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About this lesson

Let's discuss how to create an invoice and apply a customer payment against the invoice.

Quick reference

Using invoices

An invoice is a form that will track what was sold and who it was sold to. 

When to use

If you want to track what you've sold and/or who you've sold it to, you'll use either a sales receipt or an invoice. The invoice is chosen if the customer is paying later.

Instructions

To create an invoice:

  1. Click on the + New in the upper left hand corner
  2. Select invoice under the column called customer
  3. Fill in the invoice form
    1. Customer 
    2. Email (optional)
    3. Date
    4. Product/service (pick what you're selling on the dropdown)
    5. Quantity (pick how many you're selling)
    6. Rate (enter the price each)
    7. Repeat 4-6 for as many things as you're selling on this invoice
    8. Choose save and close (or save and send, or save and new)

Hints & tips

  • Do not use this in conjunction with a sales receipt or depositing directly to income. Please pick one method and stick with it to minimize the chances that you'll make an error with your income.
  • If you are using a 3rd party app that integrates with QuickBooks Online, it may create invoices for you. This is not a common situation but it can happen.
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  • 00:04 In this video, I want to talk to you about creating an invoice for your customer.
  • 00:09 Just a quick reminder, an invoice is what you're going to create if you want to keep
  • 00:14 track of what you've sold to a customer and
  • 00:16 you're asking them to pay you, later might be upon receipt of the invoice.
  • 00:21 But it's not payment immediately right now while we're on the phone or
  • 00:25 while you're at my office.
  • 00:26 All right, so an example of an invoice could be, like I said before,
  • 00:30 the electric company sends you an invoice,
  • 00:32 whereas the repairman that comes to your house is asking to get paid right away.
  • 00:38 So let's go to our example list.
  • 00:41 In this case,
  • 00:42 we're going to say Cheesy Chester wants to buy a Team Building package.
  • 00:46 And so we said no problem, Cheesy, happy to do this.
  • 00:49 I'm going to send you an invoice, you're going to pay for it.
  • 00:52 And once you pay for it, we'll definitely lock in the date.
  • 00:56 So let's go over to QuickBooks.
  • 00:57 In the upper left-hand corner, we're going to click on New.
  • 01:01 Under the Customers column, we're going to go to Invoice.
  • 01:05 We're going to find our customer, Cheesy Chester.
  • 01:09 And we're going to say, pay it within the next 15 days, it'd be great.
  • 01:13 So that today's date, due date automatically calculates,
  • 01:17 invoice number automatically calculates, and then they're buying Team Building.
  • 01:22 So the product and service list doesn't include what I want, so
  • 01:26 I'm going to add it.
  • 01:27 I'm going to click on Add new.
  • 01:30 It's a service, and I'll go with Team Building.
  • 01:35 So, 3 hour corporate team building, 999.
  • 01:42 The income account, just a reminder, QuickBooks is defaulting to Sales,
  • 01:46 but I have very specific chart of accounts because I want to see all the good stuff
  • 01:50 I'm doing and all my hard work.
  • 01:53 I want to see it coming together on the profit and loss.
  • 01:56 So anytime I use Team Building on an invoice or on a sales receipt,
  • 02:02 I'd like it to map to Team Building Income, Save and close.
  • 02:07 So it pre-fills all this stuff for me, which is great.
  • 02:10 I'm going to say Save and close.
  • 02:14 And there it is.
  • 02:15 I've sent off my invoice.
  • 02:18 Now I'm going to pretend that it's a couple days later and
  • 02:21 the client has paid the money.
  • 02:23 In the upper left-hand corner, I'm going to click on New.
  • 02:26 Under the Customers column, I'm going to come down to Receive payment.
  • 02:31 All right, so I'm going to say who gave me the money,
  • 02:34 Cheesy Chester gave me the money.
  • 02:36 I can click the drop down and find their name, or I can just type, doesn't matter.
  • 02:41 So I click on and say this is who it is.
  • 02:43 The payment date is today's date.
  • 02:45 I'm going to indicate how they paid.
  • 02:47 They paid by check.
  • 02:49 They sent a check, number 3456.
  • 02:52 How much did they pay?
  • 02:55 I can see down below that they owed 8,999.
  • 02:59 I want you to enter the amount that they actually paid, not the amount they owed.
  • 03:05 So we're going to say 8,999, but in the real world, you might get a check
  • 03:10 that says $9,000, or it might be 8,998, or any other variety of things.
  • 03:17 If that happens, no problem, it can be fixed, but
  • 03:20 it need you to put in the amount of money that they've actually paid.
  • 03:24 I need this bold number in the upper right-hand corner to match whatever's
  • 03:29 going to show up on the bank statement associated with this account down here.
