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Sales forms

Let’s take a brief tour of sales forms in QuickBooks. How many are there.

Very few get this, but there’s actually three. Invoice, Sales Receipt and Credit Memo.

The difference between an invoice and a sales receipt is that in invoice creates a sale and a receivable. That is, the customer owes you for the sale. No money has changed hands.

A sales receipt assumes payment is received at the time of sale. So, no customer balance due is created with a sales receipt.

A Credit memo is a refund. Either it’s a refund that offsets the balance a customer owes, or QuickBooks allows you to create a check to give a cash refund back to the customer. QuickBooks does a really fine job of walking you through that process either way.

Credit memos are more important than a lot of people realize. Sometimes they should be used when an invoice has existed for a while waiting for the customer to pay. Finally, we realize… we’re not going to get paid.

It’s often a mistake to simply go back and void or delete the original invoice. The credit memo form exists just for this purpose. Use that instead.

Items

We sell customers either products or services. This is accomplished in QuickBooks by using items. See the screenshot below.

It’s important to select the right item type. While there are several to choose from, only three are commonly used to sell a company’s products or services. Service is self-explanatory. It’s for selling services.

Inventory Part is for tracking inventory on hand and you won’t have this option unless inventory tracking is turned on in your QuickBooks file.

The third is Non-Inventory Part. That’s just a word QuickBooks made up to describe an item we would create to sell products that we don’t wish to track as inventory on hand.

Entering a description that will commonly be used and setting the correct taxable status as far as sales tax will speed data entry when sales forms are created. The account field is almost always an income type of account from the chart of accounts and will make accounting entries that will show as revenue on your profit and loss statements.  

Estimates and Sales Orders

It’s important to note that QuickBooks has the ability to track proposals for you so you have a record, along with all the details, and can easily turn those proposals into invoices, without entering all that information a second (or third, or…) time.

The Sales Order form is found only n the Premier level of QuickBooks or higher. It allows the business to record a customer’s order, then fill it later. Multiple invoices can be created from one sales order. It’s great for keeping track of special orders or back orders.

Estimates are available in Pro as well as the higher levels of QuickBooks. Most often, this form is used to record the details of a proposed job or project. Multiple invoices can be created from one Estimate. QuickBooks will track what has been invoiced and what hasn’t. There are also terrific report that compare what you expected the various components of a project to cost, and what they cost in reality.

Both sales orders and estimates are non-posting. That is, you can create and delete (if you wanted) at will and your accounting numbers are unaffected.