The source describes two primary ways to become certified in QuickBooks: the QuickBooks Certified User certification and the QuickBooks Certified ProAdvisor program. While the Certified User credential is a one-time, paid exam suitable for those seeking immediate employment, the ProAdvisor program offers a free, annually renewable certification geared towards accounting professionals who intend to support multiple clients using QuickBooks. The ProAdvisor program also provides valuable resources, including a dedicated portal for managing clients, free access to QuickBooks Online for the firm’s own use, and additional training modules. Both certifications aim to validate proficiency in QuickBooks, with the ProAdvisor program further enhancing professional standing through public directory listings and advanced certifications.

QuickBooks Certifications: User vs. ProAdvisor Programs

There are two official QuickBooks certification types available in the United States: the Intuit QuickBooks Certified User (QBCU) and the QuickBooks Certified ProAdvisor program.

Here’s a breakdown of each:

Intuit QuickBooks Certified User (QBCU)

• Purpose and Audience:
• This certification is designed for individuals who want to learn QuickBooks enough to pass an exam and gain a certificate, but do not intend to upkeep the certification annually.
• It’s suitable for those looking to prove their basic QuickBooks knowledge to secure a job in a small business.
• Organizer and Process:
• Organized by Certiport, you can find detailed information, including exam objectives, on their website.
• The exam can be taken online through a virtual proctoring system or at a physical exam location.
• Exam Details:
• The exam covers six basic sections: administering QuickBooks Online, money-in transactions (like invoices), money-out transactions (like expenses and bills), banking, scanning receipts, and reports.
• It’s generally considered fairly easy, consisting of about 50 questions with a one-hour time limit.
• While not a strict requirement, individuals earning this certification are typically expected to have at least 150 hours of instruction or hands-on experience to pass. It is solely an exam, not a course.
• Cost:
• The exam voucher, which includes a retake, costs $130.
• Practice tests and “learning keys” (video courses) are also available for purchase.
• Renewal:
• This certification does not require annual renewal; you take the exam once and receive the certificate.
• Preparation Resource:
• Alicia Catz Pollock’s book, “QuickBooks Online from setup to tax time,” is specifically designed around the certified user curriculum and can serve as a companion for preparation.

QuickBooks Certified ProAdvisor Program

• Purpose and Audience:
• This program is primarily for accounting professionals (those with an accounting degree or working in accounting) who intend to make supporting or working with QuickBooks a career and will renew their certification annually.
• It is specifically designed for individuals who will be serving multiple clients using QuickBooks.
• Cost and Access:
• As of the date of the video, this program is 100% free, with no cost, catch, or credit card required.
• To sign up, you need to create an Intuit account.
• US-Specific Requirement:
• A critical requirement for this program is a US cell phone number for verification via text message or email. Without a US cell phone, you cannot complete the verification process.
• Account Setup:
• You will be asked to provide an “accounting firm name” and zip code. This name is what your clients will see when you invite them to use QuickBooks.
• The QuickBooks Online Accountant (QBOA) account allows you to manage clients. You can choose to pay for your clients’ QuickBooks Online accounts (and bill them) or offer them a direct discount, with the client paying directly.
• Certification Levels:
• QuickBooks Online Certification (Core): This is the initial certification you must achieve.
• Advanced Certification: After obtaining the core certification, you can unlock the advanced certification. This is highly recommended as advanced certified ProAdvisors are listed first in the ProAdvisor directory, helping them gain clients. This level delves into more complex topics like app integrations and challenging accounting situations.
• Payroll Certification: This is another specialized certification available after the core certification.
• QuickBooks Desktop Certified: While the online certification is free, certifying in QuickBooks Desktop requires an additional annual payment, estimated at $800-$1,000, which often includes a software license.
• Renewal:
• This certification must be renewed or recertified every year.
• The annual recertification typically involves taking a two-hour exam, usually before June 30th.
• Exam Details:
• The core QuickBooks Online certification exam consists of five sections, and it can take approximately two and a half hours to complete if you already have QuickBooks knowledge.
• You are given three attempts to pass the exam. If you fail three times, you must wait 60 or 90 days before you can retake it.
• During the exam, you must agree to a code of conduct, ensuring you do not cheat or share content.
• Training and Resources:
• Training Library: The program offers a comprehensive training library with two main learning options:
• Webinars: Eight scheduled sessions, each lasting one to two hours, totaling 14-16 hours of live training.
• On-Demand (Self-Paced): This includes text-based lessons with screenshots, mini-animations, and knowledge checks, estimated to take 16-18 hours to complete.
• No Mandatory Training: You are not required to complete any training or watch webinars if you already possess strong QuickBooks knowledge as an accounting professional.
• Additional Training: Once certified, you gain access to further training on foundational bookkeeping skills, becoming an advisor, tax preparation (e.g., 1040 tax returns), and printable training materials for teaching clients.
• Key Benefits:
• Free QuickBooks Online Account for Your Firm: You receive a complimentary QuickBooks Online account for your own accounting business, allowing you to manage your firm’s books and invoice clients directly within the ProAdvisor portal.
• ProAdvisor Profile: You can create a public profile to showcase your certifications, business information, and receive client reviews.
• Client Acquisition: Your profile is listed in the “Find a QuickBooks ProAdvisor” directory, which is a key resource for individuals seeking QuickBooks experts by zip code. Advanced certified ProAdvisors are prioritized in search results.
• Official Badges and Certificates: Upon certification, you can download a badge and a certificate of completion, which can be used on business cards, websites, email signatures, and LinkedIn profiles.
• Tier-Based Benefits: As you get certified and add clients, you advance in tiers, gaining access to more benefits, including updated training materials provided annually.

QuickBooks Certifications: User vs. ProAdvisor Programs

QuickBooks offers two official certification types in the United States, each providing distinct benefits depending on your career goals and needs: the Intuit QuickBooks Certified User (QBCU) and the QuickBooks Certified ProAdvisor program.

Intuit QuickBooks Certified User (QBCU)

This certification is ideal for individuals who want to demonstrate a foundational understanding of QuickBooks without the need for annual renewal.

• Proof of Basic Knowledge: It allows you to prove that you know enough about QuickBooks to be effective in a small business setting, which can be beneficial when looking for a job.
• One-Time Certification: Once you pass the exam, you receive a certificate, and it does not require annual upkeep or recertification. This makes it suitable for those who just want to gain the certificate and move on.
• Curriculum-Aligned Preparation: Resources like Alicia Catz Pollock’s book, “QuickBooks Online from setup to tax time,” are specifically designed around the certified user curriculum, providing a structured way to prepare for the exam.

QuickBooks Certified ProAdvisor Program

This program is geared towards accounting professionals who intend to make supporting or working with QuickBooks a core part of their career and are committed to annual renewal.

• 100% Free (for Online Certification): As of the video’s date, the QuickBooks Online Certified ProAdvisor program is entirely free, with no cost, catch, or credit card required. (Note: QuickBooks Desktop certification requires an additional annual payment, estimated at $800-$1,000, which includes a software license).
• Career Foundation: It’s designed for accounting professionals who plan to serve multiple clients using QuickBooks and will upkeep their certification annually, making it a foundation for a career in supporting or working with QuickBooks.
• Official ProAdvisor Profile: You can create a public ProAdvisor profile where you can upload your picture, include business information, your website, phone numbers, and showcase your badges. This profile can receive client reviews.
• Client Acquisition:
• Your profile is listed in the “Find a QuickBooks ProAdvisor” directory, a key resource for people searching for QuickBooks experts by zip code.
• Advanced Certified ProAdvisors are listed first in search results, significantly helping them gain clients.
• Official Recognition and Marketing: Upon certification, you receive official badges and a certificate of completion that you can download and use on business cards, websites, email signatures, and LinkedIn profiles. You can also share these directly to LinkedIn.
• Free QuickBooks Online Account for Your Firm: You gain access to a complimentary QuickBooks Online account for your own accounting business, built directly into the ProAdvisor portal. This allows you to manage your firm’s books and invoice clients directly.
• Client Management and Collaboration Tools: The QuickBooks Online Accountant (QBOA) account enables you to manage clients efficiently. You can choose to pay for your clients’ QuickBooks Online accounts (and bill them) or offer them a direct discount where they pay directly.
• Tier-Based Benefits: As you get certified and add clients, you advance in tiers, unlocking more benefits and access to updated training materials provided annually.
• Comprehensive Training Resources:
• Access to a robust training library with options for scheduled webinars (approximately 14-16 hours) and self-paced on-demand courses (estimated 16-18 hours).
• Additional training beyond certification on foundational bookkeeping skills, becoming an effective advisor, and even basic tax preparation (e.g., 1040 tax returns).
• Downloadable, printable training materials (hundreds of pages) that can be used to teach clients how to use and collaborate with QuickBooks.
• Enhanced Expertise: Achieving the Advanced Certification is highly recommended as it delves into more complex topics like app integrations and challenging accounting situations, making you a more knowledgeable consultant.

QuickBooks Certifications: QBCU vs. ProAdvisor Program

Both the Intuit QuickBooks Certified User (QBCU) and the QuickBooks Certified ProAdvisor program offer different avenues for training and study, tailored to their respective certification goals.

Intuit QuickBooks Certified User (QBCU)

The QBCU certification is an exam-based assessment of your QuickBooks knowledge, not a course itself.

• Exam Objectives: Certiport, the organizer, provides exam objectives in a downloadable PDF, which serves as a “cheat sheet” outlining all the topics covered on the exam. These topics include administering QuickBooks Online, money-in and money-out transactions, banking, scanning receipts, and reports.
• Experience Expectation: While not a strict requirement, an individual earning this certification is generally expected to have at least 150 hours of instruction or hands-on experience to pass the exam. This suggests that prior learning or practical use of QuickBooks is beneficial for success.
• Purchasable Resources:Practice tests are available for purchase.
• “Learning keys,” which are video courses, can also be purchased from Certiport. However, the source does not endorse them, having not used them.
• Recommended Book: Alicia Catz Pollock’s book, “QuickBooks Online from setup to tax time,” is specifically designed around the certified user curriculum and can serve as a companion for preparation.

QuickBooks Certified ProAdvisor Program

This program offers comprehensive, often free, training resources designed for accounting professionals, with a focus on annual recertification.

• Training Library: The ProAdvisor portal includes a “Training Library” that offers two primary learning options for the QuickBooks Online certification:
• Webinars: These are scheduled sessions, typically eight sessions in total, each lasting between one to two hours. This can amount to 14 to 16 hours of live webinar training to cover the core certification material.
• On-Demand (Self-Paced Training): This option provides text-based lessons with screenshots, mini-animations, and knowledge checks. It is estimated to take 16 to 18 hours to complete. This format is akin to reading an interactive book off the screen.
• No Mandatory Training: You are not required to complete any training or watch webinars if you already possess strong QuickBooks knowledge, especially if you are an accounting professional. You can go straight to taking the exam.
• Exam Attempts: You have three attempts to pass the certification exam. If you fail three times, you must wait 60 or 90 days before you can retake it, emphasizing the importance of studying beforehand.
• Recertification: An annual recertification exam, typically about two hours long, is required every year, usually before June 30th. This ensures ProAdvisors stay current with QuickBooks updates.
• Additional Training Beyond Certification: Once certified, the program provides access to further valuable training, including:
• Foundational bookkeeping skills and an introduction to bookkeeping.
• Training on how to become an effective advisor and consultant to clients, offering business, accounting, and tax advice.
• Basic tax training, such as how to prepare a 1040 tax return.
• Downloadable, printable training materials (hundreds of pages across five courses) that are specifically designed for accountants to teach their clients how to use QuickBooks and collaborate effectively.
• Other Resources (Not Official Certification Programs): While not official certification programs, various external resources can supplement your learning:
• General QuickBooks books available on platforms like Amazon.
• The speaker’s own video course, designed with “multiple mini lessons in bite-sized pieces” and an accompanying community for questions.
• The speaker’s YouTube channel, which contains “tons of videos mostly about QuickBooks,” including a “QuickBooks Online 2024 tutorial for beginning beginners” playlist with about 10 hours of sequential videos.

QuickBooks ProAdvisor Program: A Comprehensive Guide

The QuickBooks Certified ProAdvisor program is primarily designed for accounting professionals who intend to make supporting or working with QuickBooks a core part of their career and are committed to annual renewal. It is geared towards individuals who will be serving multiple small businesses that use QuickBooks.

Here are the details of the ProAdvisor Program:

Cost and Enrollment

• 100% Free for Online Certification: As of the video’s date, the QuickBooks Online Certified ProAdvisor program is entirely free, requiring no cost, catch, or credit card.
• Desktop Certification Cost: To get certified in QuickBooks Desktop, there is an additional annual payment, estimated at $800-$1,000, which includes a software license.
• US Market Focus: The program is 100% focused on the United States Market. To register, you need a US cell phone number for the verification process. While similar programs exist in Canada, the UK, and Australia, this discussion focuses solely on the US version.
• Sign-Up Process: You create an Intuit account through the ProAdvisor website. You will need to provide an accounting firm name (which can be your own name if you’re a sole practitioner) and zip code.

ProAdvisor Account and Client Management

• QuickBooks Online Accountant (QBOA) Account: Upon signing up, you gain access to a QuickBooks Online Accountant (QBOA) account. This account is specifically for accounting firms and has “accountant” displayed on the top left, with a gray navigation bar.
• Free QuickBooks Online for Your Firm: A significant benefit is access to a complimentary QuickBooks Online account for your own accounting business, built directly into the ProAdvisor portal. You can use this to manage your firm’s books, invoice clients, and handle your own sales.
• Client Management: The QBOA account allows you to manage your clients efficiently through a “client list.” When adding clients, you have two options for QuickBooks Online subscriptions:
• Accountant Pays: You can choose to pay for your clients’ QuickBooks Online accounts, and then bill them for these services.
• Direct Discount: You can offer your clients a direct discount, where they receive an email and pay for QuickBooks Online directly using their own credit card.
• Collaboration: You can collaborate live with your clients by accessing their QuickBooks files directly from your ProAdvisor portal.

Certification and Recertification

• Certification Hub: The “ProAdvisor” section of the portal contains a “Certification Hub” where you can access the exams.
• Levels of Certification:
• QuickBooks Online Certification (Core): This is the initial certification.
• Advanced Certification: Once you achieve the core certification, you can unlock the Advanced Certification. This is highly recommended as it delves into more complex topics like app integrations and challenging accounting situations, making you a more knowledgeable consultant. Advanced Certified ProAdvisors are listed first in the “Find a QuickBooks ProAdvisor” directory, which significantly helps in gaining clients.
• Payroll Certification: You can also get certified in payroll.
• Exam Attempts: You have three attempts to pass the certification exam. If you fail three times, you must wait 60 or 90 days before you can retake it, emphasizing the importance of studying beforehand.
• Annual Recertification: Unlike the QuickBooks Certified User (QBCU), the ProAdvisor certification requires annual renewal or recertification, typically before June 30th. This ensures ProAdvisors stay current with QuickBooks updates. The recertification exam usually takes about two hours.

Training and Study

• Comprehensive Training Library: The ProAdvisor portal offers a “Training Library” with two main options for QuickBooks Online certification:
• Webinars: Scheduled live sessions, typically eight sessions total, each lasting between one to two hours, amounting to 14 to 16 hours of live training.
• On-Demand (Self-Paced Training): Text-based lessons with screenshots, mini-animations, and knowledge checks, estimated to take 16 to 18 hours to complete. This is like reading an interactive book.
• No Mandatory Training: If you already possess strong QuickBooks knowledge, you are not required to complete any training or watch webinars; you can go straight to taking the exam.
• Additional Training Beyond Certification: Once certified, the program provides access to further valuable training, including:
• Foundational bookkeeping skills and an introduction to bookkeeping.
• Guidance on how to become an effective advisor and consultant to clients, offering business, accounting, and tax advice.
• Basic tax training, such as how to prepare a 1040 tax return.
• Downloadable, printable training materials (hundreds of pages across five courses) specifically designed for accountants to teach their clients how to use QuickBooks and collaborate effectively.

Benefits and Marketing

• Official Recognition and Marketing: Upon certification, you receive official badges and a certificate of completion that you can download and use on business cards, websites, email signatures, and LinkedIn profiles. These can also be shared directly to LinkedIn.
• Official ProAdvisor Profile: You can create a public ProAdvisor profile where you can upload your picture, include business information, your website, phone numbers, and showcase your badges. This profile can also receive client reviews.
• Client Acquisition: Your public profile is listed in the “Find a QuickBooks ProAdvisor” directory, which is a key resource for people searching for QuickBooks experts by zip code. As mentioned, Advanced Certified ProAdvisors are listed first in search results, making it easier to gain clients.
• Tier-Based Benefits: As you get certified and add clients, you advance in tiers, unlocking more benefits and access to updated training materials provided annually.

QuickBooks Certification Geographic Limitations

The QuickBooks Certified ProAdvisor program has significant geographic limitations, being primarily focused on a specific market. The QuickBooks Certified User (QBCU) program, while less explicitly detailed regarding geographic limitations, is organized by Certiport, which offers online proctoring or physical exam locations.

Here are the details regarding geographic limitations:

QuickBooks Certified ProAdvisor Program

• United States Market Focus: The program is 100% focused on the United States Market. The speaker explicitly states that they do not have information on what the program looks like outside the US.
• US Cell Phone Requirement: To register for the ProAdvisor program, you must have a US cell phone number to go through the required verification process. Without a US cell phone, you cannot complete the sign-up.
• Similar Programs in Other Countries: While the provided information focuses solely on the US version, it is noted that similar, often very similar, ProAdvisor programs exist in Canada, the UK, and Australia. However, details for these specific international programs are not provided.
• Limited Access Outside Specific Countries: If you do not have a US cell phone or do not live in the US, Canada, the UK, or Australia, it is suggested that you likely cannot become a QuickBooks ProAdvisor. The program is explicitly “based and focused on a particular Market”.
• Localized Client Acquisition: The “Find a QuickBooks ProAdvisor” directory, a key benefit for certified ProAdvisors, allows people to search for QuickBooks experts by zip code, implying a localized service for client acquisition within the US market.

Intuit QuickBooks Certified User (QBCU)

• Less Explicit Geographic Restriction: The sources do not detail specific geographic limitations for the QBCU program regarding registration or market focus.
• Exam Delivery: The QBCU exam can be taken either online through a virtual proctoring system or at a physical exam location. The availability of these physical locations or online proctoring services across different countries is not specified, but the primary discussion revolves around the US context.

By Amjad Izhar
Contact: amjad.izhar@gmail.com
https://amjadizhar.blog

Affiliate Disclosure: This blog may contain affiliate links, which means I may earn a small commission if you click on the link and make a purchase. This comes at no additional cost to you. I only recommend products or services that I believe will add value to my readers. Your support helps keep this blog running and allows me to continue providing you with quality content. Thank you for your support!

This text describes four different methods for importing customer invoices into QuickBooks Online. The methods range from a simple import of customer opening balances as lump sums to a more detailed CSV file import that includes individual line items. A third method, available only in QuickBooks Online Advanced, allows for batch entry with copy/paste functionality. Finally, the text discusses using a third-party app like Transaction Pro Importer, highlighting its potential for handling higher volume and offering more precise error reporting compared to the built-in options.

QuickBooks Online Invoice Import Methods

Based on the source provided, there are four ways to import customer invoices into QuickBooks Online. It’s important to note that the source focuses specifically on importing invoices you issue to your customers, not the bills you receive from vendors or suppliers, which are referred to as “bills” in QuickBooks and are part of the accounts payable workflow. Importing vendor bills is discussed in a different video not covered in this source.

