Customer Sales

Free preview · ~61 min read · from QuickBooks Online Step-by-Step

# Summary: Customer Sales After reading this section, you'll be able to record and track customer sales transactions in QuickBooks Online using invoices, sales receipts, and estimates. You'll configure key sales settings like invoice terms, shipping options, and payment methods, create and manage customer records with contact information and credit limits, and organize multiple jobs for the same customer using sub-customers to group income and expenses by project. These foundational steps enable you to accurately capture revenue, track customer activity, and generate reports to analyze your sales performance.

In this chapter

• Configuring the Sales Settings
• Setting Up Customers
• Sub-customers
• Inactivating Customers
• Merging Customers
• Cash vs. Credit Customers
• Entering Sales Receipts
• What Are Estimates?
• Creating Invoices
• Adding Subtotals to an Invoice
• Adding Attachments to Invoices
• Managing and Customizing Invoices
• Receiving Payments from Customers
• Receiving Payments by Credit Card or ACH
• Handling Partial Payments
• Handling Payments Against Multiple Invoices
• Making Bank Deposits
• Undeposited Funds and Payments to Deposit
• Depositing Checks and Cash
• Adding Additional Funds to the Deposit
• Printing Deposit Slips
• Depositing Credit Card Payments
• Viewing Deposits in the Register
• Running Accounts Receivable Reports
• Viewing the Invoice History
• Do It Yourself: Customer Sales
• Do It Yourself

Chapter review: Customer sales workflow in QuickBooks Online

14 practice questions, with answers.

1. In the New Customer window, you find everything except:

   • Customer Name.
   • Customer Billing and Shipping addresses.
   • Customer Tax Info.
   • Year-to-date sales information. (correct)

   The New Customer window captures the customer's identity, addresses, tax status, terms and other defaults, it is a setup record, not a report. Year-to-date sales figures come from reports such as Sales by Customer Summary or the customer's transaction list.

2. You should record a Sales Receipt when the customer pays:

   • By cash, check, or credit card at the time of sale. (correct)
   • By cash, check, or credit card at the end of the month.
   • Sales tax on the purchase.
   • Their invoice.

   A Sales Receipt is the form for payment collected at the point of sale. It records the income and the money in a single step. If the customer will pay later, you create an Invoice instead and clear it afterwards with Receive Payment.

3. Which statement is false?

   • Sales Receipts are used when you take payment at the time of sale.
   • Invoices decrease Accounts Receivable. (correct)
   • Sales Receipts have no effect on Accounts Receivables.
   • Invoices should be created when customers are going to pay after the date of the initial sale.

   Invoices increase Accounts Receivable: they record income the customer still owes you. It is the Receive Payment transaction that decreases the A/R balance.

4. You may specify payment Terms on the New Customer window; however:

   • The payment Terms will only show on sales receipt transactions.
   • The Terms can only be changed once a year.
   • The sales representative must be informed.
   • You are also permitted to override the Terms on each sale. (correct)

   Terms saved on the customer record are only a default, QuickBooks Online fills them in automatically but lets you change the Terms field on any individual invoice.

5. Your company has just accepted a payment for an invoice. Which of these is NOT one of the ways you can record this payment?

   • Open the invoice and click Receive Payment.
   • Click Receive Payment on the Create button.
   • Open the customer’s transaction list and choose Receive Payment from the invoice’s Action column.
   • Make a Deposit by clicking Create > Bank Deposit. (correct)

   A Bank Deposit moves money that is already sitting in Undeposited Funds into the bank account; it never touches the open invoice. Only a Receive Payment (reached from the invoice, the Create button, or the customer's Action column) applies the payment and reduces Accounts Receivable.

6. Which statement is false when creating transactions?

   • The transaction date should be the date the business activity occurred.
   • You can have a transaction date and a separate service date on invoices.
   • The transaction date should be the date you entered it into QBO. (correct)
   • You don’t need to type in leading 0s and the full year when entering dates.

   The date on a form must be the date the transaction actually happened, not the day you got around to entering it. Otherwise income and expenses land in the wrong period. The optional Service Date field is what records when the work was performed.

