Hey, it's Candus and in today's QuickBooks tips and tricks,
I'm gonna share with you how to generate an invoice
where
customer, your customer will be paying down each month.
But you'll also be charging them a finance charge or interest
every month for the balance remaining. How would you do that?
And then how do you send them a statement each month, so that they know
how much their balances and their current interest.
So come look over my shoulder.
So the first step is to go in and actually create an invoice.
So we're gonna go under,
create invoice and the reason we use create invoice
versus sales receipts or, or putting the income directly in,
is because we want to be able to apply a payment.
So by using create invoices, it allows you to have a
accounts receivable available to apply payments to.
So we're gonna go down and we're gonna
you're gonna put in your customer, whatever their name is and their information
and then you're gonna go down and you could call this commission,
if you want.
So in the example, I'm using would be
a realtor who
sold a piece of property
and was
supposed to pay, we paid a commission and went under an agreement
to get paid payments or installments.
So we're gonna create commission, and we're gonna add that,
and we can do it as an other charge
and you're gonna choose your income account that you want
So commission is non taxable,
can choose to put a description if you want,
and then we are going to do
we'll just do it under sales.
Typically, depending on how many different types of categories of income you have,
this is, this
that you select here is what's gonna actually show up on your profit and loss.
So we'll click OK
and we just created a new item.
So you could say
4567 Main Street
and you would just put in agreement and all the details
and this is what's actually gonna show up to the customer
later
So let's just say that the amount was
$5,000
and that would be your invoice.
So we're gonna hit Save and Close.
We're not gonna worry about
classes in today's
how to, I'm gonna go under reports, company & financial
profit & loss standard
and you'll notice that this report is pulling up on cash basis.
So it's not showing up.
But if I go up under customize reports,
change it to accrual basis,
you'll notice there's the $5,000 in sales.
So what will happen if you're on cash basis is as the person makes payments,
they would show up.
So what you would do is at the end of the month,
so let's say that we are at the end of the month,
we will pick Ron,
he hasn't made any payments yet,
we're gonna say as of the 31st, we're gonna charge him interest
on the amount of commission, he hasn't paid us yet.
We're gonna consider that interest income.
We'll do that as an other charge
and you can decide if you want it to be up in your regular income
or if you want the interest down in other income
and you could have interest income here.
So when you, if you don't have interest income, you would add a new one
and then you could choose other, either other income,
or
go to the top and choose regular income when you're creating it
and we're gonna click OK
and here it would say interest
charges or whatever you want to call it.
September
9th,
through
September
30th
2015
and then you figure out whatever your interest is, I'm just gonna give an example
You know, if you wanted, you could say actually in here,
interest charges
on a balance
of
$5,000
At,
let's just say 5%.
I'm not worried, gonna worry all about the amortization,
but we could put equals $250
and that would be for that timeframe.
You can choose to put this wherever you want.
If you want to move it up, you can move it,
you know, decide what, what looks best to you to create here
and then let's do the 250
and what that will do, I'll show you what it look like.
You'll just have interest charges, the date
of a balance and the dollar amount.
You can also do as of
and the date like as of interest, interest, charges for the balance as of
9/30 $5,000. Whatever you want to do it doesn't really matter.
I'm just teaching the technique.
So you hit save and close,
we're gonna save it without that.
So now what's happened if we go into the customers and we look at Ron,
we have the $5,000 original
and a 250
interest. So then what you're gonna wannna do
so we're gonna go in and we're gonna run a statement.
and on a statement, we're gonna choose
transactions until September 30th.
Statement dated September 30th,
you can choose your one specific customer
and then over here,
this is what's gonna look like if you don't change anything
It look like this and it has like bounced checks, these are different things I've,
I've done through teaching QuickBooks for you guys.
But what I would do
is we'll go through September
9th.
Let's just say, you know, guess there's other stuff in there.
We're gonna show
show invoice statements,
and then we'll preview it.
So what this is gonna show you
don't worry about the balance forward.
Typically, you wouldn't have that.
In this example, we're showing commission $5,000
and then we're showing interest
of 250,
and the dollar amount.
So what this would allow, you could send your person the statement at the end of the month.
And if they make a payment,
it will show the payment in here on each month statement.
So again, what you're gonna do is create an invoice
for the full amount that they owe you,
then you're going to create an additional invoice
each month. That's just the interest.
and what will happen is month after month after month,
you'll show
principal,
you would then apply the payment.
So if you got a payment from them,
let's just do an example, I show you real quick.
If you had Ron,
let's say they paid
$750.
On October 1st,
we're gonna uncheck anything else that's in here.
Easiest way to do it is first apply the interest,
then click on the amount of principal basically that they owe you.
And then you're gonna leave the underpayment
and then your Save and Close
and then at the, and then you go in,
and at the end of
the month, you're gonna look and say okay, they owe us $4500 on that particular invoice,
create an additional
interest income.
So you could go in,
create another invoice,
dated
October 31st
interest income
and then you could choose,
I'm gonna actually click Save and Close real quick,
what I like to do is try to stay consistent on my invoices.
So what I would do
is go back in,
pull up my original invoice,
copy exactly what I wrote
then I go back into the other one.
Put that in there
interest, and this is where balance of, now it's gonna be $4500
at 5%
will be to 225.
Click that, save and close it
and then when you go in to create statements, you can create
statement here on the homepage.
We're gonna do the ninth
through October 31st, you can see what it look like this would be a complete
month of what you would do,
they make an extra payment,
the extra payment beyond principal will go just direct or
beyond interest will go directly to principal
and then we're gonna click Preview, this is what it would look like.
So your statement would be dated
October 31st
and it would show
you wouldn't have a balance forward on yours, but it would show you $5,000
this would say 5000,
then you'd have your $250 interest,
your payment,
and then an additional invoice for the new interest
and it would just keep going on and on and on
and then whenever you choose
to
pick whatever dates you pick here is all the detail it's gonna give you
So I hope that was beneficial for you.
I had, had that question, how do I create an invoice
and then they make payments.
But then do I do a new invoice every month? Or how do I do that?
And then what's gonna happen on your profit and loss.
Just so you can see the whole picture
because I'm all about the whole picture.
If we go through
October 31st,
you will see your sales
here
of how much they actually made in principle.
So that's the principal that was paid down
and then down here
you will see your interest income
Now because this is cash basis is only giving you the amount they paid.
If you change this to accrual basis.
It will show you the whole amount.
All the whole sales and the whole interest, as the interest
Because you keep getting paid interest each month so that's income to you each month.
I hope this been beneficial if you know somebody who could benefit from it,
please SHARE it
and I will talk to you guys again next week.
I am loving the questions. So please,
if you want me to create a video for you,
don't hesitate to ask me question. I love them.
And Confidence with QuickBooks is
I'm doing my first webinar this week.
You are welcome to join me live and ask me questions live.
If you want to find out more,
feel free to check out
quickbooks.com and Candus Kampfer.
Talk to you guys soon
Bye.