Here are the four methods for importing customer invoices:

1. Import a simple list of brand new customers with lump-sum amounts of opening balances.

• This method is used when you’re coming from another accounting system or starting from scratch and want to bring in customer names and the total dollar amount each customer owes you.
• The required fields for this import are customer name, amount, and “as of date” (the date for the lump-sum balance). More fields are available to map if needed.
• The process involves clicking the gear menu, selecting “import data,” then clicking on “customers” (not invoices for this method). You then browse for your spreadsheet file, map your spreadsheet columns to the QuickBooks fields (Customer Name, Amount maps to Opening Balance, As of date maps to Opening Balance Date), preview the data, and import.
• Formatting for the “as of date” is specific and needs to be correct. The source noted that negative amounts were successfully imported and appeared as credit memos.
• When imported this way, the transactions appear as invoices, with negatives imported as credit memos. Everything is typically put into a generic item called “sales” with a description like “opening balance,” without containing detailed line items.
• This method is suitable only if the total amounts represent a single lump sum per customer and not multiple invoice numbers with multiple dates or line item details.

1. CSV import that allows for more detail.

• This is likely the most popular and widely used feature as it allows importing more detailed information.
• It works across all versions of QuickBooks Online.
• You can import individual invoice numbers, separate invoice dates, and detailed line items within each invoice.
• The process involves clicking the gear menu, selecting “import data,” and then clicking on “invoices”. QuickBooks provides a sample file which the source recommends opening to get acquainted with the required spreadsheet format.
• The sample file shows how to structure data for invoices with multiple lines, repeating the invoice number, customer name, and invoice date for subsequent lines of the same invoice.
• Mapping spreadsheet columns to QuickBooks columns is required, with some fields marked as required (like those with an asterisk). You can choose which fields to map.
• Common errors include incorrect date formatting, customers not existing in QuickBooks, and items not existing in QuickBooks.
• To address errors:
• Date formatting needs to match the required format (e.g., month date year) and may require cleaning the data in your spreadsheet using Excel formatting tools.
• Non-existent customers or items must be created in QuickBooks before importing invoices that use them. The source demonstrates importing items separately using the “Products and Services” import feature. Importing a detailed customer list first is also normal practice. Alternatively, for customers, you can use a checkbox during the invoice import process to automatically add new customers on the fly, though this creates them without details like addresses.
• If an invoice number in your spreadsheet already exists in QuickBooks, it will cause an error. You can fix the invoice numbers in your spreadsheet or turn off “Custom transaction numbers” in QuickBooks settings (under Sales) to have QuickBooks assign new invoice numbers automatically. If you want to respect the original invoice numbers from your spreadsheet, you must ensure they don’t conflict with existing numbers in QuickBooks.
• After resolving errors and completing the import, you can verify the imported invoices under Sales > Invoices or by viewing the customer’s details.

1. Batch enter feature in QuickBooks Online Advanced.

• This method is only available in QuickBooks Online Advanced, the highest subscription version.
• It is accessed via the “New” button and selecting “Batch transactions”.
• It allows for a combination of importing from a CSV file and copying/pasting data directly from spreadsheet software like Excel or Google Sheets.
• You can edit the data on the fly prior to importing.
• You can select which fields you want to see and potentially import.
• The source encountered difficulties with this method, noting it was a “new company file” requiring customers and items to be set up first, similar to method 2.
• A significant quirk discovered was that when using the copy/paste feature, each row is initially treated as a separate transaction unless you manually click to mark subsequent rows as “new line item” within the batch entry screen. This differentiates it significantly from the standard CSV import format where repeating the invoice number bunches lines together.
• The source found this method to be “not my favorite,” describing it as “strange,” “not very intuitive,” and “more time consuming to learn the quirks” compared to a third-party app. The source doesn’t believe upgrading to QuickBooks Online Advanced is worth it solely for this feature.

1. Using a third-party app.

• This method is recommended when the built-in methods don’t work, or you have a high volume of transactions and want a more automated approach.
• It requires paying a separate subscription for the app.
• The source uses Transaction Pro Importer by WR Works as an example.
• Third-party apps can be accessed by signing in with your Intuit account and connecting to your QuickBooks Online file.
• Transaction Pro allows importing various data types, including invoices. You select the transaction type (Invoices), drag and drop your file, and map your spreadsheet columns to the app’s importable fields.
• Third-party apps like Transaction Pro often allow you to import a lot more fields than the built-in QuickBooks system.
• You can preview the data before importing. Transaction Pro has options to automatically create customers or items if they don’t exist.
• Transaction Pro provides more precise errors than the built-in methods. Errors, such as duplicate invoice numbers, can often be fixed directly within the app’s preview screen or by adjusting the spreadsheet.
• The source found this method to be very effective, particularly for larger volumes and when using pre-formatted spreadsheets. They state that third-party apps have historically been the primary way to import data and likely remain superior until QuickBooks’ built-in methods are more user-friendly and comprehensive.

The source recommends trying the built-in methods (Methods 1 and 2) first. However, if those don’t meet your needs or are too difficult to use (as the source found with Method 3), resorting to a third-party app (Method 4) is likely the “most foolproof way” to import data, despite the additional cost.

QuickBooks Online Invoice Import Methods

Based on the source provided, importing customer invoices into QuickBooks Online can be done using four distinct methods. It’s important to note that these methods specifically apply to invoices you issue to your customers, which are part of the accounts receivable process, and not the bills you receive from vendors or suppliers (QuickBooks calls these “bills” and they are part of accounts payable).

Here are the four methods discussed:

1. Import a Simple List of Brand New Customers with Lump-Sum Opening Balances:

• This method is used when you are transitioning from another accounting system or starting fresh and wish to bring in customer names along with the total dollar amount each customer owes you as a single lump sum.
• You access this method by clicking the gear menu, selecting “Import Data,” and then clicking on “Customers” (not “Invoices”).
• The required fields for this type of import are customer name, amount, and an “as of date” for the lump-sum balance. Additional fields can be mapped if needed.
• The amount column from your spreadsheet maps to “Opening Balance” in QuickBooks, and the “as of date” maps to “Opening Balance Date”.
• Date formatting for the “as of date” is described as “very picky” and needs to follow a specific format (e.g., month date year).
• During the preview phase, the source initially thought negative amounts might cause errors, but found that negatives successfully imported.
• When imported using this customer method, the transactions appear in QuickBooks as invoices, with negative amounts appearing as credit memos.
• All imported amounts are typically assigned to a generic item called “sales” with a description like “opening balance,” and do not contain detailed line items.
• This method is only suitable if the amounts represent a single lump sum per customer and not multiple invoice numbers with different dates or line item details.

1. CSV Import for More Detail:

• This is likely the “most popular the most used feature” as it allows for importing more detailed information.
• It is available across all versions of QuickBooks Online.
• This method allows you to import individual invoice numbers, separate invoice dates, and detailed line items for each invoice.
• You access this by clicking the gear menu, selecting “Import Data,” and then clicking on “Invoices”.
• QuickBooks provides a sample file which is recommended to open to understand the required spreadsheet format. The sample file shows how to structure data for invoices with multiple lines by repeating the invoice number, customer name, and invoice date for subsequent lines belonging to the same invoice. For lines after the first for the same invoice number, you can skip repeating customer name and invoice date as QuickBooks assumes they belong to the same group.
• You must map columns from your spreadsheet to QuickBooks columns. Fields marked with an asterisk are required.
• Common errors encountered during the import process include incorrect date formatting, customers that do not already exist in QuickBooks, and items that do not already exist in QuickBooks.
• To fix errors:
• Date formatting must match the required format (e.g., month date year) and might need to be cleaned or reformatted in the spreadsheet.
• Non-existent customers or items need to be created in QuickBooks before the invoice import. The source demonstrated importing items separately using the “Products and Services” import feature. Importing a detailed customer list first is also a standard practice. Alternatively, for customers, you can use a checkbox during the invoice import to automatically add new customers on the fly, though these customers will lack details like addresses.
• If an invoice number already exists in QuickBooks, it will cause an error. You can fix the duplicate invoice numbers in your spreadsheet or turn off “Custom transaction numbers” in QuickBooks settings (under Sales) to have QuickBooks assign new, non-conflicting invoice numbers automatically. If you want to keep the original invoice numbers from your spreadsheet, you must ensure they are unique in QuickBooks before importing.
• After a successful import, you can view the imported invoices under Sales > Invoices or by accessing the customer’s profile.

1. Batch Enter Feature in QuickBooks Online Advanced:

• This method is only available in QuickBooks Online Advanced, QuickBooks Online’s highest subscription level. You will not see this feature if you are not on this plan.
• It is accessed via the “New” button and selecting “Batch transactions”.
• This feature allows for a combination of importing from a CSV file and directly copying and pasting data from spreadsheet software like Excel or Google Sheets.
• You can edit the data directly on the screen before saving or importing.
• You can select which fields you want to display and potentially import using an options gear.
• Similar to the CSV import method, customers and items must exist in QuickBooks Online Advanced before they can be used in batch entry transactions. The source discovered this when working with a new company file.
• A significant quirk noted is that when using the copy/paste function, QuickBooks Online Advanced initially treats each row as a separate transaction unless you manually click a “new line item” option for subsequent lines that belong to the same invoice within the batch entry screen. This is different from the CSV import format where repeating the invoice number automatically groups lines.
• The source found this method to be “not my favorite,” describing it as “strange,” “not very intuitive,” and “more time consuming to learn the quirks of it”. The source does not believe upgrading to QuickBooks Online Advanced is worthwhile solely for this batch entry feature.

1. Using a Third-Party App:

• This method is recommended when the built-in options (Methods 1, 2, and 3) are insufficient, or you need a more automated approach for a high volume of transactions.
• This method requires paying a separate subscription fee for the chosen app.
• The source uses Transaction Pro Importer by WR Works as an example.
• Third-party apps typically connect to your QuickBooks Online file by signing in with your Intuit account.
• Apps like Transaction Pro allow importing various types of data, including invoices. You select the transaction type (Invoices), upload your file, and map your spreadsheet columns to the app’s available import fields.
• Third-party apps often allow you to import a much larger number of fields compared to the built-in QuickBooks import features.
• You can preview the data before completing the import. Many apps, including Transaction Pro, offer options to automatically create customers or items if they don’t already exist in QuickBooks.
• Third-party apps tend to provide “a lot more precise” errors than the built-in methods. Errors, such as duplicate invoice numbers, can often be addressed directly within the app’s preview screen or by modifying the source spreadsheet.
• The source found this method to be very effective, particularly for larger volumes and when working with pre-formatted spreadsheets. They suggest that third-party apps have historically been, and likely continue to be, the superior method until QuickBooks’ built-in tools become more user-friendly and comprehensive. It is considered the “most foolproof way” to import data, despite the additional cost.

In summary, the source recommends starting by trying the built-in methods (Methods 1 and 2) first. However, if these methods don’t meet your needs or are difficult to use (as the source found with Method 3, the batch entry feature), using a third-party app (Method 4) is likely the most reliable approach, particularly for complex or high-volume imports, despite the additional cost.

QuickBooks Online Import Data Formatting Tips

Based on the source provided, data formatting is a crucial element when importing customer invoices into QuickBooks Online, and the system can be quite particular about it. Getting the formatting right in your spreadsheet is often the first step in ensuring a successful import across the different methods discussed.

Here are some key points about data formatting and related data preparation from the source:

• Date Formatting is “Very Picky”: The source emphasizes that QuickBooks Online is “very picky” about the exact format required for dates. For the first import method (Customer Import with opening balances), the “as of date” needs to follow a specific format like month date year. Similarly, during the second method (CSV Invoice Import), the incorrect date formatting is a common error, and the required format is also shown as month date year. The source demonstrates cleaning up dates in the sample spreadsheet using spreadsheet software features to match this required format. When using the Batch Entry feature in QuickBooks Online Advanced (method three), the copy/paste function also requires specific date formatting, such as including the four-digit year.
• Negative Amounts: While the source initially thought negative amounts might cause errors during the first import method (Customer Import with opening balances), they found that negatives successfully imported and appeared in QuickBooks as credit memos, whereas positive amounts imported as invoices.
• Prerequisite Data (Customers and Items): A significant aspect of preparing data for import, especially for the more detailed methods (CSV Invoice Import and Batch Entry), is ensuring that customers and items (products/services) referenced in your spreadsheet already exist in your QuickBooks Online file. If they don’t, the import will fail and generate errors. The source demonstrates how to import items separately using the Products and Services import feature as a necessary step before importing invoices that use those items. Although not explicitly shown as a formatting step, ensuring this prerequisite data exists is vital for the structure and integrity of the imported transactions.
• Required Fields: While not strictly formatting, the source highlights that certain fields are required for successful import, marked with an asterisk during the mapping process. For example, when importing items (a prerequisite for invoice import), fields like item name, type, and income account are required.
• Duplicate Transaction Numbers: If you are importing data that includes transaction numbers (like invoice numbers) and an invoice number in your spreadsheet already exists in QuickBooks Online, it will cause an error. The source shows two ways to handle this: either manually fix the duplicate invoice numbers in your spreadsheet before importing, or turn off “Custom transaction numbers” in QuickBooks settings so that QuickBooks assigns unique numbers automatically during the import.
• Inventory Item Quirks: When importing invoices that include inventory items, the source encountered errors related to the starting date of those inventory items. This implies a specific requirement or date constraint for when inventory items become available for use in transactions.
• Third-Party Apps and Error Reporting: When using third-party apps for importing (method four), such as Transaction Pro, the source notes that these apps often provide “a lot more precise” errors compared to the built-in methods. This precision can make it easier to identify and fix data formatting issues or other data-related problems.

In essence, successful data import into QuickBooks Online heavily relies on cleaning and formatting your source data in spreadsheet software before attempting the import. This includes ensuring dates are in the correct format, required prerequisite data (customers, items) exists in QuickBooks, and addressing potential conflicts like duplicate transaction numbers. The troubleshooting experienced by the source across multiple methods underscores the importance of meticulous data preparation.

QuickBooks Online Third-Party Data Import Options

Based on the sources provided, third-party apps represent the fourth method for importing data into QuickBooks Online. They are presented as a powerful alternative, particularly when the built-in import methods prove insufficient.

Here’s what the sources say about using third-party apps for importing data:

• Purpose and Use Case: You might resort to using a third-party app when other methods (Customer Import, CSV Invoice Import, Batch Entry in QBO Advanced) don’t work, if there are limitations with the built-in features, or if you need to import a high volume of transactions in a more automated fashion.
• Example App: The source specifically uses Transaction Pro Importer by WR Works as an example. Accessing a 7-day trial is mentioned as a way to try it out.
• Cost: Unlike the first two built-in methods which are available in all QBO versions, and the third method which requires QBO Advanced, third-party apps typically require a separate subscription fee. Pricing can depend on factors like the number of company files and the volume of data rows you need to import.
• Functionality: Third-party apps allow you to import a wide variety of transaction types, not just invoices. The example app shows options for importing chart of accounts, bank statements, journal entries, sales receipts, bills, expenses, checks, and more, in addition to invoices.
• Enhanced Mapping: When using a third-party app like Transaction Pro, there are “a lot more Fields you can import” compared to the built-in import system. This allows for bringing in more detailed information.
• Improved Error Reporting: A significant advantage highlighted is that the errors you get in a third-party app are “a lot more precise” compared to those from the built-in methods. This precision can make it easier to identify and fix data issues.
• Historical Context: The source notes that for a very long time, before the built-in methods existed or were as developed, a third-party app was the only way to import data into QuickBooks Online.
• Comparison to Batch Entry: The source suggests that it might not be worth upgrading to QuickBooks Online Advanced just to get the Batch Entry feature, as it can be quirky and time-consuming to learn, whereas a third-party app can potentially save you more time. The third-party app method is suggested as likely the most “foolproof way” if the standard built-in methods don’t work.

In summary, while involving an extra cost, third-party apps offer greater flexibility, handle higher volumes, provide more detailed field mapping, and offer superior error reporting compared to QuickBooks Online’s native import tools, making them a valuable option, especially for complex or large-scale data imports. However, you still need to map fields and ideally clean up your spreadsheet data beforehand.

QuickBooks Online Data Import Error Handling

Based on the sources and our conversation history, error handling is a significant part of the data import process into QuickBooks Online, and the methods for dealing with errors vary depending on the import tool used.

Here’s a discussion of error handling:

• Errors are Expected: The process of importing invoices into QuickBooks Online, particularly using the built-in methods, is shown to be prone to errors. The source explicitly demonstrates encountering multiple errors while trying to import data.
• Common Causes of Errors:Date Formatting: QuickBooks Online is described as “very picky” about date formats. Incorrect date formatting is highlighted as a common error when using the CSV Invoice Import method, and the Batch Entry feature also requires specific date formatting, including the four-digit year.
• Missing Prerequisite Data: A frequent cause of import errors is when the customers and items (products/services) referenced in your spreadsheet do not already exist in your QuickBooks Online file. The system will report that these cannot be matched. This requires creating them in QuickBooks before the invoice import can succeed.
• Duplicate Transaction Numbers: If you include invoice numbers in your import file and any of those numbers already exist in QuickBooks Online, it will cause an error.
• Inventory Item Constraints: Importing invoices with inventory items can lead to errors if the inventory item was not created in QuickBooks Online with a starting date prior to the transaction date of the invoice being imported.
• Intricacies of Batch Entry: The copy/paste method within the Batch Entry feature has specific quirks, such as assuming each row is a separate transaction unless manually indicated as a new line item for the same transaction, which can lead to unexpected errors.
• Identifying Errors: QuickBooks Online’s built-in import screens display error messages when the import fails.
• Precision of Error Reporting: A key distinction highlighted is that errors received when using a third-party app, such as Transaction Pro, are “a lot more precise” compared to those from the built-in methods. This precision makes it easier to identify and resolve the underlying data issues.
• Fixing Errors:Correcting the Source Data: Many errors require returning to your spreadsheet software (like Excel) to clean up and reformat the data. This involves ensuring dates are in the correct format, adding necessary information, or correcting duplicate invoice numbers.
• Creating Missing Data in QuickBooks: Errors caused by non-existent customers or items are resolved by creating these entries in your QuickBooks file. This can be done manually or by using QuickBooks’ separate import features for customers or products and services before attempting the invoice import again.
• Allowing QuickBooks to Create Data: For missing customers, the second built-in import method offers a checkbox to “add new customers into QuickBooks” on the fly, which bypasses the error but creates the customer without detailed information.
• Adjusting QuickBooks Settings: To handle duplicate invoice numbers, you can turn off the “Custom transaction numbers” setting in QuickBooks Online, which will cause QuickBooks to assign new unique numbers during the import, avoiding the conflict.
• On-the-Fly Adjustments: The Batch Entry feature allows for some changes directly on the preview screen before saving, but this should be done cautiously as it might not reflect your original spreadsheet accurately. Third-party apps like Transaction Pro also offer some ability to fix data on the import preview screen.
• Persistence: The source notes that dealing with the Batch Entry feature can involve reading the errors and “keep trying over and over” to understand its quirks and make the import work.
• Comparison of Error Handling: The built-in Batch Entry feature is described as “quirky” and “not very intuitive,” making error handling challenging despite the ability to edit on the fly. The source recommends trying the built-in methods first but suggests that a third-party app is likely the most “foolproof way” if the standard methods fail. This is largely due to the third-party apps’ more precise error reporting.