  • 03:33 Okay, so they paid, life is good, Save and close.
  • 03:38 If you wanted, and you saw on that last screen, you can go back and
  • 03:42 send them a receipt.
  • 03:45 So let's take a look at Cheesy Chester's profile.
  • 03:47 If I go to Sales and then down to Customers, then I'll see okay,
  • 03:52 here's Cheesy Chester, and here's the invoice, and here's the payment.
  • 03:58 If I were to look at either of them, I can click on the invoice.
  • 04:02 Here it is.
  • 04:03 I can click Cancel.
  • 04:04 If I want to look at the payment, I can click on it, here it is.
  • 04:09 Either of these things, I have the option to print.
  • 04:12 If I want to preview it and then print it, I can.
  • 04:15 So Print or Preview > Print or Preview.
  • 04:18 Now I'm looking at the invoice and I'm like, okay, yep, that's correct.
  • 04:22 This invoice is now marked PAID.
  • 04:24 So I see a little PAID there.
  • 04:25 This is something you can send to your client if they say,
  • 04:28 I want proof that I paid it, I want to see that you've marked it as paid.
  • 04:32 When you're looking at it yourself, in the upper right-hand corner,
  • 04:36 you can see the word PAID.
  • 04:37 Kind of a fun trick.
  • 04:39 If you're curious how they paid it, and I know in this example we have
  • 04:44 one invoice and one payment, so this isn't very sneaky.
  • 04:48 But if you ever wanted to see how they paid it, you can click on the blue
  • 04:52 hyperlink just under the word PAID, then click on the hyperlink for the date.
  • 04:57 And that'll take you to the payment screen.
  • 04:59 Sometimes what will happen is a client will send a check for multiple invoices.
  • 05:04 And so when you get to this payment screen,
  • 05:06 you might see the total in the upper right-hand corner is for
  • 05:10 a bigger number than what the one invoice was that you were looking at.
  • 05:14 Let me just show you what that looks like real quick.
  • 05:18 So in make believe land, Cheesy Chester owes us $1,200.
  • 05:22 There's an invoice for $799.00 and a different invoice for $499.00.
  • 05:27 Let me go ahead and receive a payment for $1,200.
  • 05:30 Upper left-hand corner, I click on New.
  • 05:33 Under Customers, I come down to Receive payment.
  • 05:37 I find my person, say they paid, this time we'll say that they paid with credit card,
  • 05:43 and it's going in my checking account.
  • 05:46 And then I'm just going to check these boxes and
  • 05:48 let QuickBooks calculate it for me.
  • 05:50 So that's how much they paid.
  • 05:52 So let's do Save and close.
  • 05:56 So now I want you to see something that I think is kind of useful.
  • 05:59 I'm just going to take a look at this and I'm going to say, all right,
  • 06:03 I have invoices and I have some payments.
  • 06:06 And I can't tell by looking at this, I mean, yeah,
  • 06:09 I can tell the $8,900.00 is these two things, but this $1,200.00, I don't know.
  • 06:16 I mean, obviously processing elimination, I know what that is.
  • 06:20 But I want you to see, as your business grows and you have more and
  • 06:24 more things under the profile of Cheesy Chester or
  • 06:27 anybody else, you might get a lot of stuff.
  • 06:30 And you might say, my gosh, I really need to know,
  • 06:33 what invoices did that payment get linked to?
  • 06:36 Or I'm looking at a payment and I want to know what check it got linked to.
  • 06:41 So I'm just going to show you what that looks like,
  • 06:43 because I think it's helpful for you.
  • 06:45 All right, I'm going to click on the payment.
  • 06:47 I can see by clicking on the payment that it's invoice, 1003 and 1004.
  • 06:53 If I want to know more, I can click on the blue hyperlink and
  • 06:56 I can say, that's that one invoice.
  • 06:59 It can also go in the reverse.
  • 07:01 So let me cancel this and take you back here.
  • 07:04 Let's say that invoice 1003, it's marked as Paid.
  • 07:09 But I'm really curious why, because I don't see a payment here of 499.
  • 07:13 I'm going to have you click on that.
  • 07:16 And then in the upper right-hand corner, one payment, click on the hyperlink,
  • 07:19 click on the date.
  • 07:22 And then you can say, I didn't see a payment for
  • 07:25 499 because it was part of this $1200 check, or this $1200 credit card charge.
  • 07:30 This is the sort of thing that happens in real life.
  • 07:33 You'll find yourself mixed up and you'll say, I want to make sure,
  • 07:37 I don't know, they paid, whatever the case is.
  • 07:41 So I really want you to be able to kind of navigate forward and backward like,
  • 07:44 how do I get to my customer?
  • 07:46 How do we look at the things that I've entered?
  • 07:48 How do I look at the payments?
  • 07:50 How do I see which invoice is tied to which payment, all that good stuff.
  • 07:55 All right, in the next video, we're going to talk about how to combine checks from
  • 07:59 various customers into one deposit in your QuickBooks.

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