7. To record a deposit in QuickBooks Online:

   • Make a separate deposit that includes Checks and Cash deposited at the bank.
   • Make a separate deposit that includes both VISA and MasterCard receipts.
   • Make sure each deposit total matches the Bank Transactions feed or bank statement.
   • All of the above. (correct)

   All three practices serve the same goal: group the receipts in Undeposited Funds the way the money actually arrived at the bank, so every QuickBooks Online deposit matches one line on the statement or bank feed and reconciliation stays simple.

8. Your company has just received an order from a customer who will pay within 30 days. How should you record this transaction in QuickBooks Online?

   • Create an invoice by clicking Invoice on the Create button. (correct)
   • Create a sales receipt by clicking Sales Receipt on the Create button.
   • Make a deposit by clicking Bank Deposit on the Create button.
   • Receive the payment by clicking Receive Payment on the Create button.

   Because payment comes later, the sale belongs on an Invoice. It records the income now and holds the balance in Accounts Receivable. Receive Payment and Bank Deposit come later, once the money actually arrives.

9. When you make a deposit, all of the following are true except:

   • You must print a deposit slip in order to process a deposit. (correct)
   • A Bank Deposit transaction typically transfers money from Undeposited Funds into your bank account.
   • You should separate your deposits by payment type.
   • You should create deposits so that they match exactly with the deposits on your bank statement.

   Printing a deposit slip is an optional convenience, not a requirement, the Bank Deposit transaction records the deposit whether or not you print anything. The other three statements describe the standard deposit workflow.

10. Which statement is true regarding subtotals on invoices?

    • Subtotals never need to be used on invoices because the total is calculated automatically.
    • A Subtotal always calculates the amount of all the lines above it. (correct)
    • You have to use a Subtotal on every invoice.
    • A Subtotal uses the amount of the preceding line to calculate its amount.

    A Subtotal line adds up the lines that come before it, which is how you group a set of items, for example, subtotalling equipment before adding a service line, a discount, or shipping. It is optional, but useful when a discount should apply to only part of the invoice.

11. When creating a customer record, which statement is false?

    • After you enter a Customer Display Name in the Customer window, you cannot use that name in any of the other name lists in QuickBooks Online.
    • You can set defaults for the customer’s sales tax status and payment terms.
    • A sales rep must be selected when creating a new customer. (correct)
    • When you sell to and purchase from the same company, you should create two records with slightly different names, one in the Vendor list, and one in the Customer list.

    A sales rep is optional. The chapter sets it up as a custom field you can leave blank. Display Names really must be unique across every name list, which is exactly why a company that is both a customer and a vendor needs two slightly different names.

12. When receiving payments from customers to whom you have sent invoices, you must:

    • Receive the payment in full. Partial payments cannot be accepted in QuickBooks Online.
    • Enter them directly into the checking account register.
    • Enter the payment into the Receive Payment window and check off the appropriate invoice(s) to which the payment applies. (correct)
    • Delete the invoice so it does not show on the customer’s open records.

    Checking off the specific invoice in the Receive Payment window is what links the money to the sale and clears the right Accounts Receivable balance. Partial payments are allowed. QuickBooks Online keeps tracking the remaining balance due.

13. The Undeposited Funds account tracks:

    • Bad debts.
    • Funds that have been received but not deposited. (correct)
    • Funds that have not been received or deposited.
    • All company sales from the point an invoice is created until it is deposited in the bank.

    Undeposited Funds (also called Payments to Deposit) is the holding account for money you have collected but not yet taken to the bank. A Bank Deposit later clears it into the bank account as one grouped total.

14. When typing an existing customer name in a form, a dialog box opens to suggest that you need to create them. What should you do?

    • Add the customer to the Customer List again.
    • Try a Vendor name instead.
    • Click Cancel to check the name you entered for typos…or just type slower. (correct)
    • None of the above.

    That prompt means QuickBooks Online did not recognise what you typed, almost always a typo or an incomplete match. Cancelling and re-checking the spelling avoids creating a duplicate customer that splits the account's history.