QuickBooks Online: Importing Invoices Study Guide

Quiz

1. What are the four methods discussed for importing customer invoices into QuickBooks Online?
2. When using Method 1 (importing a simple list of brand new customers), what three fields are required?
3. How are negative amounts handled when importing customer opening balances using Method 1?
4. In Method 2 (CSV import for all versions), how does QuickBooks Online handle multiple line items for a single invoice number in the spreadsheet?
5. What are some common errors you might encounter when using Method 2 to import invoices?
6. Which version of QuickBooks Online is required to use Method 3 (Batch Enter)?
7. In Method 3, what is one major difference between the CSV import and the copy/paste functionality regarding how the system recognizes multiple lines for a single transaction?
8. Why might a user choose to use a third-party app (Method 4) for importing invoices instead of the built-in methods?
9. When using a third-party app like Transaction Pro Importer, how might the error messages differ from those in the built-in QuickBooks Online import features?
10. What setting in QuickBooks Online can be adjusted to allow QuickBooks to assign new invoice numbers during an import, rather than using the numbers from your spreadsheet?

Quiz Answer Key

1. The four methods are: importing a simple list of brand new customers with opening balances (Method 1), CSV import for all versions (Method 2), Batch Enter in QuickBooks Online Advanced (Method 3), and using a third-party app (Method 4).
2. When using Method 1, the three required fields are customer name, amount (referred to as opening balance in QuickBooks), and as of date (referred to as opening balance date).
3. Negative amounts are handled as credit memos when importing customer opening balances using Method 1.
4. When using Method 2, QuickBooks Online assumes that if an invoice number is repeated on multiple rows in the spreadsheet, those rows represent individual line items for that single invoice.
5. Common errors in Method 2 include incorrect date formatting, customers or items not existing in the QuickBooks Online database, and duplicate invoice numbers.
6. QuickBooks Online Advanced is required to use Method 3 (Batch Enter).
7. In Method 3, using copy/paste might initially assume each row is a separate transaction unless you manually indicate new line items, whereas the CSV import functionality might handle this differently.
8. Users might choose a third-party app for higher transaction volumes, more automation, more precise error messages, and greater flexibility in mapping fields compared to the built-in methods.
9. The error messages in a third-party app like Transaction Pro Importer are often described as more precise than those provided by the built-in QuickBooks Online import features.
10. The setting that can be adjusted is “Custom transaction numbers” under Sales in the Accountant Settings. Turning this off allows QuickBooks to assign new invoice numbers.

Essay Questions

1. Compare and contrast Method 1 (Simple Customer List Import) and Method 2 (CSV Invoice Import), discussing the types of data they are best suited for importing, their required fields, and potential limitations of each method.
2. Analyze the challenges and potential benefits of using Method 3 (Batch Enter in QuickBooks Online Advanced) for importing invoices, as described in the source material. Consider the user experience and when this method might be most or least effective.
3. Evaluate the role of third-party applications in the QuickBooks Online ecosystem for data import, specifically focusing on their advantages over built-in methods for complex or high-volume import scenarios based on the provided text.
4. Discuss the importance of data preparation (cleaning and formatting spreadsheets) for successful invoice imports into QuickBooks Online, illustrating with examples of specific data issues mentioned in the source material and how they were resolved.
5. Describe the potential implications of importing invoices with or without specified invoice numbers from the spreadsheet, explaining how QuickBooks Online handles each scenario and the setting that influences this behavior.

Glossary of Key Terms

• Invoice: A document issued by a seller to a buyer, requesting payment for goods or services that have been supplied. In QuickBooks Online, this refers to sales invoices issued to customers.
• Bill: In QuickBooks Online, this refers to the invoices received from vendors or suppliers, representing expenses or accounts payable.
• CSV (Comma Separated Values): A simple file format used to store tabular data, often used for importing and exporting data between different applications, including spreadsheets and accounting software.
• Lump Sum Amount: A single total amount for a customer’s opening balance, not broken down into individual invoice details.
• Opening Balances: The beginning balances for accounts in an accounting system, often imported when setting up a new company file or transitioning from another system.
• Accounts Receivable (AR): Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.
• Credit Memo: A document used to reduce the amount a customer owes, often issued for returns, allowances, or corrections. It is the opposite of an invoice.
• Generic Income Account: A default or broad category in the chart of accounts used to record income when specific item details are not provided or mapped during an import.
• Line Items: Individual entries on an invoice that detail the specific products, services, quantities, rates, and amounts that make up the total invoice amount.
• Mapping: The process of matching the columns in your spreadsheet or external data file to the corresponding fields in QuickBooks Online during the import process.
• Required Fields: Specific fields in QuickBooks Online that must have corresponding data mapped from your import file for the transaction or record to be successfully created.
• Terms: The payment conditions agreed upon for an invoice, such as Net 30 (payment due within 30 days of the invoice date).
• Products and Services: The items that a company sells or provides to its customers, which are set up in QuickBooks Online to track sales and inventory.
• Item Import Feature: A specific function within QuickBooks Online that allows users to import their list of products and services from an external file.
• Customer List: A database within QuickBooks Online containing information about a company’s customers, including names, addresses, and contact details.
• Custom Transaction Numbers: A setting in QuickBooks Online that allows users to either manually enter invoice numbers or have QuickBooks automatically assign sequential numbers.
• Batch Enter (QuickBooks Online Advanced): A feature in the highest version of QuickBooks Online that allows for the creation, modification, or deletion of multiple transactions simultaneously, often through copying and pasting from a spreadsheet or importing a CSV file.
• Third-Party App: Software applications developed by companies other than Intuit (the maker of QuickBooks) that can integrate with QuickBooks Online to provide additional functionality, such as more advanced data import capabilities.
• Transaction Pro Importer: A specific third-party app mentioned in the source material as an example of a tool for importing various types of transactions into QuickBooks Online.

Briefing Document: Importing Invoices into QuickBooks Online

This briefing document summarizes the key methods and considerations for importing customer invoices into QuickBooks Online, based on the provided source. The document outlines four distinct approaches, highlighting their advantages, limitations, and practical steps.

Overall Theme: The source provides a comprehensive guide to importing customer invoices into QuickBooks Online, ranging from simple opening balance imports to detailed line-item imports and utilizing third-party applications. It emphasizes the challenges and specific requirements of each method within the QuickBooks Online environment.

Most Important Ideas/Facts:

• Four Methods for Importing Invoices: The source clearly defines and demonstrates four separate methods for importing invoices:

1. Importing a simple list of new customers with lump-sum opening balances.
2. CSV import with detailed line items (works across all QuickBooks Online versions).
3. Batch enter feature (exclusive to QuickBooks Online Advanced).
4. Using a third-party app (recommended for complex or high-volume imports).

• Distinction between Customer Invoices and Vendor Bills: The briefing clarifies that this guide focuses on customer invoices (Accounts Receivable) and not vendor bills (Accounts Payable), which have a different import process.
• Data Formatting and Mapping are Crucial: Regardless of the method, correct data formatting (especially dates and amounts) and accurate field mapping between the spreadsheet and QuickBooks Online are essential to avoid errors.
• Pre-existing Data Requirements: Importing invoices, especially with detailed line items, often requires customers and items/products to already exist in QuickBooks Online. The source demonstrates how to address this by either pre-importing customers and items or allowing QuickBooks to create them on the fly (though this may result in less detailed records).
• Error Handling is Common: The video consistently highlights encountering and resolving errors during the import process, emphasizing that it’s rarely a perfectly smooth operation. Common errors include incorrect date formats, non-existent customers or items, and duplicate invoice numbers.
• QuickBooks Online Advanced Batch Enter Limitations: While available in the highest subscription tier, the source expresses a lack of enthusiasm for the batch enter feature, citing its lack of intuitiveness and the potential for unexpected behavior during copy-pasting.
• Third-Party Apps for Robust Importing: The source strongly recommends using a third-party app like Transaction Pro Importer for high-volume or complex import needs, highlighting its greater precision in error reporting and broader range of importable fields compared to the built-in methods.
• Impact of Custom Transaction Numbers Setting: The setting for “Custom transaction numbers” in QuickBooks Online affects how imported invoices are numbered. Turning it off allows QuickBooks to assign new numbers, which can be useful for importing new data but may not be suitable for preserving historical invoice numbers.

Key Quotes:

• “in this video I’m going to show you four ways to import invoices customer invoices into QuickBooks online now I’m talking about the invoices you issue to your customers and not the bills you get from your vendors or suppliers which are also called invoices but in QuickBooks it’s actually called the bill”
• “This is probably going to be the most popular the most used feature.” (Referring to the CSV import method).
• “This one actually only works in QuickBooks Online Advance… most people don’t have QuickBooks Online advance so they might have to resort to Method one or two.”
• “The last method the fourth method is when everything else I explained doesn’t work… then you want to bring a third party app”
• “this is kind of the the challenging part is that you kind of have to play with Excel and get a very specific uh format a change here”
• “these customers don’t exist already in QuickBook so I won’t know how to import them and these items might also not exist”
• “this is a common thing that you’re going to be dealing with when you import uh invoices you might need to import your cust customer list first… and then you want to import a detail item list this is normal”
• “I actually don’t love that third method it’s not my favorite one as you can tell I even struggled during the import and it really is because it’s just designed in a very strange way not very intuitive”
• “I don’t think that it’s worth upgrading to QuickBook sell in advance to get that batch interface feature because it’s really just it’s more time consuming to learn the quirks of it versus using a third party app which is going to save you so much time”
• “for larger volume and when you already have sort of pre-formatted spreadsheet that you kind of know how it’s going to be imported this is always going to be better”
• “The errors that you get in the third party app are a lot more precise”
• “my recommendation is always try the built-in methods and if that doesn’t work go for the the third party app CU that’s going to be probably the most foolproof way”

Summary of Each Method:

• Method 1: Simple Opening Balance Import (via Customer Import):
• Imports customer names and a single lump-sum opening balance per customer.
• Useful for migrating from another system or bringing in initial A/R balances.
• Data needs to be in a spreadsheet with at least customer name, amount (mapped to opening balance), and as of date.
• Imported as generic invoices with “opening balance” in the description.
• Can handle negative amounts (imported as credit memos).
• Requires navigating to “Import Data” then “Customers.”
• Limited detail per invoice.
• Method 2: CSV Import with Detailed Line Items (via Invoice Import):
• Imports individual invoices with specific numbers, dates, terms, and detailed line items (items, descriptions, quantities, rates).
• Likely the most popular and widely used method.
• Requires a CSV file formatted according to QuickBooks’ sample file structure.
• Crucial for bringing in historical transactional data with full detail.
• Requires customers and items to exist in QuickBooks (though QuickBooks can create new customers on the fly, without full details).
• Error-prone if data is not formatted correctly or pre-existing data is missing.
• The “Custom transaction numbers” setting can be adjusted to avoid duplicate invoice number errors.
• Requires navigating to “Import Data” then “Invoices.”
• Method 3: Batch Enter (QuickBooks Online Advanced Only):
• Allows for a combination of CSV import and copy-pasting data directly into a QuickBooks interface.
• Provides an on-the-fly editing capability before importing.
• Limited to QuickBooks Online Advanced subscription.
• Described as “not very intuitive” and prone to unexpected behavior (e.g., treating each row as a separate transaction during copy-paste if not explicitly marked as a new line item).
• Requires pre-existing customers and items.
• Accessed via the “New” button and “Batch transactions.”
• Method 4: Third-Party App (e.g., Transaction Pro Importer):
• Recommended for high volume, complex data, or when built-in methods fail.
• Requires a separate subscription to the third-party service.
• Offers a more robust and flexible import process with more detailed error reporting.
• Can import a wider range of fields compared to built-in methods.
• Generally considered more foolproof and time-saving for significant import tasks, despite being a separate cost.
• Accessed by connecting the third-party app to the QuickBooks Online account.

In conclusion, importing invoices into QuickBooks Online offers multiple avenues, each with its own strengths and weaknesses. While the built-in methods can work for simpler or less frequent imports, complex or high-volume scenarios are often best handled by a dedicated third-party application to ensure accuracy and efficiency. Users should be prepared to troubleshoot formatting and data consistency issues regardless of the chosen method.

What are the four main methods for importing invoices into QuickBooks Online?

• There are four primary methods discussed for importing customer invoices into QuickBooks Online. The first method involves importing a simple list of new customers with lump sum opening balances as single invoices. The second method utilizes a CSV import file to bring in more detailed information, including individual invoice numbers, dates, and line items. The third method, exclusive to QuickBooks Online Advanced, is a batch enter feature allowing for CSV import, copy-pasting from spreadsheets, and on-the-fly editing before importing. The fourth method involves using a third-party app, such as Transaction Pro Importer, which is often recommended for high volume transactions or when the built-in methods face limitations.

How does the first import method (simple list with opening balances) work, and what are its limitations?

• The first method allows you to import a basic list of customer names, a total amount owed (opening balance), and an “as of” date. You navigate to the “Import Data” section via the gear menu and select “Customers” instead of “Invoices.” You then browse and upload your spreadsheet (CSV format is common), map the required fields (customer name, amount/opening balance, and as of date), and proceed with the import. QuickBooks Online imports these as individual invoices, with negative amounts often appearing as credit memos. The main limitation is that this method only brings in lump sum amounts and does not support detailed line items or multiple invoices per customer. It’s primarily for establishing opening balances for new customers.

What are the key features and potential challenges of the second import method (CSV import for detailed invoices)?

• The second method, which works across all versions of QuickBooks Online, uses a CSV file to import detailed invoices. This method allows you to include invoice numbers, dates, due dates, terms, specific items (products and services), descriptions, quantities, rates, and amounts for each line item. QuickBooks Online provides a sample CSV file to help you understand the required format. Challenges with this method often include ensuring that customers, items, and terms already exist in your QuickBooks Online database, or being prepared to create them on the fly during the import process. Date formatting in the spreadsheet can also be a common source of errors, requiring precise formatting to match QuickBooks’ requirements. If invoice numbers in your spreadsheet already exist in QuickBooks, you may receive errors unless you disable custom transaction numbers in your settings.

How does the batch enter feature in QuickBooks Online Advanced differ from the other import methods?

• The batch enter feature, available only in QuickBooks Online Advanced, is accessed via the “New” button and “Batch Transactions.” It offers more flexibility than the other built-in methods by allowing users to both import from a CSV file and copy-paste data directly from spreadsheet software like Excel or Google Sheets. A significant advantage is the ability to edit data on the fly within the preview screen before finalizing the import. However, it can be less intuitive to use than the other methods, particularly with understanding how to handle multiple line items for a single invoice when copying and pasting, which requires explicitly designating new line items within the interface. It also still requires customers and items to exist in QuickBooks or be created during the process.

What kind of data preparation is typically required before importing invoices using the built-in QuickBooks Online methods?

• Significant data preparation in the source spreadsheet is often necessary for successful imports. This includes ensuring accurate date formatting (usually month/day/year), correctly formatting numerical values (especially for amounts and quantities), and verifying that customer names, item names (products and services), and terms used in the spreadsheet match or can be added to your QuickBooks Online database. For detailed invoice imports, ensuring that multiple line items belonging to the same invoice are grouped together in the spreadsheet, often indicated by a repeated invoice number, is crucial.

Why might a user encounter errors when using the built-in import methods, and how can these errors be addressed?

• Errors during built-in invoice imports can arise from various issues. Common problems include incorrect date formatting, non-existent customers or items in the QuickBooks database, or duplicate invoice numbers if custom transaction numbers are enabled. To address these, you may need to clean and reformat data in your spreadsheet, import customer and item lists separately before importing invoices, or disable custom transaction numbers in QuickBooks settings to allow the system to assign new invoice numbers. The error messages often provide clues about the specific issue, guiding you on what needs to be adjusted in your spreadsheet or QuickBooks settings.

When is using a third-party app like Transaction Pro Importer recommended for importing invoices into QuickBooks Online?

• Using a third-party app is often recommended when the built-in methods prove insufficient or too cumbersome. This is particularly true for importing a high volume of transactions, when complex data mapping or manipulation is required, or when dealing with limitations of the built-in tools (such as specific fields not being importable). Third-party apps typically offer more advanced features, more precise error reporting, and a more streamlined process for handling various data scenarios, although they usually require a separate subscription fee.

What are the potential advantages of using a third-party app for importing compared to the built-in methods?

• Third-party apps often provide a more robust and flexible import experience. They typically offer a wider range of fields that can be imported, more advanced mapping capabilities, and more detailed and user-friendly error reporting that helps troubleshoot issues more effectively. While there may be an initial learning curve, they are generally considered more efficient and reliable for complex or high-volume import tasks, potentially saving significant time and effort compared to repeatedly troubleshooting issues with the built-in QuickBooks methods.

