amount being applied to each invoice. You cannot apply an amount greater than the total of the payment, or greater than the amount due on the invoice.
Depending on your preferences, QuickBooks may automatically check off payments based on the amounts and dates, as mentioned previously. If you have turned on the preference “automatically calculate payments” under Payments preferences, you can check off the invoices to pay and set their amounts, and QuickBooks will calculate the total of the payment accordingly.
Properly Address Underpayments & Overpayments in QuickBooks Desktop with These Pointers
If the total of the payment doesn’t match the total due of the invoice(s) selected, you have an over- or underpayment. In these cases, QuickBooks will give you some options in the lower left.
- For an underpayment, you can leave it as-is, applying the amount of the payment and leaving the remainder open to be paid later.
- You can write it off, in which case QuickBooks will ask you which account to write this off to and will create a discount on the payment to that account for the amount of the underpayment.
- For an overpayment, QuickBooks will let you choose to either leave the extra as a credit to be applied to another invoice in the future, or to refund the difference to the customer. We’ll look more closely at refunds in our advanced customer payments article.
That’s it for the basics of the “Receive Payments” window. While many businesses will be downloading payment transactions from a bank or other credit card provider, or perhaps syncing them through a variety of credit card processing systems, sometimes things can go wrong with these downloads or syncs, or the information you get may not best reflect your real-life situation.
For times like that, it’s always good to have a solid grasp on the basics of entering payments and related transactions manually. Once you master it, you can be sure you’re getting solid information on your received payments, every time.
If you have additional questions about what was covered, or finding yourself in a more pressing situation with Accounts Receivable, please contact us!
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