Receiving Payments in QuickBooks
Recording customer payments accurately is essential. If you don’t, you could miss out on money you’ve earned or upset customers by asking for payments they’ve already made. Here’s how to streamline the process in QuickBooks!
⚙️Setting Up Payment Methods
QuickBooks comes with some helpful pre-defined payment types; however, you also have the flexibility to edit that list and add new types.
- Access Payment Methods: Open the Lists menu and select Customer & Vendor Profile Lists, then Payment Method List. This window opens:
Figure 1: QuickBooks lets you accept payments from customers in a variety of ways.
- Edit Payment Types: To make changes to this list, click the down arrow to the right of Payment Method. By selecting items from this menu, you can add, edit, and delete payment methods. You can also make one temporarily inactive if for some reason you’re not going to support that option right now but don’t want to delete it, either.
- Click in the box next to Include Inactive if you want it to remain on the list (an X will appear next to it).
- When you want to reinstate it, open the Payment Method menu again and select Make Payment Method Active.
- To search for every transaction that used a specific payment method, highlight it in the list and select Find in Transactions. QuickBooks will open the Find window with that filter already applied.
When you’re done working with that window, click the x in the upper right to close it.
📝Applying the Funds
Ideally, you or someone on your staff will be working frequently with the Receive Payments screen frequently. To get there:
- Open the Customers menu and select Receive Payments, or click Receive Payments on the home page. This is the screen you will work with if you’re recording a payment that is to be applied to an invoice that you sent.
Figure 2: The Receive Payments screen in QuickBooks
- Select Customer: Click on the down arrow in the field to the right of RECEIVED FROM. If there are outstanding invoices, they will appear in the table below.
- Enter Payment Details: Input PAYMENT AMOUNT in the field below, and change the DATE if necessary. Click on the icon representing the PAYMENT METHOD icon.
- If you don’t see it there, click the down arrow below MORE and add it or select it. Your chosen icon will turn green.
Payment Details:
- Cash or E-checks: Enter any necessary REFERENCE #.
- Checks: Input the CHECK #.
- Credit/Debit Cards: If you’ve saved the customer’s preferred payment method in his or her record, the number will fill in automatically. If not, or you need to change it, enter it manually. As you know, you need a merchant account in order to accept credit/debit cards and e-checks. If you haven’t set one up and want to, let us help.
- Review Payment Allocation: If the payment amount equals the total of all outstanding invoices, there will be a check mark in the first column of every line in the table. If the payment is for any less than the CUSTOMER BALANCE in the upper right, QuickBooks automatically pays the oldest invoice(s) first. You’ll also see an UNDERPAYMENT box in the lower left corner.Click the button in front of your preference here (leave as underpayment or write off the extra).
- Save Your Work: When you’re done, click one of the Save buttons.
🛒Other Types of Payments
You’ll also use the Receive Payments window to:
- Record down payments and overpayments. And there are situations where you’ll have to complete other forms to document the incoming money.
- Partial Payments: For products/services not yet invoiced, use a Payment Item.
- Immediate Payments: Use a Sales Receipt for payments received at the time of service.
Figure 3: Sales receipts go to customers who pay for products or services at the time they are received.