The Original Text

in this video I’m going to show you four ways to import invoices customer invoices into QuickBooks online now I’m talking about the invoices you issue to your customers and not the bills you get from your vendors or suppliers which are also called invoices but in QuickBooks it’s actually called the bill it’s part of the accounts payable workflow and we’re going to have an entirely different video talking about how to import vendor bills or supplier bills so let’s talk about the four methods that we have to import invoices and QuickBooks Online method number one we’re going to talk about how to import a simple list of brand new customers with lumps some amounts of the opening balances that you have that you want to import into QuickBooks maybe you’re coming from another accounting system maybe you’re starting from scratch and you just want to bring in the customer names and the total dollar amount that those customers owe you so you can import them as a single lumpsum invoice for each of your customers the second method is a CSV import that actually works across all versions of QuickBooks as well that allows you to import a little bit more detail you can import individual invoice numbers with actual separate invoice dates and with even detail line items in each of the invoices this is probably going to be the most popular the most used feature now method number three this one actually only works in QuickBooks Online Advance this is the highest version subscription of QuickBook online but it’s really cool it has a batch enter feature that allows you to do a combination between importing from a CSV file also being able to copy and paste on the fly from your spreadsheet software whether it’s Excel or Google Sheets and being able to edit those things on the Fly prior to importing it’s really neat but it only works in QuickBooks online advanced and most people don’t have QuickBooks Online advance so they might have to resort to Method one or two and the last method the fourth method is when everything else I explained doesn’t work maybe there’s some limitations maybe you have a high volume of transactions you want to import and want to work a little bit more in an automated fashion then you want to bring a third party app you’re going to have to pay a separate subscription for a thirdparty app we’re going to use transaction Pro importer by WR Works which is a very easy to use app you’ll see in the video and you might resort to having to use that fourth method so so let’s jump right to it okay let’s get started with the first method so for some context let’s say I have this spreadsheet that contains three columns customer name amount and as of date this is the date in which you want to bring in this lumpsum opening balance for that specific customer now you could bring in more Fields there’s actually more Fields available to map but I’m just working with the simplest possible terms with the three required fields which is a customer customer name the amount and the ass of date so this is the exact spreadsheet that we’re going to work with and we’re going to import these accounts receivable or these opening balances into QuickBooks online now for some context I’m going to run the balance sheet here and show you the as of December 31st 2022 I don’t have anything in my balance sheet I have no transactions so you’re going to see accounts receivable populate in there once we finish importing those transactions so let me click on the gear menu on the top right of the screen and then I’m going to click on import data and then in this specific case we’re not going to click on invoices that’s going to be the second method actually we’re actually going to click on customers so we’re going to click on this customers option and then we’re going to click on browse to go find that spreadsheet that I showed you earlier on the screen click on browse find the spreadsheet click on open and then once it shows up that it’s been loaded then I simply just click on next on the the bottom right of the screen and then go to the next page then you’re going to see the mapping area where you’re going to get to pick the customer name which is a required field so that matches my spreadsheet customer name now I have a column that says amount and QuickBooks cause this opening balance so just make sure you understand that it’s called amount in my spreadsheet for opening balance in QuickBooks and then the as of date it understood opening balance date so it’s only three Fields being mapped and as you can tell there’s a lot other fields that you can map with this specific method so then I want to click on next on the bottom right of the screen and then I’m going to get a quick preview uh for the data that is going to be imported now with these uh specific opening balance dates it’s very picky in terms of the exact format that it wants I wanted to show you that because you know not all spreadsheets are made equal and sometimes we have to um do sort of fancy things with these spreadsheet so again this is the actual format it’s telling you right there what format you want to follow okay um and then also it’s not going to allow to use that negative so let’s I’m going to go and change the format here of the dollar amounts and I’m just going to change it to General I’m going to get rid of the um the signs I’ll keep the negative there just so you can see then I’ll select these here and I’ll change the formatting and this is kind of the the challenging part is that you kind of have to play with Excel and get a very specific uh format a change here there’s multiple ways of doing it but there is a built-in function in Excel for for reformatting it in that specific format that it wants and then I’m going to go ahead and save it and then I’m going to go back here go back browse select the file one more time because remember I changed it and now I saved it go to next next and let me just go back for a second make sure the mapping is being catched correctly so there’s my mapping then I’m going to go to next okay now it sees the information and this negative is going to give me an error so I click on import oh there’s no error on the import so they actually fixed that so we’ll see exactly how negatives get handled actually I for a moment I thought the negatives wouldn’t allow it to be imported so that’s great um so let’s go back into the balance sheet one more time we’ll pull up a balance sheet and then we’ll go back and pull up data up to 123 2022 click on run report and there is my accounts receivable now just for sanity check let me select all of these and see if these match they do match 32 to 69 so the negative definitely um went in there so I can actually click on the $388,000 click on that and then get to see all the details of what was imported and essentially you see all these transactions get imported as invoices and specifically the negative came in as a credit memo so it’s pretty pretty cool so credit memo is basically opposite of an invoice now you will notice that everything is put into like a generic item called sales and then the description says opening balance pretty much letting you know that none of these things contain any sort of details it just goes into a generic uh income account and um and you can go back in there open them and edit them if you want to but uh if you were going to do that you might as well uh do the second method that we’re about to discuss but that gives you a general idea more or less on how to import these things and again um if these total amounts represented multiple invoice numbers with multiple invoice States and you wouldn’t use this method you would use the different method so the next method we’re going to use we’re going to click on the gear menu then we’re going to click on import data and then we’re going to click on invoices we’re actually going to import via the invoice module and then the import module actually gives you a little sample file to use as an example which is actually best thing to do is to open that sample file and get a get acquainted with the actual uh spreadsheet that they give you so let me bring in the spreadsheet they give us I’ll zoom in uh so we can see a little bit better bigger okay and I’ll delete this bottom notes Here we actually don’t need those bottom notes and essentially take a look at the format of this prad sheet so we have invoice number notice that there’s the same invoice number repeated four times because that’s four lines of data so essentially we have customer chrismith there’s a invoice date there’s a due date there’s terms then we have items specific items that we’re going to uh import so specific line items we have uh some of them have description some don’t we have quantity item rates as quite a bit of detail and as long as uh these invoice numbers are all bunched together you can skip some of these lines like u customer name and in uh and invoice date because it assumes that it really only needs it on the very first on the very top line of that group of transactions so let’s go ahead and save that one and let’s see kind of what happens so couple of things and and I did this on purpose it’s going to show it’s going to give me an error these customers don’t exist already in QuickBook so I won’t know how to import them and these items might also not exist um and these terms might also not exist so there’s a whole bunch of things that it might just not take because the data is not already in QuickBooks in the QuickBooks database so we’ll discuss how to fix all that so let’s go back in here let’s click on browse we’ll get that spreadsheet or that CSV file click on next it’s going to give me my mapping and notice that all my columns are mapped beautiful the spreadsheet column with the QuickBooks column only the ones that have this little asteris are the ones that are required and you can um remove some of them if you actually you don’t want like if you don’t want the memo uh you can um un unselect that one from the from the mapping so you could leave a blank if you wanted to like you actually don’t need to uh map it but as long as they map then you’re good to go then then you click on next and then if there’s an error like an error such as the formatting or the customers don’t exist or the items don’t exist that’s all going to give you um uh obviously it’s all going to give you error so you need to make sure your spreadsheet it’s compatible with this system so let’s play with the spreadsheet a little bit and um and go back to this so we’ll go back open up the spreadsheet and let’s follow the instructions so the first one is the invoice date doesn’t match the format what it wants is month date and year so uh here’s our invoice date we’ll select this right here and go into format cells and then go to date and make sure this is using standard dat for format and then click okay and then in this specific case just this data is just playing wrong it’s just you know maybe you know it’s using an international sort of uh method here so let’s do 12 13 2022 essentially I’m just cleaning up the data in the sample spreadsheet which they give you a very weird one for some reason so this one’s fine and then this one’s also so 12 13 2022 and this one actually what they meant to put is 121 202022 okay so once uh everything here is in a sort of dating format I can tell my uh my Excel that this actually is a dating format okay so everything should be clean dating format uh due date Let’s do let’s just pick the same thing and do plus 30 make it make it pretty simple in the formatting here and I’m just cleaning up my spreadsheet so my spreadsheet makes sense and just for Simplicity sake I’m going to make everything here Net 30 Terms okay okay so that way we can kind of get a little bit farther ahead in the process without spending too much time sort of bored dealing with um um Excel type of things so we cleaned up the dates the due dates and the terms so I’m going to go ahead and click on Save and we’re going to try this one more time and this is not going to be ready but at least guess us a little bit closer so I’m going to go back click on browse pick that spreadsheet again the one that we just edited click on next okay same thing with the with the mapping now notice that there’s a way for you to quickly tell it if there’s so in contrast with the other screen you can tell it if there’s a different uh formatting in this case so in this case this this is the formatting it’s month date year that’s the way it’s supposed to be so if you happen to have it in a different format you can quickly change it in there but I already fixed it on the spreadsheet so I’m going to go to next and then now we have we still have errors but they’re different errors so this one’s telling me hey this customers don’t exist and then here’s telling me hey these items don’t exist so we’ll go and create those items to fix that and then the service date doesn’t match and we could also remove the service date Al together because we actually don’t need service date at all so let’s go back into the spreadsheet here and let’s see if um we just delete the service date let’s just ignore that even though you could use service date if you want to so that will get get us a little bit closer and then next thing I’m going to do is I’m going to um create all these items so while we’re at it kind of sort of a bonus here is I can import my items as well because QuickBooks has an item import feature so let me create a new a spreadsheet really quick and again just simplifying the process here instead of me going into QuickBooks and creating all those items or just assuming that you already would have those items you would just skip this so let’s do item name in this case we’ll paste those items in there we’ll get rid of any duplicates of course cuz we don’t need to um have any duplicates in there so we have trimming design gardening soil rocks and that’s it that’s all really all all that we need so we have an entirely different spreadsheet uh for our items that we’re importing and we could create the items let me excit of this we could create the items on our own so we can just go into sales products and and services and we can come here and new and we can go into service and we can create our soil item or whatever whatever happens to be right and this is going into our sales account so this could be done manually you can create all your items manually but just to kind of like make things easier I’m going to use the import feature uh for items or products and services which I could also click on gear click on import data and inside the same page that we’ve been doing this I can go to products and services and import my items through there and this is going to be a common thing that you’re going to be dealing with when you import uh invoices you might need to import your cust customer list first a detail customer list with addresses and that sort of thing and then you want to import a detail item list this is normal this is going to happen quite often so we’ll pick an item list really quick and we don’t have all the information uh that we need on the import but I’m going to show you the process so I’m going to go to next and then we can map the item name and we also are supposed to have an item uh type and we also supposed to have an income account those are actually required Fields but I’m going to click on next and then notice that everything is pretty much preset for me I just have to make sure that I have these things preset so I’m just to simplify my life I’m literally selecting them here but uh normally you would just have them in your spreadsheet you would just have an entire column here for uh type and this would be called service right and then you would bring that down and then you would have um account and then this would go into sales and then you would bring that down so you would you would have your spreadsheet pre-prepared even with descriptions and that sort of thing if you want to bring it in so you don’t have to come in this page and do all the you know click down and choose it’s only five items so it’s pretty simple so I’m going to go to import and it should give me an error for soil because the soil’s already in my list so perfect no problem now all my items are um officially in QuickBook so when I’m going to go back and import my invoices and select my invoice uh database here my list of invoice database I’m going to click on next on my mapping and then click on next I should have now less errors so now I’m down to only the customers cannot be matched so at that point I would probably pause and import your customer list if you have a big detail like address and emails and that sort of thing you may want to use the customer import feature which we just used we actually show you how to do that with the first method but you would do that without bringing in an opening balance so just bring in the customers cleanly and that’s it uh for the sake of Simplicity here we’re actually going to pick uh the feature where we can create the customer on the Fly there a little check boox here that says add new customers into QuickBook so of course the customers will be created without any details no addresses nothing like that but at least the customers get created for you so that then I can go to the next screen and then I won’t have any more errors it actually says hey we want ahead and imported the invoices for you and we created uh some new customers and I’m going to click on complete import and then we just wait it takes a minute or less all the Imports come in if there’s uh the invoices already exist you’re going to get an error okay and there’s a couple of ways around that so one you can physically go in there and just fix the invoice numbers in your spreadsheet if you want them to come in with a different invoice number or what’s really neat is we can go into uh the gear menu accountant settings and then I believe it’s under sales we can uh change where it says here custom transaction numbers if we turn that off and click on Save then actually our QuickBooks will assign an invoice number for all those invoices so that’s actually more useful for importing sort of real time information whereas if you’re importing uh sort of past information you would probably be respecting those um those invoice numbers um that you have in your spreadsheet so I’m just kind of showing you both methods so so in this particular method QuickBooks will assign brand new set of invoice numbers to those invoices so you have to keep in mind you need to be acutely aware to exactly what is it that you want to do so I’m going to click on okay and then I’m going to go back open up a spreadsheet one more time so we have Chris Smith that had a four line invoice and then we have karuna that had a two-line invoice and karuna again that had a three line invoice so we had karuna with two invoices and Chris with a single invoice with four lines so let’s go into sales invoices and then we we can get to see the invoices are here so let’s find um a couple of invoices here so let’s go into maybe uh karuna let’s go into customers might be easier to go in here and search for karuna so there’s my karuna let me click on karuna there and there’s my two invoices invoice one7 and one5 again they might not match um my list here because the other invoices invoice numbers were taken so we we changed that setting so QuickBooks would just assign an invoice number for me again if you wanted to bring explicitly the invoices on your spreadsheet and not conflict with another invoice in QuickBooks make sure you would you would clean those up and fix them in the spreadsheet first so let’s open up the first invoice here let’s edit the invoice and see that we have one two three lines of data with with a lot of details here so tons of details here on this invoice if I EXC outed that and open up let’s go back into um back into karuna so let’s type karuna there she is and let’s open up the other invoice and click on edit and there’s going to be two lines on this specific one so I’m going to excit of that and I think I have another customer it was Chris Smith or something like that so Chris Smith there we go let’s go into Chris Smith invoice edit that there should be four lines of data there we go and some have descriptions some didn’t all have quantities rates and amounts so that’s method number two for importing invoices I’m now going to switch to a QuickBooks online advanced account uh I was actually working on a Simple Start version of QuickBooks online because the first two methods work across all versions of QuickBooks online but this specific company file actually uses QuickBooks Online advance that has a more sort of fancy um importer feature for invoices so let’s jump on this one okay let’s go into the new button here and then click on batch transactions and again if you don’t see batch transactions in your own QuickBooks Online file it’s because you don’t have QuickBooks online advanced you need that highest version of QuickBooks Online to use this specific feature so here in the drop down menu we have all the different types of transactions that we can import into QuickBooks Online invoices the deposits sales receipts bills those are your vendor Bills or the invoices your vendors or suppliers send you expenses checks and QuickBooks is adding new transaction types to this page all the time so we have this invoices and then we have uh different options here we have create modify or delete so for now we’re going to do create which is for us to uh bring in the information or import the information and then we’re going to click on this little options uh gear it’s really important and under options we get to pick which of these fields we want to import and then all the way in the bottom it’ll tell you which Fields you cannot import into uh currently so you can uh check any of these and for example I’m just going to uncheck all the ones that are not required for a second just so we can just strictly work with the required Fields so I’m unchecking everything here everything everything that’s not grade out so we’re going to have a very simple uh kind of a import uh section here so we’re going to go to apply and now we have essentially very clean 1 two 3 four five um columns in total and you can tweak this so we can go to options here and then maybe use let’s see what we have let’s do quantity description and rate those things are typically used quite a bit so we click on apply now we have a little bit more uh complete importing uh system so I’m just going to really quick go to import CSV and then download the sample file it’s a little bit slightly different sample file than the one on the other example um actually no it’s the exact same one huh I made the mistake I thought it was going to be different so we’ll work off the exact same sample file here and I’ll just change a couple of dollar amounts here so let’s see I’m going to change this quantity three and this item rate to 10 and then I’ll just do a quick uh formula here to make sure that these dollar amounts are being calculated did it correctly we’ll do 2460 and then 610 and then 7 10 and you get the point here we’re just modifying um every single thing here so we’re going to get slightly different uh invoices so now I’m going to um update this formulas to make sure this stuff is all um correct the way the way it’s supposed to be and let’s go back into QuickBooks again and see what fields we have so we have invoice number customer email terms uh all these things came back oh oops let’s uncheck this again not fun I don’t know why I did that but let’s uncheck this again one more time we’ll keep description quantity rate we said and we’ll uncheck the rest of them so I don’t know why it did that that’s uh you know QuickBooks is weird sometimes like I just I had it perfect and then it changed it for me okay so invoice number customer invoice date product and service so I’m going to make sure because this is a copy and paste interaction I’m going to make sure that my spreadsheet looks identical so we have invoice number check we have customer name check then we have invoice date check and then we have product and service so we’ll insert um a column here and then we’ll bring in our items which are our product and services and we’ll bring those guys back in there the next one is description so let’s insert column here cut the description and bring in the description the next one is quantities we actually don’t need any of these things uh because we’re not using those we don’t need any of these things and there we go so now we’re down to um exactly what QuickBooks has invoice customer invoice date item uh item description quantity item rate item amount okay good so I think that we can cross our fingers and see if this is going to work so let’s let’s copy all this information is simply just copy and paste so we’re going to hit copy so a regular simple clipboard come back into here and then we are going to right click and paste see what happens and cross her finger see if that works something didn’t quite work don’t know why the customer wasn’t in QuickBooks let’s just check one more time so Chris Smith signing QuickBooks that’s curious let’s see let’s paste that oh of course this is a new company file that’s why chrismith is not in here so that’s one of the challenges that you’re going to have here is that uh you dating format didn’t work product and service didn’t work because it’s an entirely different QuickBooks Online uh file okay so I would have to go in QuickBooks now make sure that my uh customers are being imported first my items are being imported first and then we can go from there for Simplicity sake what I’m going to do is I’m going to grab an actual customer name from my database and a um and a an actual item from my database and just clean it up in Excel so let’s grab a customer here a random we’ll pick this one let’s pick that one and then we’ll grab this information going to the spreadsheet and paste that in there let’s grab another customer here random let’s grab Angie copy that and paste that in here and paste that in here and then we’ll grab another customer here random Boris Jones copy that go back in here and paste it so again we just making sure that my spreadsheet actually matches what my QuickBook is supposed to be then I’ll look at my products and services and then I’ll pick this thing called the sign 11 just to simplify our life here and then we’ll grab and bring this item here called design 11 and just to simplify things that’s the item that we’ll use for every single um item and then the invoice date I think uh the formatting requires to have the four the four um digit year it’s very very picky um so we’re going to come in here and right click and go into format so this is an Excel thing and then we’ll go and see if we can do some sort of custom uh let’s see if there’s some sort of custom option here I guess this one will do click okay okay beautiful now we’re thinking of that could work so now let’s copy this information over click copy and then we’ll just for the sake of Simplicity we’ll cancel out of this and kind of just start over start with a clean slate just in case we’re not confused by the data that’s already in there and now we’re going to right click here and click on paste and then I’ll cross our fingers now see if that works and that worked so that brought all the information in here this is a preview screen again we can make any changes on the fly if something didn’t import correctly which is was pretty neat you could change any of these things on the Fly only issue that you have is if you change any of these things you know the prices can change and that sort of thing because QuickBooks has a different price for that database so again if you wanted if you didn’t want that to change then you would have to change that in your spreadsheet prior to changing it here so you want to be very careful with not manipulating the data after the fact because it won’t be true to your spreadsheet so so at that point then we’ll click on uh save and that will import all the transactions into uh QuickBooks online if you have any errors you can click on the little error that says uh in this case select a date that you started tracking inventory item so in this particular case is because um these are inventory items and when you create your inventory items you give it a sort of a starting date to as of when you’ll be able to uh bring those um items into any transaction and these items were brought in afterwards so uh that was an example of me using a inventory item so instead what I’m going to do is I’m going to pick an item that’s not an inventory item so I’ll pick this thing here called tree removal as the item so I’m going to go back and just exited the screen one more time going into my spreadsheet and again I like the fact that this kind of issues happen on the fly so you get an idea for the sort of issues you’re going to encounter it’s not straightforward it’s a lot of moving Parts if you’re bringing stuff with inventory you have to make make sure that inventory was created um prior to that um this those transaction dates and that sort of thing so let’s copy and paste this back into the batch action screen we’ll try this one more time paste that cross our fingers one more time see that works okay that worked in there now we’re going to click on Save okay see what happens I got another error that I can’t identify so what I’m going to do is I’m actually going to import uh via CSV um with that same file that I was working on just now and then bring it in see what happens that screen is all crazy okay and now um the way it brings it in now it actually segregates it and it hides these lines for me and actually I know exactly what happened is when you actually just do a straight copy and paste it assumes that every one of these rows is a separate transaction number which is that’s part of the issue so in this screen you actually have to um tell it that this is a new line item and and you have to click here and click on new line item and it grad them out for you and that’s how the system recognizes that they’re um they’re part of the same transaction so it’s it’s definitely different behavior and I literally just discovered that by using the import feature instead of the copy and Pace feature because I wasn’t noticing that specific uh situation so this is a a very specific example where this is actually not going to work uh with a straight copy and paste if you don’t know the intricacies of the system and you might need to start with a sort of CSV import and then maybe copy and paste different individuals individual things from from here and then finally you know can I cross my fingers now and see if it’s going to import this screen is so so quirky all right so let me go to save and okay got one in let’s see what this tells me uh we still have the same issue with the invoice number so yeah so that’s the same problem we had before um we’ll just that’s a couple of random numbers there click on Save and hopefully that should finish importing that was an extra line that I added there uh that wasn’t consequential finally something important so let me ex out of this and then I’ll go into my customers and then let’s look for Angie I had a customer Ang there let’s open her up and then let’s see there’s the invoice that we imported actually two invoices that we imported so we can edit the invoice and see what we brought in and there we go there’s tree removal and all the descriptions all the quantity and rate so I actually don’t love that third method it’s not my favorite one as you can tell I even struggled during the import and it really is because it’s just designed in a very strange way not very intuitive but it actually works like if you’re actually if you’re at it and you read the errors and you just keep trying over and over you’ll find a way to make it work that’s why I like the first two methods so much better and as a matter of fact that’s why I like using a third party app to import so much better you know I don’t think that it’s worth upgrading to QuickBook sell in advance to get that batch interface feature because it’s really just it’s more time consuming to learn the quirks of it versus using a third party app which is going to save you so much time so let’s jump into a third party app so we can show you how that works okay so for this specific example we’re going to use an app called transaction Pro imported by WR work so I’m just going to go straight into the URL I’ll put that URL in the description so you can go straight into the 7-Day trial page it’s going to be much easier than trying to figure out how to add it through any other method like you go straight into this page is like the best way to do it so I’m going to click on I’m using QuickBooks online and then I’m going to click on sign in with into it that’s how I can um uh log in into the free trial specifically using my existing QuickBooks online account as the login mechanism then I’m going to click on add new subscription monthly and then pick which one works best for you and it really depends on how many company files you’ll be importing to and how much volume rows of data you want to import so for now let’s say we’re just going to use this lowest version here then we’re going to click on connect to QuickBook so we can tell which company file we’ll be connecting this uh transaction Pro into and we’re going to pick our QuickBooks Online file from our list if we have multiple QuickBooks Online files that we manage you would pick one from the multiple you have if you just have one it’ll just show one so I picked my company file then I click on next and connect and that should connect my transaction Pro into QuickBooks online so I can start importing transactions into it I’m going to click on companies and then go to where it says a go to app not very intuitive it’s just kind of and kind of very techy type of app so we’ll go to now we’re in transaction Pro and then you have a couple things we can import data we can export import data and we can delete file for now we’re going to import cuz that’s what we’re doing here so I’m going to click on import file okay and then here’s a list of all the things you can import so you can import chart of accounts import bank statements you can import invoices journal entries all sorts of transactions that you can import for now we’re just going to pick uh invoices which is what we’re doing so I’m going to click on invoices and then I’m going to click and I’m going to drag and drop the file into this um this area here so I’m going to use this exact same uh file that we have here I’m going to drag and drop this same file in here but in order to make this a little bit different I’m going to change some of the customer names so let’s go back and pick another customer name from my company file let me switch back to um the company file I was working on which is a simple company file and let’s just go into a our customer list and grab a couple customers from here so we got Linda higs let’s copy Linda hig’s name and go back into our spreadsheet and replace just paste in here and we’ll click and drag that down let’s just make everything Linda higs make it easier right so we’ll click on Save and now we’ll go back into transaction Pro and then we’re going to select a file drop it in there click on select file and Sheet now we’ll click on import sheet and then we’ll do our our mapping so my reference number is my invoice number my customer is my customer name transaction date invoice date again we’re matching um our spreadsheet to the fields that are importable in um in transaction Pro we’ll go down here to the item should be here somewhere there’s my line item that’s going to be this item product and service there’s my description and there’s my quantity obviously a lot more of a techie of an app and then line amount or actually line there let’s do unit price first unit item rate and then line amount okay perfect so there’s you can see all the fields are importable you there’s a lot more Fields you can import via transaction Pro or third party app versus doing the built-in uh import system so it’s good for you to sort of check out and kind of see hey what’s you know what can I import with the built-in system what can I import with a third party app so you can decide is it worth it for me to pay a separate app to be able to import uh transactions into QuickBooks online so that’s I’m going to click on preview and import then you’re going to get this little spreadsheet looking thing kind of walking you through okay all the data that’s going to be imported notice that there’s an options button and there’s a couple of interesting things you want to go through all these options to see if any of these things are useful like you know automatically import a customer name automatically create a new item all those things are actually uh available for you to sort of tweak in the settings if you start getting errors on the import okay so now I’m going to click on uh import and then click on yes we’re going to wait to see what happens and for large volume and when you already have sort of pre-formatted spreadsheet that you kind of know how it’s going to be imported this is always going to be better and you also get errors if there’s an issue that happens so um let’s see what kind of Errors we have here so we’re having errors with the invoice num so same sort of issue we were having before just invoice numbers are off so I can change them on the spreadsheet import them again or I can just change them here so I’m just going to copy that here and paste so I can fix on the fly or again you probably want to fix these things really it’s in the in the spreadsheet itself right because you’re supposed to save time by having this information um already separated okay so again remember that I didn’t know that I had this invoice numbers in QuickBooks Online already so let’s try that now they all have individual diff separate invoice numbers but I made all the ones are the same transaction I made them the same number so QuickBooks knows to Bunch them together into the same transaction so let’s go into import I’ll hit yes cross our finger see what happen happens now and there we go all your data was imported successfully so let’s take go back into QuickBooks we’ll refresh Linda higs and we should see a lot more invoices in here now here we go all the invoices that we imported if I click on any of these and click on edit I should see um the data that was imported straight from the spreadsheet so that gives you essentially four methods four ways to import transactions into QuickBooks Online the Third party app method whether you use transaction Pro or any other uh system and I’ll put the link to transaction Pro in the description so if you want to do a 7-Day trial yourself as well welcome to do so um for larger volume um this going to be much better the errors that you get in the third party app are a lot more precise and um essentially for a very long time before these other methods existed a third party app was the only way to import data into QuickBooks Online it will probably be continue to be the King on until in it figures out how to have their own easy to use complete with every field uh import method okay unfortunately the built-in methods they kind of work and you you saw the video you saw all the all the landmines that that that I stepped on and you saw all the things that needed to be tweaked and you should be able to decide for yourself which method works better for you so I showed you all the methods so you can decide my recommendation is always try the built-in methods and if that doesn’t work go for the the third party app CU that’s going to be probably the most foolproof way anyway I hope you enjoy this video and I’ll see you on the next one

By Amjad Izhar
Contact: amjad.izhar@gmail.com
https://amjadizhar.blog

Affiliate Disclosure: This blog may contain affiliate links, which means I may earn a small commission if you click on the link and make a purchase. This comes at no additional cost to you. I only recommend products or services that I believe will add value to my readers. Your support helps keep this blog running and allows me to continue providing you with quality content. Thank you for your support!

This video explains how to manage accounts receivable in QuickBooks Online. It covers the workflow from creating estimates to invoicing customers and receiving payments, including handling partial payments and using undeposited funds. The video also demonstrates creating invoices directly without estimates and managing overdue invoices with credit memos. Furthermore, it explores recording customer payments received via various methods, such as cash and credit cards, addressing bank fees, and utilizing the bank feed for matching transactions. Finally, the video illustrates managing billable time and expenses, utilizing delayed charges and credits, and generating customer statements for tracking transaction history.

QuickBooks Online Accounts Receivable Workflow Study Guide

Quiz

1. What does “accounts receivable” mean in the context of QuickBooks Online?
2. Briefly describe the pre-sale cycle in QuickBooks Online using the accounts receivable workflow.
3. What is the purpose of converting an estimate to an invoice in QuickBooks Online?
4. Explain two different ways to create an invoice in QuickBooks Online.
5. Describe the purpose of the “Receive Payment” function in QuickBooks Online and where it can be accessed.
6. What is “undeposited funds” and why might a business use this account when receiving payments?
7. Explain the purpose and process of creating and applying a credit memo in QuickBooks Online.
8. Describe how to record a partial payment from a customer in QuickBooks Online.
9. How can bank feeds in QuickBooks Online be used to manage accounts receivable, and how are fees typically recorded in this process?
10. What are delayed charges and delayed credits in QuickBooks Online, and when might a business use them?

Quiz Answer Key

1. Accounts receivable in QuickBooks Online refers to the process of recognizing a sale when a customer agrees to buy something, with the expectation of receiving payment at a later date. This workflow is used when payment is not received at the same time as the sale.
2. The pre-sale cycle begins when a customer expresses interest in purchasing a product or service. The business then creates an estimate (or quote) outlining the offer. If the customer accepts, the estimate is later converted into an invoice.
3. Converting an accepted estimate to an invoice formally documents the sale and creates a bill that the customer owes. This initiates the accounts receivable process, allowing the business to track outstanding payments.
4. An invoice can be created by clicking the “New” button and selecting “Invoice,” which allows for direct invoice creation. Alternatively, an accepted estimate can be converted into an invoice, carrying over all the details from the estimate.
5. The “Receive Payment” function in QuickBooks Online is used to record when a customer pays an outstanding invoice. It can be accessed by clicking the “New” button and selecting “Receive Payment,” directly from an open invoice, or from the “Receive Payment” button next to an invoice in the sales tab.
6. “Undeposited funds” (or “payments to deposit”) is a temporary holding account for customer payments that have been received but not yet deposited into the bank. Businesses use this account when they receive multiple payments that will be deposited together as a single lump sum, making bank reconciliation easier.
7. A credit memo is used to reduce the amount a customer owes, often due to a mistake or allowance. It is created by clicking “New” and then “Credit Memo,” selecting the customer and the amount of the credit. To apply it, you go to “Receive Payment,” select the customer, and ensure both the invoice and the credit memo are checked.
8. To record a partial payment, navigate to “Receive Payment,” select the customer and the relevant invoice, and then enter the actual amount received in the “Amount received” field. QuickBooks will then show the remaining balance due on the invoice.
9. Bank feeds allow users to match downloaded bank transactions with existing invoices in QuickBooks Online. Instead of manually recording payments and deposits, users can find matching invoices for deposits or resolve differences by adding bank fees as negative amounts within the bank feed screen.
10. Delayed charges are records of services or products provided to a customer that you intend to invoice later. Delayed credits are similar but represent amounts you intend to credit the customer in a future invoice. Businesses use them to track billable activities or credits without immediately creating invoices.

Essay Format Questions

1. Discuss the complete accounts receivable workflow in QuickBooks Online, from the initial customer inquiry to the final payment and deposit, highlighting the key steps and their importance.
2. Explain the different methods for receiving customer payments in QuickBooks Online, including the use of undeposited funds and direct bank deposits, and analyze the advantages and disadvantages of each method for different business scenarios.
3. Describe how QuickBooks Online facilitates the management of overdue invoices and customer balances, including the use of credit memos and journal entries for adjustments.
4. Analyze the integration of bank feeds with the accounts receivable workflow in QuickBooks Online, explaining how matching transactions and recording bank fees directly within the bank feed can streamline the accounting process.
5. Evaluate the features in QuickBooks Online that allow businesses to track and invoice for billable time and expenses, and discuss how these features can improve accuracy and efficiency in the billing process.

Glossary of Key Terms

• Accounts Receivable (A/R): The balance of money due to a company for goods or services delivered or used but not yet paid for by customers.
• Estimate: A non-binding quote provided to a potential customer outlining the cost of proposed goods or services.
• Invoice: A formal bill issued to a customer for goods or services provided, indicating the amount due and payment terms.
• Sales Tab: A section in QuickBooks Online that provides an overview of sales transactions, including invoices, payments, and customers.
• Receive Payment: A QuickBooks Online function used to record payments received from customers against outstanding invoices.
• Undeposited Funds: A temporary holding account in QuickBooks Online used to store customer payments before they are deposited into a bank account.
• Bank Deposit: A QuickBooks Online function used to record the transfer of funds from the undeposited funds account or directly from a received payment into a specified bank account.
• Credit Memo: A document issued to a customer to reduce the amount they owe, often due to returns, allowances, or errors.
• Bank Feed: A feature in QuickBooks Online that automatically imports transaction data from linked bank and credit card accounts.
• Find Match: Within the bank feed, this option allows users to link downloaded bank transactions to existing transactions (like invoices and payments) already recorded in QuickBooks Online.
• Resolve Difference: Within the bank feed matching process, this feature allows users to account for discrepancies between the downloaded bank amount and the matched QuickBooks transactions, often used for recording bank fees.
• Billable Time: Time tracked by employees or contractors that will be charged to a specific customer.
• Billable Expenses: Costs incurred by the business that will be passed on and invoiced to a specific customer.
• Delayed Charge: A record in QuickBooks Online of a service or product provided to a customer that will be added to an invoice at a later date.
• Delayed Credit: A record in QuickBooks Online of an amount that will be credited to a customer on a future invoice.
• Journal Entry: A manual accounting entry used to record financial transactions that are not easily captured through standard forms, often used for adjustments like writing off bad debt.
• Customer Statement: A summary document showing a customer’s outstanding balance, including invoices, payments, and credits over a specific period.

QuickBooks Online Accounts Receivable Workflow Briefing Document

Date: October 26, 2023 (Based on the context of the provided text referencing December 2023 and February 2024) Source: Excerpts from “Pasted Text” (Video Transcription on QuickBooks Online Accounts Receivable)

Overview:

This briefing document summarizes the main themes, concepts, and procedures for managing accounts receivable (AR) and recognizing income in QuickBooks Online (QBO) as described in the provided video transcription. The video focuses on the end-to-end AR workflow, starting from the pre-sale stage to receiving payments and handling various scenarios like credit memos, billable time, billable expenses, and adjustments. It also touches upon utilizing bank feeds for transaction matching and generating customer statements.

Main Themes and Important Ideas:

1. Accounts Receivable Workflow: The core concept is that income is recognized when a sale agreement is made with a customer, potentially leading to a future payment. This necessitates the use of the accounts receivable workflow in QBO.

• Quote: “accounts receivable simply means that you’re going to recognize a sale whenever the customer agrees to buy something from the business and then possibly you will get a payment on that in the future.”
• The video emphasizes that if payment is received simultaneously with the sale, the AR workflow can be skipped (covered in another video).

1. Pre-Sale Cycle and Estimates: The process often begins with an estimate provided to a potential customer.

• Creating an estimate in QBO involves selecting the customer, detailing products or services with quantities and prices, and saving the estimate.
• Estimates initially have a “pending” status and can be changed to “accepted” upon customer agreement.
• Quote: “the first thing you’re going to do is you’re going to give them an estimate essentially you’ll recognize that uh you’re going to make them an offer and then the customer will at some point email you back or call you back and say I’m ready to accept the offer let’s move forward and then we turn that into an invoice later on.”

1. Invoicing: Once an estimate is accepted, it can be converted into an invoice. Alternatively, invoices can be created directly without an initial estimate.

• Converting an estimate to an invoice copies all the information, which can then be further edited.
• Invoices require selecting a customer, specifying products or services, quantities, prices, invoice date, and due date based on payment terms.
• Quote: “when it gets converted from pending to accepted a link to convert to invoice shows immediately essentially guiding you to the process that you should at this point invoice your client so they can pay you.”
• QBO tracks invoices, allowing users to filter by all invoices or unpaid invoices.

1. Receiving Payments: There are multiple ways to record customer payments in QBO.

• Directly from the “Receive Payment” screen: Accessed via the “+” “New” button, this requires selecting the customer and then choosing the invoice(s) being paid.
• From the Invoice Screen: Opening an invoice provides an “Actions” button with a “Receive Payment” option, which pre-selects the customer and the invoice.
• From the Sales > Invoices List: A “Receive Payment” button next to each unpaid invoice allows quick access.
• From the Sales > Customers List: Within a customer’s details, options include receiving payment.

1. Undeposited Funds: This is a crucial temporary holding account for customer payments before they are deposited into the bank.

• It’s recommended when receiving multiple payments that will be deposited together as a lump sum, ensuring bank reconciliation is easier.
• Quote: “on depositor funds or payments to deposit should be a current asset account designed to hold your customer payments until you make the deposit.”

1. Recording Bank Deposits: When payments held in “Undeposited Funds” are actually deposited into the bank, a “Bank Deposit” transaction needs to be created.

• This screen shows all payments in “Undeposited Funds,” allowing users to select the payments included in a specific deposit, choose the bank account, and enter the deposit date.
• Quote: “essentially what you see here which is this group of transactions that are sitting here under the select the payments included in this deposit these are your undeposited funds and essentially you click on one then the other you see how it adds up…”

1. Credit Memos: Used to recognize a reduction in the amount a customer owes, without directly editing a previously issued invoice (especially for prior periods).

• Created via the “+” “New” button, a credit memo is linked to a specific customer and details the reason and amount of the credit.
• Credit memos don’t automatically apply to invoices; they need to be linked through the “Receive Payment” screen by checking the credit memo for the relevant customer.
• Quote: “instead of going back and editing the invoice which is generally not suggested especially when it’s from previous periods what you want to do is you want to recognize a reduction of that account’s receivable a reduction of the money the customer owes you by creating a credit memo.”

1. Petty Cash: Payments can be recorded as being received into a petty cash account instead of a bank account or undeposited funds, useful for tracking cash on hand.

• Funds can later be transferred from petty cash to a bank account if needed.

1. Handling Credit Card Fees: When a customer pays by credit card, the deposited amount in the bank might be less than the invoice amount due to transaction fees.

• The full payment is initially recorded (often to Undeposited Funds).
• During the bank deposit recording, the fee is entered as a negative amount, allocated to a “Merchant fees” or similar expense account, to reconcile the deposit with the bank statement.
• Quote: “that difference is a fee so if I take $1,000 minus 97131 I get a amount of 28.6 and that’s the amount that the bank took from you to be able to receive uh a payment through a credit card now that’s going to be a negative amount so that’s a really important piece…”

1. Matching Bank Feed Transactions: QBO’s bank feed allows matching downloaded bank transactions to existing invoices and payments, streamlining reconciliation.

• Instead of manually recording payments and deposits, users can “Find Match” for a bank deposit and select the corresponding invoices.
• For credit card deposits with fees, the “Resolve the difference” option in the “Find Match” screen allows entering the fee as a negative amount linked to a merchant fees expense account.

1. Billable Time: In QBO Essentials and above, time spent on customer projects can be tracked and marked as billable.

• Time activities are entered, linked to a customer, and marked as billable with a specific rate.
• When creating an invoice for that customer, QBO displays any pending billable time that can be added to the invoice.
• Quote: “keep in mind that this doesn’t automatically invoice your customer it just keeps it pending for you to be able to invoice them later in the future when it’s time to invoice them.”

1. Delayed Charges and Credits: Available in QBO Essentials and above, these features allow recording services provided or overcharges without immediately creating an invoice or credit memo.

• Delayed charges serve as reminders to invoice for specific services later.
• Delayed credits track amounts to be credited to a customer in the future.
• When invoicing, delayed charges and credits for a customer can be added to the invoice.

1. Billable Expenses: In QBO Plus and above, expenses can be assigned to a specific customer and marked as billable.

• When creating an invoice for that customer, the billable expense can be added to the invoice, allowing for reimbursement.
• Quote: “with QuickBooks Online plus you’re able to assign an expense to a specific customer so then when we Mark that expense billable uh you’ll be able to create an invoice with that specific line item.”

1. Adjusting Old Accounts Receivable with Journal Entries: An advanced technique, typically used by accounting professionals, to write off uncollectible balances.

• A journal entry is created to credit the Accounts Receivable account (reducing the balance) and debit an expense account like “Bad Debt” or a sales-related contra-account.
• This journal entry then needs to be applied to the old invoice using the “Receive Payment” screen with a zero amount received.

1. Customer Statements: QBO allows generating statements to provide customers with a summary of their invoices, payments, and outstanding balances.

• Different types of statements are available:
• Balance Forward: Shows the opening balance, new charges, payments, and the closing balance.
• Transaction Statement: Lists all transactions within a specified date range.
• Open Item Statement: Shows only the unpaid invoices.
• Users should explore each type to determine the most suitable one for their needs and their customers’ understanding.

Key Takeaways:

• QuickBooks Online offers a comprehensive suite of tools for managing accounts receivable, from initial customer engagement to final payment.
• Understanding the different stages of the AR workflow (estimate, invoice, payment) is crucial for accurate income recognition.
• Utilizing features like “Undeposited Funds” and bank feed matching can significantly improve efficiency and accuracy in reconciling payments.
• Credit memos and journal entries provide mechanisms for adjusting customer balances when necessary.
• Billable time and expenses allow for accurate invoicing of services and costs incurred on behalf of customers.
• Customer statements are essential for communicating account status and history to clients.

Next Steps:

• Review the full video for detailed visual guidance on performing these actions in QuickBooks Online.
• Consult additional resources mentioned in the video description for related topics like recording income without using the AR workflow, managing accounts payable, and deeper dives into bank feeds and reports.
• Consider practicing these workflows in a QBO test environment to gain hands-on experience.
• If using advanced techniques like journal entries for AR adjustments, ensure a thorough understanding of accounting principles or consult with an accounting professional.

Frequently Asked Questions: Managing Income with QuickBooks Online Accounts Receivable Workflow

1. What is the accounts receivable workflow in QuickBooks Online, and when should I use it?

The accounts receivable (A/R) workflow in QuickBooks Online is used to manage income recognition when you make a sale to a customer who agrees to buy now and potentially pay later. This involves several steps, starting with a pre-sale cycle (like creating an estimate), followed by invoicing the customer for the goods or services provided, and finally recording the payment when it is received. You should use this workflow when you don’t receive payment at the exact time of the sale. If you receive payment immediately, you can use a simpler method of recording income directly as a sales receipt or within the bank feed.

2. What is the typical pre-sale cycle within the accounts receivable workflow in QuickBooks Online?

The pre-sale cycle often begins when a customer expresses interest in purchasing something from your business. The first step is usually to create an estimate (or quote) outlining the proposed products or services, their quantities, and prices. If the customer accepts the estimate, you then convert the estimate into an invoice, which is the official bill you send to the customer requesting payment.

3. How do I create and manage invoices in QuickBooks Online?

You can create an invoice in QuickBooks Online by clicking the “New” button and selecting “Invoice.” You’ll then choose an existing customer or add a new one, specify the products or services being sold (including descriptions, quantities, and rates), and set the invoice date and due date based on your payment terms. You can customize the invoice and then save it, save and send it to the customer, or print it. Once created, you can track your invoices in the “Sales” tab under “Invoices,” where you can filter by all invoices or just unpaid ones to manage your accounts receivable.

4. What are the different ways to record customer payments in QuickBooks Online, and what is “undeposited funds”?

There are several ways to record customer payments:

• By clicking “New” and then “Receive Payment,” which allows you to select the customer, payment date, payment method, and the invoices being paid.
• Directly from an invoice by clicking the “Receive Payment” option within the invoice actions.
• From the “Sales” tab under “All Sales” or “Customers,” where you can find invoices and related payment options.

Undeposited funds (or sometimes “Payments to deposit”) is a temporary holding account for customer payments that you’ve received but haven’t yet deposited into your bank account. This is particularly useful if you receive multiple payments that you deposit together as a single sum. By using undeposited funds, you can then record a single bank deposit in QuickBooks that matches your bank statement, making reconciliation easier.

5. How do I handle situations where a customer is due a credit or when an invoice needs adjustment after it has been issued?

For situations where you need to reduce the amount a customer owes without directly editing a previously issued invoice (especially from a prior accounting period), you can create a credit memo. A credit memo reduces the customer’s outstanding balance. To apply a credit memo to an invoice, you typically go to “New,” then “Receive Payment,” select the customer, and ensure both the invoice and the credit memo are checked. QuickBooks will then link the credit memo to the invoice, reducing the outstanding balance.

6. How can I account for bank fees or transaction fees when customers pay via credit card in QuickBooks Online?

When you receive a credit card payment, the amount deposited into your bank might be less than the invoice total due to transaction fees charged by the bank or payment processor. To accurately record this, you can initially record the full payment received into “undeposited funds.” When you then record the bank deposit (“New” > “Bank Deposit”), you’ll enter the actual amount deposited. The difference can be accounted for by adding a line item to the deposit screen with a negative amount, categorized to an expense account such as “Merchant Fees” or “Transaction Fees.” You can optionally specify the payment processor (e.g., Stripe) as the “Payee.”

7. How can I link billable time and expenses to customer invoices in QuickBooks Online?

QuickBooks Online (Essentials and Plus versions) allows you to track billable time and expenses. You can enter billable time through “New” > “Single time activity,” associating the time with a specific customer, service, and billable rate. When you later create an invoice for that customer, QuickBooks will show a drawer on the right side listing any pending billable time that can be added to the invoice. Similarly, in QuickBooks Online Plus, you can mark expenses as billable when entering them (“New” > “Expense”) by checking the “Billable” box and assigning the expense to a customer. These billable expenses will also appear as items to add when creating an invoice for that customer.

8. What are delayed charges and delayed credits, and how can they be used for invoicing?

Delayed charges and delayed credits (available in QuickBooks Online Essentials and above) are non-posting transactions used to track services or credits that you want to invoice to a customer at a later date. A delayed charge records work or services provided without immediately creating an invoice. A delayed credit records an amount you intend to credit to a customer’s future invoice. You can enter these through the “New” button. When you’re ready to invoice the customer, you can create a new invoice, and QuickBooks will display any outstanding delayed charges and credits for that customer, allowing you to add them to the invoice. This is useful for consolidating multiple charges or credits into a single invoice, often done at the end of a month or project.

QuickBooks Online: Managing Income Recognition

Based on the video transcript you provided, QuickBooks Online offers a comprehensive system for managing income recognition through the accounts receivable workflow. This workflow is particularly useful when a sale is recognized before payment is received.

Here’s a breakdown of the key aspects of using QuickBooks Online for this purpose, as described in the video:

• Pre-Sale Activity: Estimates:
• The process often begins with creating an estimate for a customer who expresses interest in buying a product or service.
• You can create estimates by selecting the customer from a drop-down menu or adding a new customer on the fly, including details like name, address, phone number, and email.
• Estimates can include a billing and a separate shipping address.
• QuickBooks automatically assigns estimate numbers, but you can customize this sequence.
• You can specify the products or services being quoted, including quantity, rate, and description.
• For QuickBooks Online Plus users, inventory items can also be added to estimates.
• Estimates initially have a pending status. Once the customer accepts, the status can be changed to accepted, which then provides a direct link to convert the estimate into an invoice.
• Creating Invoices:
• Invoices can be created directly or by converting an accepted estimate. Converting an estimate automatically copies over all the information.
• You can still edit an invoice after it’s created from an estimate. Linked transactions are highlighted, showing the origin of the invoice.
• When creating an invoice, you can select the invoice date and set a due date based on payment terms (e.g., net 15, 30, 60 days), which is fundamental to accounts receivable management.
• You can add products and services to the invoice, specifying descriptions, rates, and quantities.
• Sales tax can be enabled and calculated on taxable items (though this video focuses on non-taxable examples).
• Invoices can be saved, saved and closed, or reviewed and sent directly to the customer via email or printed and mailed. Sending an invoice officially means the customer owes you money.
• Managing Invoices:
• All created invoices can be found under the Sales tab, in the Invoices section.
• You can filter the invoice list to view all invoices or only unpaid invoices, which represent your accounts receivable.
• The system displays the total amount due and indicates if any invoices are overdue based on the set terms.
• Receiving Payments:
• There are several ways to record customer payments in QuickBooks Online.
• You can use the New button and select Receive Payment to open a blank payment screen where you choose the customer and then see their outstanding invoices.
• You can also initiate payment recording directly from the invoice screen via an Actions button or from the Sales > All Invoices list using a Receive Payment button next to the invoice.
• Another method is through the Customers list, where you can find an invoice and select Receive Payment from the options.
• When recording a payment, you specify the payment date and payment method (e.g., check, credit card). You can customize the list of payment methods.
• If you have QuickBooks Payments enabled, payments made online by customers can be automatically recorded.
• For checks, you can record the customer’s check number.
• You can record partial payments if a customer underpays.
• A crucial decision when receiving payment is where to deposit the funds:
• Directly to a bank account if you deposit individual payments immediately.
• To Undeposited Funds (or Payments to Deposit) if you receive multiple payments and deposit them together as a lump sum. This helps in bank reconciliation.
• Recording Bank Deposits:
• If you use the Undeposited Funds account, the next step is to record the bank deposit by clicking New > Bank Deposit.
• QuickBooks will display all payments held in Undeposited Funds.
• You select the payments included in a specific deposit and the date the deposit was made to the bank, as well as the bank account it went into. This allows you to match your QuickBooks records with your bank statements when reconciling.
• Handling Credit Memos:
• If you need to issue a credit to a customer (e.g., for a mistake), you can create a credit memo. This reduces the amount the customer owes.
• Credit memos are created via the New button > Credit Memo and are linked to a specific customer and the product/service for which the credit is being issued.
• Credit memos do not automatically apply to invoices. You need to go to New > Receive Payment, select the customer, and then ensure the credit memo is checked to apply it to the relevant invoice. The “amount received” in this case might be zero, as you’re just matching the credit to the debt.
• Managing Cash Payments with Petty Cash:
• If a customer pays in cash and the cash is not immediately deposited, you can record the payment into a petty cash account (which you might need to create) instead of a bank account or Undeposited Funds.
• Later, when the cash is deposited into the bank, you can record a transfer from the petty cash account to the bank account.
• Handling Credit Card Fees:
• When receiving credit card payments, banks often charge a transaction fee, resulting in a net deposit amount that is less than the invoice total.
• You can record the full payment initially to Undeposited Funds.
• Then, when recording the bank deposit (New > Bank Deposit), you select the credit card payment and enter the actual amount received from the bank.
• The difference is the bank fee, which you record as a negative amount on an additional line in the bank deposit screen.
• You categorize this negative amount to an appropriate expense account, such as Merchant Fees, Transaction Fees, or Credit Card Fees. You can optionally specify the bank or payment processor (e.g., Stripe) as the vendor.
• Utilizing Bank Feeds:
• QuickBooks Online allows you to connect to your bank accounts and download transactions via bank feeds.
• Instead of manually recording payments and deposits, you can match bank feed deposits with existing invoices. By clicking on a deposit transaction in the bank feed, you can select Find Match and then choose the invoices that correspond to that deposit.
• When a bank feed deposit reflects a credit card payment with a fee, you can match the gross payment to the invoices and then use the Resolve Difference option to add a negative amount for the fee, categorizing it to the merchant fees expense account.
• Working with Billable Time and Expenses:
• Billable Time (requires QuickBooks Online Essentials or higher): You can track time spent on a customer’s work and mark it as billable. This time can then be easily added to an invoice for that customer.
• Delayed Charges and Credits (requires QuickBooks Online Essentials or higher): You can record services or charges incurred for a customer without immediately invoicing them using delayed charges. Similarly, you can record delayed credits. These can be compiled and added to an invoice at a later date.
• Billable Expenses (requires QuickBooks Online Plus or higher): You can assign expenses (e.g., shipping costs) to a specific customer and mark them as billable. These expenses can then be added to the customer’s invoice for reimbursement.
• Adjusting Accounts Receivable with Journal Entries:
• For advanced users (like accounting professionals), journal entries can be used to directly adjust accounts receivable balances, for example, to write off old, uncollectible debts. This involves debiting a bad debt expense (or similar) account and crediting the accounts receivable account for the customer.
• After creating the journal entry, you still need to go to New > Receive Payment, select the customer, and match the journal entry to the outstanding invoice to clear it from the accounts receivable aging report.
• Creating Customer Statements:
• QuickBooks Online allows you to generate customer statements that show the history of invoices and payments for a specific customer.
• You can choose from different types of statements, such as Balance Forward, Transaction Statement, and Open Item Statement, each presenting the information in a slightly different way. You should review each type to determine which best suits your needs and your customers’ understanding.

In summary, QuickBooks Online, as described in the video, provides a robust set of tools for managing the entire accounts receivable cycle, from creating initial estimates to receiving and recording payments, handling various payment scenarios, and generating customer statements. It also includes features for handling more complex situations like credit memos, petty cash, credit card fees, billable time and expenses, and adjustments via journal entries. The integration with bank feeds further streamlines the process of matching payments to invoices.

QuickBooks Online Accounts Receivable Management

Based on the video transcript and our previous discussion, Accounts Receivable (AR), as described in the context of QuickBooks Online, is the process of recognizing income when a sale is made (i.e., when a customer agrees to buy something) and managing the money owed by customers who will pay in the future. It’s a crucial aspect of business operations when payment is not received at the time of the sale.

Here are the key concepts related to Accounts Receivable as discussed in the source:

• Triggering Accounts Receivable: The AR process begins when a sale is recognized, often documented through an estimate provided to the customer. Once the customer accepts the offer, the estimate is converted into an invoice. The act of sending an invoice officially signifies that the customer owes the business money.
• Managing Outstanding Invoices: QuickBooks Online provides tools to keep track of all outstanding invoices. The Sales tab allows users to view a list of all invoices, filter them by status (e.g., unpaid), and see the total amount due. The system also tracks due dates based on the payment terms set on the invoices.
• Receiving Payments: A significant part of AR management is recording payments from customers. QuickBooks Online offers multiple ways to do this, ensuring that the payment is correctly applied to the outstanding invoice.
• Payments can be recorded as going directly to a bank account or to an interim account called Undeposited Funds (or Payments to Deposit). The latter is recommended when multiple payments are deposited together.
• QuickBooks Payments, if enabled, can automate the recording of online payments.
• Applying Payments to Invoices: When recording a payment, QuickBooks allows you to select the specific invoice(s) the payment is for, including the option for partial payments.
• Handling Overpayments/Underpayments: While not explicitly detailed, the ability to record partial payments suggests the system can handle situations where the payment doesn’t exactly match the invoice amount. Credit memos, discussed below, can address overpayments or billing errors indirectly.
• Credit Memos: When a business needs to reduce the amount a customer owes after an invoice has been issued (e.g., due to a mistake), a credit memo is created. Importantly, credit memos need to be manually applied to the relevant invoice through the receive payment screen.
• Adjusting Accounts Receivable: In more advanced scenarios, such as writing off old, uncollectible debts, journal entries can be used to directly adjust the accounts receivable balance. These adjustments then need to be applied to the corresponding invoices using the receive payment function.
• Reporting and Review: QuickBooks Online provides reports like the Accounts Receivable Aging report to help businesses understand how long invoices have been outstanding. Additionally, customer statements can be generated to show customers their outstanding balances and payment history.
• Integration with Bank Feeds: QuickBooks Online allows for the matching of bank deposits with outstanding invoices recorded in the system, streamlining the AR process by reducing the need for manual payment recording in some cases. This also includes handling bank fees associated with credit card payments.
• Billable Time and Expenses: For service-based businesses, QuickBooks allows the tracking of billable time and expenses, which are then converted into invoices, effectively managing these aspects within the AR framework.
• Delayed Charges and Credits: These features allow for the recording of services or credits that will be invoiced to the customer at a later date, ensuring that all billable activities are captured within the AR cycle.

In essence, Accounts Receivable management within QuickBooks Online, as described in the source, is a systematic approach to tracking sales made on credit, ensuring timely invoicing, diligently recording customer payments, and managing any necessary adjustments or credits to maintain accurate financial records. The various workflows and features aim to streamline this process, providing businesses with a clear overview of the money owed to them.

QuickBooks Online: Invoicing Customers

Based on the video transcript, invoicing customers is a central part of the accounts receivable workflow in QuickBooks Online. It’s the process of formally billing a customer for goods sold or services rendered, thereby establishing the amount they owe to the business.

Here’s a breakdown of how invoicing customers is discussed in the source:

• Creating an Invoice:
• An invoice can be created directly or by converting an existing estimate that has been accepted by the customer.
• To create a new invoice directly, you can click on the “New” button and then select “Invoice”.
• You can select an existing customer from a drop-down menu or add a new customer on the fly by providing their name and other details like address, phone number, and email.
• Each invoice has an invoice number, which QuickBooks automatically sequences but can be customized.
• You can set the invoice date to reflect when the service was provided or the product was delivered.
• The due date for payment can be selected based on predefined net terms (e.g., 15, 30, or 60 days from the invoice date), which QuickBooks will calculate.
• Adding Products and Services:
• On the invoice screen, you select the specific products or services being sold to the customer.
• You can specify the quantity and rate for each item.
• A description of the product or service can be added to provide clarity for the customer.
• QuickBooks Online Plus allows for the inclusion of inventory products on invoices.
• The system automatically calculates the total amount due based on the quantities and rates of the items.
• Saving and Sending Invoices:
• Once the invoice is complete, you have several options:
• “Save”: This saves the invoice within QuickBooks Online without sending it.
• “Save and Close”: This saves the invoice and closes the invoice window.
• “Review and Send” or “Save and Send”: These options allow you to email the invoice directly to the customer or print it for mailing.
• Link to Estimates:
• When an invoice is created from an estimate, QuickBooks copies over all the information from the estimate, including products, services, descriptions, and prices.
• The invoice maintains a link back to the original estimate, creating a transaction history for tracking.
• Creating Invoices Without Estimates:
• It’s important to note that creating an estimate is not a mandatory step in the invoicing process. You can create invoices directly without any prior estimate.
• Managing Invoices:
• After invoices are created, they can be found in the “Sales” tab under “Invoices”.
• You can view a list of all invoices or filter them to see only unpaid invoices, which represent the amounts in accounts receivable.
• Invoicing Billable Time and Expenses:
• QuickBooks Online (Essentials and above) allows you to track billable time and then add these time entries to a customer’s invoice.
• Similarly, in QuickBooks Online Plus, you can mark expenses as billable to a specific customer and then include these expenses on their invoice for reimbursement.
• Delayed charges and delayed credits can be used to record services or credits that will be added to a customer’s invoice at a later date. When you create an invoice for that customer, these delayed items will appear as potential additions.

In summary, the source emphasizes that invoicing is the formal step in the accounts receivable process where a business communicates to its customers the details of a sale and the amount due. QuickBooks Online offers various features to create, customize, send, and manage these invoices, ensuring that businesses can effectively track and collect the money owed to them.

QuickBooks Online: Receiving Customer Payments

Based on the video transcript, receiving payments is a crucial step in the accounts receivable workflow in QuickBooks Online. The source outlines several ways to record customer payments and important considerations during this process.

Here’s a detailed discussion of receiving payments as described in the source:

• Multiple Ways to Initiate Receiving a Payment:
• You can click the “New” button and then select “Receive Payment” under the “Invoice” section. This opens a blank “Receive Payment” screen where you need to select the customer.
• You can go to the “Sales” tab, then “Invoices”, and click the “Receive Payment” button located next to the specific invoice you want to record a payment for. This method automatically populates the customer and the invoice details.
• While viewing an invoice, you can click the “Actions” button and then select “Receive Payment”. This also automatically selects the customer and the invoice.
• From the “Customers” list (under the “Sales” tab), you can select a customer, find the specific invoice, and choose “Receive Payment” from the available options.
• Recording Payment Details on the “Receive Payment” Screen:
• You need to select the customer who made the payment. QuickBooks will then display all outstanding invoices for that customer.
• Enter the date on which you received the payment.
• Choose the payment method from a pre-built list or create your own (e.g., check, cash, credit card). This is primarily for internal tracking.
• If the payment was made by check, you can record the customer’s check number.
• Handling Full and Partial Payments:
• In the “Amount Received” field, you can enter the total amount the customer paid.
• If the customer made a partial payment, you enter the partial amount and then select the invoice(s) you want to apply the payment to, specifying the amount for each if necessary.
• If the customer paid the full amount, ensure that the amount entered matches the total due on the selected invoice(s).
• The Importance of the “Deposit To” Account:
• Before saving the payment, you need to decide where the funds are initially recorded.
• Directly to a Bank Account: If you deposit the payment directly into your bank account as a single transaction, you can select your bank account in the “Deposit To” field.
• Undeposited Funds (or Payments to Deposit): If you receive multiple payments that will be deposited together as a lump sum, you should select “Undeposited Funds” (or “Payments to Deposit”) as the “Deposit To” account. This is a temporary holding account. Using this method helps ensure that your QuickBooks records match your bank statements when you make the actual deposit. To record the deposit of these funds into your bank account, you’ll later use the “Bank Deposit” function under the “New” button.
• QuickBooks Payments: If you have QuickBooks Payments enabled, the system can automatically record payments received online or through credit card charges processed within QuickBooks.
• Applying Payments to Invoices: When you select a customer on the “Receive Payment” screen, QuickBooks will list their outstanding invoices. You need to check the box next to the invoice(s) being paid. The amount of the payment will be automatically applied to the selected invoices, but you can adjust these amounts if it’s a partial payment.
• Receiving Cash Payments and Using a Petty Cash Account: If you receive a cash payment that is not immediately deposited into the bank, you can create a “Petty Cash” account (or another similar account) and select that as the “Deposit To” account. Funds in this account can later be transferred to the bank or used for business expenses (although managing petty cash involves a separate workflow).
• Handling Credit Card Payments and Bank Fees:
• When a customer pays with a credit card, you might receive a net amount in your bank account after the bank deducts a transaction fee.
• The source recommends recording the full payment amount as received (and potentially depositing it to “Undeposited Funds”).
• The bank fee is then recorded as a separate transaction during the “Bank Deposit” process. When making the bank deposit for the credit card payment, you’ll enter the actual amount received from the bank and then add a negative line item for the merchant fees (or transaction fees), specifying the appropriate expense account (e.g., “Merchant Account Fees”) and optionally the vendor (e.g., Stripe).
• Matching Bank Feed Transactions: QuickBooks allows you to connect to your bank accounts and use the bank feed to match downloaded transactions with entries in QuickBooks.
• If a deposit in the bank feed corresponds to one or more invoices, you can use the “Find Match” option to select the relevant invoices instead of categorizing the deposit.
• When the total of the matched invoices doesn’t equal the bank deposit amount (due to fees), you can use the “Resolve the Difference” option to add a line for the fee, similar to the bank deposit process for credit card payments.
• Applying Credit Memos: Even though you’re not receiving a cash payment, you use the “Receive Payment” screen to apply a credit memo to an outstanding invoice. By selecting the customer and ensuring both the invoice and the credit memo are checked, QuickBooks will match them, reducing the outstanding balance.
• Applying Journal Entries: Similarly, to clear an old outstanding balance using a journal entry (which directly reduces the accounts receivable balance), you use the “Receive Payment” screen. Select the customer, and with both the old invoice and the journal entry checked, QuickBooks will apply the journal entry, resulting in a zero amount received but effectively closing the invoice.
• Saving the Payment: Once all the necessary information is entered and the payment is correctly applied, click “Save and Close” or “Save and New” to record the payment.

The source emphasizes the importance of choosing the correct “Deposit To” account to ensure accurate bank reconciliation. It also highlights that while there are multiple workflows to initiate receiving a payment, they all lead to the same “Receive Payment” screen for recording the details.

QuickBooks Online: Recording Bank Deposits

Based on the video transcript, bank deposits are a critical part of the accounts receivable workflow in QuickBooks Online, representing the final step where customer payments are recorded as entering your bank account. The source details several scenarios and methods for handling bank deposits.

Here’s a breakdown of how bank deposits are discussed:

• Depositing Payments Directly to the Bank Account:
• If you receive a single payment and deposit it directly into your bank account as one transaction, you can select your bank account in the “Deposit To” field on the “Receive Payment” screen. In this scenario, the payment record in QuickBooks directly reflects the deposit in your bank.
• Using Undeposited Funds for Later Deposits:
• The source strongly recommends using the “Undeposited Funds” (or sometimes “Payments to Deposit”) account when you receive multiple customer payments that will be deposited together as a single lump sum at the bank. This is a temporary holding account.
• The rationale is to ensure that your QuickBooks records accurately match your bank statements. When you look at your bank statement, you’ll see one total deposit, and recording individual payments directly to the bank would not reflect this consolidated deposit.
• Recording the Actual Bank Deposit from Undeposited Funds:
• To record the consolidated deposit in QuickBooks after using “Undeposited Funds,” you click on the “New” button and then select “Bank Deposit” under the “Other” section.
• The “Bank Deposit” screen will display all the payments you have previously recorded into the “Undeposited Funds” account.
• You then select the individual payments that were included in the actual bank deposit. QuickBooks will show the total amount of the selected payments.
• You need to enter the date of the actual deposit into your bank account and choose the bank account where the funds were deposited.
• Finally, you click “Save and Close” to record the bank deposit. This process moves the money from the temporary “Undeposited Funds” account to your designated bank account in QuickBooks, matching your bank records.
• Handling Credit Card Payments and Bank Fees During Deposit:
• When you receive credit card payments, the funds deposited into your bank account might be less than the total amount charged to customers due to bank transaction fees.
• The suggested workflow is to initially record the full credit card payment as received (potentially to “Undeposited Funds”).
• When you go to record the “Bank Deposit” for these credit card payments, you will enter the actual net amount that was deposited by the bank.
• To account for the difference (the bank fee), you add a negative line item on the “Bank Deposit” screen.
• For this negative entry, you need to select the appropriate expense account for merchant fees or transaction fees (e.g., “Merchant Account Fees”). You can optionally specify the bank or payment processor (e.g., Stripe) as the payee (entered as a vendor).
• The negative amount of the fee will reduce the total deposit amount in QuickBooks to match the actual amount deposited in the bank.
• Matching Bank Feed Transactions to Invoices (Skipping Manual Deposit Recording):
• QuickBooks Online allows you to connect to your bank account and use the bank feed to download transactions.
• If a deposit appears in the bank feed that corresponds to one or more customer payments (and you haven’t manually recorded the “Receive Payment” and “Bank Deposit” steps), you can use the “Find Match” option.
• This allows you to select the open invoices that the deposit is intended to pay. By matching the deposit to the invoices, you effectively record the payment and the deposit simultaneously.
• If a bank feed deposit for credit card payments is for a lesser amount than the total of the matched invoices, you can use the “Resolve the Difference” feature to add a negative entry for the merchant fees, similar to the manual bank deposit process.
• Transferring Funds from Other Accounts to the Bank:
• The source briefly mentions transferring funds into the bank from other accounts, such as a petty cash account. This is done using the “Transfer” function under the “New” button, specifying the source account (e.g., Petty Cash) and the destination bank account, along with the amount and date of the transfer.

In summary, the video highlights that accurately recording bank deposits is essential for maintaining correct financial records in QuickBooks Online and for successful bank reconciliation. It emphasizes the importance of using “Undeposited Funds” for batched payments and correctly accounting for bank fees associated with credit card transactions, either through the manual “Bank Deposit” function or by utilizing the “Find Match” and “Resolve the Difference” features within the bank feed.

The Original Text

in this video we’re going to talk about how to recognize income in QuickBooks Online using the accounts receivable workflow accounts receivable simply means that you’re going to recognize a sale whenever the customer agrees to buy something from the business and then possibly you will get a payment on that in the future if you were recognizing a sale at the same time that you’re getting paid then there would be no need for you to use the accounts receivable workflow and you want to check out another video that I have focused on recognizing income or recording income in QuickBooks by skipping everything we’re going to talk about in this video so check that video out the link should be on description we’re going to get started in QuickBooks online and we’re going to start with sort of the pre-sale cycle so a customer calls you and says hey I want to buy something from you a product or a service and the first thing you’re going to do is you’re going to give them an estimate essentially you’ll recognize that uh you’re going to make them an offer and then the customer will at some point email you back or call you back and say I’m ready to accept the offer let’s move forward and then we turn that into an invoice later on so let’s start by creating an estimate I’m just going to click on the drop- down menu select the customer I want to send the estimate to I could click on add new and create the customer on the fly so if I have a new customer and her name is Mary S Smith and I can add her address her phone number email all that information and then I click on Save and then that customer gets loaded into my database in QuickBooks you can have a build to address and also a ship to address so if you’re shipping products or delivering services on site you can use that shipping address to identify that then the estimate number is going to follow a natural sequence QuickBooks will start when one01 but you can create your own sequence if you want to when you’re first getting started so I’m going to do 4,000 501 and that would be the first one then every time I do an estimate then the next one will follow soon then I’m going to click on the drop- down menu to confirm the estimate date and then we’re going to scroll down onto products and services and then we pick the specific product and service that we are estimating or quoting this customer I’m going to pick Services here and I’m going to do two two quantity2 $75 and then on the description I’m going to put $75 per hour for support okay whatever service you’re providing you just put there the description of what you’re what you’re want to sell that customer you can add any additional notes any additional lines if you want to if you’re working with QuickBooks Online plus you can even add inventory that you’re selling them you can actually sell inventory products and then at the end simply we have an estimate for $150 I’m going to go ahead and click on Save and now the estimate has been saved into the system now by default estimates start in pending status so hopefully your customer will say yes agree to buying this service from you and essentially the best thing to do is to switch the estimate from pending down to accepted now notice that when it gets converted from pending to accepted a link to convert to invoice shows immediately essentially guiding you to the process that you should at this point invoice your client so they can pay you so I’m going to click on convert to invoice and then QuickBooks will take the same estimate that we just created and essentially create the invoice for you copy over all the information like the products and the services that you’re selling including descriptions prices all that stuff you actually allowed to change uh an invoice after the estimate so let’s say this actually took three hours and at two hours you can make that change now you do have a um a connected transaction next to it you see that is highlighted green letting you know that that’s a link transaction and if I screw up to the top it says link transactions as well I can actually click on that and it’ll open the estimate for me so it creates this history so you know exactly that this invoice came from an estimate originally then we can accept uh the invoice number where it is we can change the invoice date to whenever you actually provided that service or deliver that product you can select the due date uh based on your net terms so if it’s you know 15 days QuickBooks will calculate 15 days from the invoice date if you select 30 or 60 it will calculate the due date from that invoice date and that’s the essence of account receivable management which is you’re generating a bunch of invoices and you’re keeping track of the customers that owe you money and eventually they need to pay you so once we’re done we can either click save or we can click on review and send if you want to actually email the invoice to our customer so we’re going to go ahead and send the invoice to a customer or print it and mail it to them and that’s it now that customer officially owes us money now I want to create an invoice without regard of the estimate so you can see that that workflow flow you actually don’t need to create the estimate prior that was just an example for those that need to do that so I’m going to click on the new button on the top left and then click on invoice and that can take me straight into the invoice screen no linkages or workflow from an estimate if I click on the drop down menu I can pick a customer from the existing list or maybe a different customer let me pick customer a and then I’m going to scroll down and then select the products and services that I want to sell that customer so let’s say I want to sell this customer customer services I’m going to put um hourly support and I’m going to put here level two Tech and let’s say that we have for our level two technician we actually charge uh $100 an hour so I’m going to put here three hours for $100 an hour and you see that the total adds up to 300 now if I also have uh maybe a product that I’m selling them where there’s inventory or not you can add that additional line and we can put here miscellaneous cables and let’s say say this is a charge for $25 now if you have sales tax enabled and I have an entirely different video that focuses on sales tax I’ll put the link in the description whichever item you mark As taxable QuickBooks will calculate tax for that item I’m going to go ahead and uncheck both the items because we’re going to make the assumption that these items are not taxable or the sale is not taxable here at the right hand side you have some information about billable time we’re actually going to go back to that so now we have a total down here of $325 for the invoice again we can save it we can do save and close or we can save and send to our customers let me click on Save and close and now we have officially created uh two invoices now once you create your invoices you can actually go into the sales tab on the left hand side and then click on where it says invoices and then you’re going to get a list of all the invoices that you have in the system you can actually filter by all invoices including every invoice you ever created and you’ve been paid for already or just invoices are unpaid which are the ones that are currently in accounts receivable you see up here that there’s a $550 due it says not yet that means they’re not overdue yet and if you see down here in the bottom you get to see both amounts 225 and 325 we just created notice that there’s a status here in terms of due date based on what terms we use to create those invoices so that’s that was the first step just essentially just creating an invoice the Second Step would be to receive payments so there’s a couple of ways to receive payments we can simply go into the new button on the left hand side and then under invoice there is a button that says receive payment we can start the process from there if we start the process from there we’re going to go into a blank receive payment screen and then I have to click from the drop- down menu which customer paid me so I’m going to go ahead and select Mary Smith and then once I select the customer QuickBooks will show show me all the outstanding invoices are for this specific customer I’m going to pick the date in which the customer the date that I actually received the payment the payment method and there’s a pre-built set of payment methods you can create your own this is just for internal tracking so let’s say I’m going to put check and note if you have payments enabled in QuickBooks Online which is an additional service you can actually get a credit card number from your customer and charge it electronically through here or you can send the invoice to the customer they can pay you and if you use that service the payment gets automatically recorded in your behalf so you actually don’t have to go into this extra step and record the payment because QuickBooks is smart enough to know that if the customer paid you through their system they might as well create the payment for you now when you receive the payment and let’s say for example it’s a check I can put here the check number that the customer gave me so their check number I can put in here and there where it says amount received I can either select a part partial amount so if your customer underpay you you can put let’s say if they only pay you $100 you receive a partial amount and then you select the invoice that you want to apply the $100 to and then you select um the amount that you’re going to apply to that specific invoice if the customer pay you in full just type there the full amount and the full amount here in the top should um calculate for you as well so make sure that if they did pay you in full that you have both the full amount in the top and then the full amount up apply to the specific invoice you want to apply to now before we click save and close and accept this payment it’s really important to make the decision and this this is based on what’s happening with your business on whether or not this specific payment is going to go straight into the bank one to one so you’re going to have one payment and you’re going to make one deposit with a single payment or if you often receive multiple payments through the week and maybe once or twice a week you take a bunch of payments and make one single deposit now maybe you do electronic deposits with your with with your phone or with a scanner but essentially if you lump all the deposits together uh into a single deposit and then when you look at the bank statement you don’t see each individual payment you see one lump sum deposit then what you want to use instead of using the bank account as a deposit to account you want to use this account called undeposited funds so I’m going to do an example of that for now I’m just going to put it here in this Chase payroll account and we’re just going to have that to 25 bucks itself go in there and then when we do the other example it’s going to make sense when we show you that and then I click on Save and close and then essentially that completes the account’s receivable workflow when we go from in this case from estimate to invoice and then for to payment straight into the bank now let’s create one more invoice I’m going to go to new invoice and then I’m going to select a different customer click on the drop down menu and click customer B I’m going to select my services item and then put here here 5 hours at $75 an hour and we’ll put here hourly support again and then we’ll click on Save and close so now we have uh two outstanding invoices as if we go back into this screen here I’m going to refresh the all invoices screen now we have two outstanding invoices the one for customer a and one for customer B and I’m going to receive payments for each of these invoices but now I’m going to use this on dep positive funds account because I’m actually going to make one sum deposit for the whole 700 and I want that to match my bank whenever I go reconcile my bank so I’m going to receive the payments uh for these invoices but instead of going into new receive payment I’m going to use a different technique which is I’m going to open the invoice directly and then while I’m looking at the invoice on the screen I’m actually going to click on receive payment so I’m going to click on the actions button and then click on receive payment when I do that the payment screen opens but then one more step happens in your behalf which is it automatically selects the customer for you so you don’t have to go out there and select the customer again and it also automatically applies the invoice for you implying that this is exactly what you’re trying to do because you open the invoice in the first place and then clicked on receive payment so it just saves you a step because contextually that’s what you were trying to do now because I’m going to lump suum this deposit together with a different payment I don’t want to put this deposit in the bank on this screen I want to put it in this account called undeposited funds sometimes that’s called payments to deposit depending on how your QuickBooks file is set up but on depositor funds or payments to deposit should be a current asset account designed to hold your customer payments until you make the deposit we’re going to show you what that workflow looks like so let’s say they paid me with a check and we’ll put here the check number from the customer and then we’ll click on Save and close now I’m going to show you one more different workflow for receiving that payment I’m going to go into sales and click on all invoices and then notice that next to the invoice there’s a button that says receive payment so you can basically click on that and it will take you into the receive payment screen but I’m going to show you one more workflow I’m going to ex out of that going to uh sales and then under customers and let’s say I’m looking at the specific customer in the customer details window and then I’m looking looking at the specific invoice and then from here I can actually click on receive payment with within the options that it gives you notice it gives you tons of options but receive payment is one of the options so we’re going to go ahead and click on that so whichever way you decide to do it it’s going to end end you up at the exact same screen on the received payment screen then I’m going to select check let’s say this customer also pay me with a check and then we also have to make the decision to put this either on the bank account or in the undeposited funds or pay P to deposit account because again we want to choose this option that way we can do one more transaction which is Lum suum those payments together so I’m going to go ahead and click on Save and close and now I have both of those payments received and they’re sitting there in undeposited funds waiting for me to make or record that deposit so the next step to record the deposit is to click on new and then we’re going to go here where it says other we’re going to click on bank deposit once we click on bank deposit it you will notice that QuickBooks actually keeps track of every single payment you have received that you put into this account called on deposited funds essentially what you see here which is this group of transactions that are sitting here under the select the payments included in this deposit these are your undeposited funds and essentially you click on one then the other you see how it adds up to $700 here on the top right and essentially you’re going to say okay I got both of those payments on Monday but I didn’t make it into the bank until maybe Wednesday the 7th that’s the day that both of these Depo payments are going to be deposited into a single deposit and then we select the bank account that we’re going to deposit it into and then we click on Save and close so that’s how you do that workflow where you receive the payments into undeposited funds and deposit them together okay we’re going to talk about a little bit of more advanced technique which is working with credit memos so I’m going to go into the new button and create another invoice I’m going to click on new invoice and then I’ll select my customer we’ll select customer a one more time and then we’ll select any product or service and we’ll put we’ll put an amount here we’ll just put 1,000 now I’m going to backdate this invoice a couple of months ago we’ll put this back in December of 2023 and then we’ll click on Save and close and now there’s a $1,000 invoice outstanding now I’m going to click on sales and invoices and then click on unpaid so we can see the totality of our open invoices notice that this invoice is overdue $1,000 because it’s way past the payment deadline now let’s say that during this process I don’t want to edit or change an invoice from the prior year but I want to recognize that we maybe made a mistake on the job and we’re going to give this customer a $300 credit for example so instead of going back and editing the invoice which is generally not suggested especially when it’s from previous periods what you want to do is you want to recognize a reduction of that account’s receivable a reduction of the money the customer owes you by creating a credit memo so we’re going to click on the new button and then click on credit memo and then we’re going to select the customer that we’re giving the credit memo to click on the drop down menu and click on customer a then we’re going to select which product or service essentially we are refunding them it’s not really a refund because we’re not giving them cash we’re just adjusting their uh their open invoice but it’s technically a refund from a sales perspective because we had a sale in 2023 but now we’re refunding it in 2024 so it’s technically a an income refund but there’s no cash being exchanged we’re just going to receive the balance of the payment when the customer gets to gets to pay us so we’re going to select the product or service that we’re adjusting we’ll put here $300 and we can put uh recognizing our mistake for late delivery or something like that okay now depending on exactly whatever the circumstances are you want to make sure that that memo and that description it’s uh is well understood by any user in QuickBooks so we’ll go ahead and click on Save and close and now the credit memo is um entered automatically now this invoice if I open this invoice it still shows as it having an outstanding $11,000 and the reason for that is because credit memos don’t always automatic Ally apply to the invoice you actually have to take the credit memo and apply to the invoice by using the payments screen so I’m going to go into new and click on receive payment even though I’m actually not receiving a cash payment all I’m doing is I’m going to match that credit memo to that invoice so I’m going to select customer a and then I’m just going to make sure that this credit memo is checked so a quick books starts the process for you notice that you put a check mark on it and as long as you see that credit memo check box they’re being applied to the invoice and then here where it says amount received is nothing because essentially you’re not actually receiving the payment QuickBooks will through this transaction as long as you save it now match that credit memo to the invoice now you could put in the in the memo down here at the bottom you can put applying uh credit memo or something like that you really don’t need to do it it should be pretty self-explanatory but that’s essentially what this does it takes that that credit memo that was was sitting by itself unapplied and applies it to the invoice so then when I click on Save and close now I go back into this screen I can click on refresh and now this invoice should show up as an open balance of 700 uh no longer an open balance of uh 1,000 so I just click on the invoice and notice here that says balance du 700 Now by default in this screen it shows you the original amount of the invoice if I actually click on this little gear button on the right hand site where it says action I can actually click on the little checkbox for balance and I can actually see both the $1,000 that are from the original invoice amount and the actual open balance from the invoice it gives you a little bit better visual so let’s say that now the customer is ready to pay you and they’re going to pay you the $700 so I’m going to click on new receive payment and I’m going to add one more wrench into this whole thing just to give you a new example is I’m going to go ahead and select the customer but this time around my C your customer is paying you in cash but the cash is not even being deposited so I’m going to instead of putting it on deposited funds I’m actually going to put it into something called a petty cash account so I’m going to go into add new and then I’m going to create an account called petty cash click on Save and close and then I’m recognizing that I received $700 in cash to pay off the invoice but the money is not even going into the bank I’m going to put it in the petty cash and I as the invoice is being applied here you have it going into petty cash then you click on Save and close so perfect you have no more invoice open if I refresh on the screen it should show that we have zero amount due for invoices now once it comes time to put the cash from the petty cash account into the bank you can simply just do a transfer so we’re going to go to the new button and then click on transfer and let’s say that you know something happened with that cash it was maybe used for some business purpose purposes and I’ll do an entirely different video about managing petty cash cuz that’s a whole another world but let’s say that the the cash that was in the petty cash account that ended up uh that came from the customer but ended up making it into the bank was maybe $500 and not $200 then you end up doing the transfer here you can put in the memo saying you know uh customer a payment and then put uh $200 where used for gas or something like that but you actually need to go back into that Payday Cash account and record those expenses again that’s an entirely different video entirely different workflow but I think it is important to understand that sometimes you will get payments are in cash now I’m going to show you one more interesting workflow which is when you receive payment with a credit card and then when you deposit money into the bank you actually don’t get the entire invoice amount in the bank the bank actually charges you a transaction fee for being able to use a credit card to receive the money so I’m going to go to the new button and create a new invoice I’ll select one of these customers again pick a product or service I’m going to choose $1,000 one more time and then I’m going to click on Save and close and let’s say now that the money for that in customer payment came into the bank it actually came in for $971 31 right because the bank took a percent as a fee so we’re going to go into new receive payment we’re actually going to receive the payment uh as a whole so we’re not going to record in the receive payment screen the fee and we’re going to select here a credit card let’s say American Express deposit to we are going to send it on deposited funds just like when you get a bunch of checks and deposit them together same thing happens with credit cards where a multiple people pay you with a credit card and essentially the whole amount settles with the fee so we’ll go ahead and click on Save and close so now that payment is sitting in on deposited funds and you can have maybe multiple invoices with payments in undeposited funds and you’re going to do one more step which is going to go into new bank deposit and then we’re going to select the the the the payment but you’re not going to receive $1,000 you’re going to receive 97131 as I mentioned earlier so that difference is a fee so if I take $11,000 minus 97131 I get a amount of 28.6 and that’s the amount that the bank took from you to be able to receive uh a payment through a credit card now that’s going to be a negative amount so that’s a really important piece because once you put that into negative you notice in the top the total is 97131 now the most important thing is to put the account that this belongs to so normally it would be an account called Merchant fees or transaction fees or something like that uh in my particular chart of accounts is called merchant account fees so as long as you have an account called again Merchant fees credit card fees transaction fees stripe fees PayPal fees uh whatever account you create that’s represents that you put that in there now on the receive from you actually don’t need to put anything here if you want to you can put the actual bank’s name the bank that is taking the money away so let’s say this is a stripe or something like that we can actually create stripe uh in there as a vendor I typically like to do that as a vendor not a customer and that way you know okay that’s a fee that we’re paying to stripe so it becomes uh very clear so that’s up to you you actually don’t need to put U the receipt from vendor’s name there I know it’s a little confusing because you’re not really receiving anything they’re actually taking money away which is why is a negative amount so it’s like a negative receiving right it means that they’re taking away but essentially that illustrates it you can have multiple invoice payments in here that are going to be paid in full because the customer from their side they’re paying you 100% essentially the bank is the one that’s taking a fee at the very end which is why you’re receiving a lesser amount at the end so that little piece here that’s really important some people actually will break it up so if you have like three payments they’ll go inad and break up for the first invoice it was this amount for second invoice is this amount for third invoice is this amount if you want to keep that level of detail normally I just add all the fees for that one deposit and put it in there so we’ll click on Save and close and that completes that process now we’re going to shift gears to a slightly different workflow which is when you uh create re invoices and you manage accounts receivable but when you go record the deposits you actually don’t use the new record deposit screen you actually use the bank feed screen so I’m going to go into transactions and go into bank transactions and let’s say for example that you’re going to want to match your uh transactions from whatever you’re seeing in the bank feed screen so for example we see a teller deposit for $5,000 and then we see a stripe deposit for $96.89 so I’m going to recreate the type of transactions that you would basically match into your bank feed so I’m going to start with a couple of uh invoices that add up to the 5,000 so I’m going to go to new go to invoice go to customer a and then quickly create an invoice let’s say for $2,000 and then I’m going to click on uh save and new and I’ll create the other invoice that adds up to $3,000 so let’s go in here and we’ll make this one $33,000 and then we’ll do save and new again so now we have a $5,000 deposit that’s coming in through the bank feed and now we need to match the two invoices that add up to the5 ,000 so I’m going to click on the 5,000 transaction that’s in there and instead of selecting categorize I’m going to click on where it says find match then when I click on find match I’m going to get a list of all my open invoices and all the payments that I have received and then QuickBooks will attempt to try to match the two invoices for you now if QuickBooks doesn’t match them you can manually go and select the combination of invoices that would match that deposit and of course you need to verify with your records if that’s actually the customers are paying you not just because the dollar amounts match you have to make sure it’s the correct one because if you end up telling the wrong customer that they owe you money when they actually did pay you because you confused a different customer’s invoice that had the same dollar amount that’s going to be pretty embarrassing but that it’s a pretty simple workflow you just selected to invoices that match that amount and you click on Save and essentially you didn’t have to click on receive payment and you didn’t have to click on record deposit because the money was already downloaded as a transaction through the bank feed you can simply just match at that payment with outstanding invoices I’m going to do the exact same thing with this 9689 but instead I’m going to create two transactions that add up to $100 and I show you how to record the fee with uh within the bank feed so I’m going to go to new and go to invoice and then let’s say we have an invoice for customer a in this case for $60 and then we’ll do save a new and do an invoice for customer B now for $40 and the addition of those two should add up to 100 so it should be pretty simple and then we can save and close perfect now going back into the bank feed there’s my $96.89 I’m going to click on that I’m not going to click on ADD and I’m not going to click on categorize I’m actually going to click on where it says find match we’ll click on find match we’ll select the two invoices that add up to $100 now you will notice that QuickBooks automatically assumes that one of the invoices is being short paid so you have to be very careful about this particular step here you actually have to click on that amount and put 40 and then once I click tab to recalculate QuickBook is actually telling you there’s a difference for $311 so now you have to do what’s called resolve the difference which means add the fee so we’re going to click on resolve the difference and additional line adds in the bottom we’re going to come down here and put – 3.11 and essentially it gives you now a difference of zero and then under category this is where we’re going to put that merchant account fees account or whatever is called in your chart of accounts we’re going to select that and then the pay in this case is stripe or whatever that’s optional and then we click on save so essentially you want to make sure that the the all the invoices are being marked as 100% paid and then that the difference it’s a negative amount which is your credit card fee that you click on Save and then essentially you finish that workflow completely I’m going to show you one more workflow which is to take your billable time billable expenses and convert them into an invoice so I’m going to click on the gear menu and click on subscriptions and billing because I’m currently in The Simple Start version of QuickBooks Online which doesn’t support this specific feature I actually need to be at least on I need to be at least on Essentials and above to be able to do this piece so I’m going to click on change plans so let’s start by going into the new button and then clicking on single time activity so I’m going to create a time sheet item or enter a time activity that I want to Mark billable to the customer so I’m going to select my employee or my contractor that I’m using their time to then create into into a billable invoice I’m going to select let’s say salary item and then under customer I’ll pick customer B and then under service I’ll put here services and then I’ll put here that they worked let’s say 8 hours and 45 minutes and then on the description I can put a support on their issue or something like that you can also click on start start and end times so if you want to put put the times that they actually worked and then have QuickBooks calculate the hours based on that you can you can do that as well so that’s really up to you and how you want to do it and then on under here where it says billable here you put the rate that you want to invoice your client for so in here it tells you hey that was 2 hours and 15 minutes and based on that you’re going to be able to invoice your customer $918 with. 75 keep in mind that this doesn’t automatically invoice your customer it just keeps it pending for you to be able to invoice them later in the future when it’s time to invoice them so I’m going to click on Save and close and then I’m going to go create an invoice for this customer B so I’m going to go to new invoice I’m going to select customer B from the drop- down menu I notice that immediately on the right hand side there’s a drawer that tells me all of the potential transactions I can add to the invoice based on previous billable time so I’m going to click on ADD and essentially once I click on ADD automatically that billable time translates over to the invoice including the description the quantity and the rate so I don’t have to enter it again so that’s how you take billable time and add it to the invoices now notice that there’s a little uh link button here that says linked to a billable time because if you click on that you can actually see the time entry uh by itself so that’s what that’s for so you can actually inspect the transaction or even edit the transaction by itself so let’s go back into the invoice here and then we’re going to click on Save and close now I’m going to show you a really neat feature that you can only have in QuickBooks Online Essentials or up which is called delayed charges or delayed credits so I’m going to start by clicking on the new button and then I’m going to click on a delayed charge so a delay charge is when you want to sort of remind yourself to invoice that customer maybe at the end of the month for a particular service that you provided but you don’t want to create invoice just yet so let’s say for example back in February 1st for customer a we did some work so I’m going to put here under Services I’m going to put 2 hours for $75 an hour and that happened back in February 1st so I’m going to click on save a new and let’s say the next day on February 2nd we did more work for that customer B and we did uh Services let’s say this time around we did 3 hours and 40 3.45 hours at $75 an hour and then we’re going to click on Save and new and let’s say then on Monday the 5th we did some more work for this customer B and we did let’s say only 75 hours uh times $75 an hour and again the purpose of this is that you’re not creating an invoice each time you’re just entering a record in the system that you want to invoice this customer eventually for all of this work okay then I’m going to click on Save and close then let’s say I realize that I’ve overcharged them an hour for whatever reason I can go into to new and do a delayed credit which would be like the opposite of a charge and then I come back into customer B and let’s say I recognize that on the six and I can put uh uh recognizing we overcharged one hour for whatever reason right so we’re going to put quantity one 75 we don’t need to put a negative or anything like that I mean the but by default uh QuickBooks understands that we uh that we’re doing that then we’re going to go ahead and click on save and close and we’re done so now let’s say it’s the end of the month and we want to invoice our customer for all those charges and even the credits against those charges we’re going to go into the new button that we’re going to click on invoice then we’re going to select our customer customer B and then we’re going to notice on the right hand side that we see both the delayed credits delayed charges and also maybe some additional billable time that we did in another exercise so I can click on the filter button and say you know what only show me delayed charges okay and then I click on apply filter and then I can inspect each of these by clicking on the little link if I want to and I can click on ADD and then add and then basically you add each of the lines from the previously entered delay charges I can ex out this filter and then maybe only show the credits and then click on apply filter and then click on ADD and then in this case we didn’t put a negative on the credit transaction itself but quick books enters this one as a negative because that’s what a delayed credit is so then at the end of the day the math is the customer now also $24 and let’s say this happened right at the end of the month February 29th and then we click on save save and close save and send and then we’re done using our delayed credit and delayed charges now I going show you one more thing which is a billable expense I’m going to click on the gear menu and click on subscriptions and Billings and I’m going to upgrade to now the plus Edition I need to be at least in plus to be able to do this specific part which is the uh billable expenses so with QuickBooks Online plus you’re able to assign an expense to a specific customer so then when we Mark that expense billable uh you’ll be able to create an invoice with that specific line item so for example I’m going to go to new and click on expense and let’s say I went to H FedEx so we’ll put here FedEx I’ll create a new vendor and we Shi some documents for a customer that we weren’t supposed to pay for we did it for them anyway but we’re going to ask them to pay us back so under category I’m going to put here uh shipping or something like that if I have any sort of uh shipping account then on the description we’re going to put here overnighted uh documents as per customer let’s say we paid $27.96 and then here’s the key we’re going to click under the check boox that says billable basically uh reminding us that we have to invoice our customer for that and then most importantly we have to select our customer in here so we’re going to select our customer Mary Smith and essentially we’re going to put uh zero markup now you can actually mark up your billable expenses and make some profit in the process but if you don’t intend to market up or make additional income from that all you really need to know do is leave the mark up at zero then we’re going to click on Save and close and then when we go invoice our customer I’m going to click on the new button and then invoice I’m going to select from the drop- down menu go back to my new customer Mary Smith and then down here in the in the right we’re going to see billable expense we click on ADD and as we scroll down we see that the specific text that we had on the description comes in the amount comes in on the drop down menu you’re going to see that bank and that’s kind of on purpose is because this is actually reversing an expense and there’s no product or Services tied to that so this will be the only situation in which you will see uh nothing selected under products and services because this is in fact a billable expense and then that’s it then you you can maybe add some additional services to this if you want to let’s say I’m going to also charge them $75 for like going to FedEx and shipping the document or whatever um you you can add additional services on top of the billable expenses that you’re getting reimbursed for and then you click on Save and close and that finishes that workflow I’m going show you one more thing which is using a journal entry to adjust like an old accounts receivable sort of just to clean up your old accounts receivable now this is more of an advanced technique and maybe only an accounting professional that understands debits credits and what a journal entry is quite frankly are the ones that should be doing this but I’m goingon to show show you regardless because it is part of account receivable Management in one way shape or form so I’m going to go into reports and I’m going to look for the accounts receivable um aging report I’m going to go into accounts receivable aging and then I’m going to notice that I have maybe an old customer here with a $5,000 balance that’s really really old and I want to just make an adjustment and get rid of that $5,000 balance or maybe I want to get rid of half of it or whatever it happens to be so I want to use a journal entry to adjust that balance so the way that will work is we go in the new button then we click on journal entry and as I mentioned again this is more of an advanced technique I’m going to go in the first account and click accounts receivable and accounts receivable is going to be reduced by $5,000 which will be a credit and again this is more of a something accountants would do and then we can put uh writing off old balance or something like that so we come in here and put our our comment writing off all balance and under name we’re going to put our customer’s name we’re going to find our customer here called Old customer and then generally when you write off the old balance you’re going to go against a sales account and income account or if you have something called returns or refunds or something like that you can also do like a income refunds account or sometimes there will be an account called Bat debt or something like that so that that could also be the account so depends how your account is set up it could be a sales account a refunds account a returns account or or a bad debt account those are typically the accounts that we use to write off all balances so we use a journal entry we use the power of debits and credits and double entry accounting to reduce our accounts receivable and at the same time to uh record the expense or the reduction of income which is to reduce um an open invoice so then we click on Save and close and that essentially writes off the balance notice that now old customer has a net balance of zero but now I need to apply that journal entry into that old invoice simply by clicking on the new button and then clicking on uh receive payment it’s a little bit counterintuitive cuz you really never got paid for that but we’re going to use receive payment then we’re going to select our old customer here and then as long as again our invoice is checked and our journal entry is checked and notice this is like an old invoice from 2022 as long as those two things are checked and at the end the amount received is zero so there’s actually no new money coming into the bank we click on Save and close and that will apply that uh journal entry to adjust your account receivable make the open invoice disappear and you essentially will be done with that the very last thing I’ll show you is uh how to create a customer statement that shows you the history of all the invoices and payments you ever had for that specific customer so I’m going to click on the new button then I’m going to go into statement it’s under other so interesting enough it’s not under customer is under other I’m going to go to statement and then I’m going to select which customer I want to see uh sort of a history of statement for so I’m going to select which is the one that I want to uh select then I’m going to click on print or preview that way I get to see the history and then QuickBooks will show me all of the transactions that are open that essentially add up to the $918 so you get to see all the positives and all the negatives that carry over a balance to eventually show you what the ending balance for that customer is if I excit that and I go from instead of clicking on balance forward I click on transaction statement and then click on apply and then I’m going to just select customer B and click on print preview you’re going to see that the statement looks slightly different so depending on what type of statement you want to see you’re going to have a transaction statement statement you’re going to have an open item statement or you’re going to have a balance forward statement and you want to play with each one of these to see which is the one that makes the most sense to you and the one that your customer will understand probably the best you want to uh go through and try all the different type of statements that you have before you make a decision in terms of what’s the actual statement that you want to send to your clients so anyway I hope you enjoy this video on the accounts receivable workflow and how to record income using these workflows make sure you check the description below there’s tons of other videos that talk about other things accounts payable workflow deeper into bank feeds deeper into reports and how to record income without accounts receivable there’s a separate video that explains that in there which skips invoices skips payments it just goes straight into deposits or Bank feeds anyway I hope you enjoyed it and I see you in the next one

By Amjad Izhar
Contact: amjad.izhar@gmail.com
https://amjadizhar.blog

Affiliate Disclosure: This blog may contain affiliate links, which means I may earn a small commission if you click on the link and make a purchase. This comes at no additional cost to you. I only recommend products or services that I believe will add value to my readers. Your support helps keep this blog running and allows me to continue providing you with quality content. Thank you for your support!

Video Book

By Amjad Izhar
Contact: amjad.izhar@gmail.com
https://amjadizhar.blog

Affiliate Disclosure: This blog may contain affiliate links, which means I may earn a small commission if you click on the link and make a purchase. This comes at no additional cost to you. I only recommend products or services that I believe will add value to my readers. Your support helps keep this blog running and allows me to continue providing you with quality content. Thank you for your support!