and now we will learn how to record receiving advance
payments from clients these are also called job deposits
receiving advance payments from clients will result in several things in your QuickBooks
records client reports will show money owed to clients until we actually invoice them the
accounts receivable account in the chart of accounts also called the trial balance
will temporarily be inaccurate until you bill the client if you make financial statements
before the client balance becomes positive your accountant can easily make a quick accountant
adjustment to make the report accurate until the client is billed if you receive a payment from a
client before an invoice is made QuickBooks will ask you to print a credit memo for the client we
have already changed the words on the credit memo to read deposit receipt we did that in the earlier
videos of this course for example let's imagine on January 25th we made estimate number three
for Kirschbaum for the South Woods Road job let's imagine we put 50 units of carpentry 66
dollars each 50 units of electric electrical work 77 dollars each 50 units of Mayson work 88 dollars
each and 50 units of steam cleaning 55 dollars each these are the things that we will put on
the estimate and save it and then after that we will immediately take a deposit from Kirschbaum
from the main menu click customers create estimate notice QuickBooks remembers its estimate number
three the date of the it is January 25th so let's go forward to January 25th of 2017 the job
and client is Kirsch bound but specifically the South Woods Road job now let's read off the items
carpentry electrical Mason and steam carpentry electrical Mason and steam okay now let's put
in the quantity fifty of each well that should be easy to remember 50 50 50 and 50 okay now
we'll put the cost each 66 77 88 and 55 66 don't worry about the price level message 77 88 and
55 notice the entire estimate is fourteen thousand three hundred dollars so now that
we have successfully made the estimate let's click Save and close and confirm that the estimate has
been recorded under Kirschbaum in the South Woods Road job by looking at the report estimates by job
now the interesting part happens on the same day that we make the estimate January 25th we receive
check number 72 from Kirschbaum for the South Woods Road job five thousand dollars QuickBooks
will ask you to print a credit memo at the minute you record this payment because we have no open
invoices for the South Woods Road job the credit memo is the deposit receipt that we made in video
number one at the beginning of this video series from the icon bar click payment the date that we
received the payment is January 25th of 2017 the person whom we received the payment from
his Kirschbaum but it is specifically for the South Woods Road job check number I believe it
was checked number 72 72 now the money amount was $5000 at the moment we push tab QuickBooks has
nothing to apply the 5,000 to because we have not yet made any invoices for this particular job when
we click Save and close QuickBooks will ask us to print a credit memo and that will basically be
the deposit receipt for Kirschbaum for the South Woods Road job when we click print credit memo we
have the option of either physically printing it from a printer or just previewing it on the screen
because this is a video I'm going to click preview and you can see it says deposit receipt and when
you click here you can see whatever other details you would normally put on the deposit receipt when
you customized it at the beginning of this course when you made a deposit receipt from
a basic credit memo this is managing the document templates and you can explore and experiment with
changing your document template on your own time to get out of the this view of seeing the deposit
receipt and go back to QuickBooks look at the top left corner of your keyboard and hit the
Escape key okay then you can just click cancel for regular printing and the transaction has been
recorded now let's take a look at the results and the customer reports when we look at the customer
balance detail we can see that the South Woods Road job under Kirschbaum has a negative balance a
negative balance means that we owe them for future service when you look at the open invoice report
the payment will show up here the reason a payment shows up on open invoice is because it has not yet
been applied to any invoice and in our case we cannot apply it yet because we have not yet made
any invoices for the Kirschbaum South Woods Road job and now we will invoice the client January 30
made invoice number 6 for the South Woods Road job on this invoice were going to declare that
we did 20% of the entire job at the moment we make the invoice we will immediately apply the
pass payment to the invoice from the icon bar click invoice notice QuickBooks remembers that
were up to invoice number 6 and if not you could always change this to invoice number 6 the date of
the invoice is January 30 and the client and job is the Kirschbaum job on South Woods Road notice
as soon as we choose the Kirschbaum job on South Woods Road we get this window available estimates
and that was the estimate that we made earlier it's the only one to choose so we're going to
click on it and then click OK and at the moment we click OK we get this message create progress
invoice based on estimate we're not billing the client for a hundred percent of the job we have
to click here create estimate for a percentage of the entire estimate click in the box and put 20
because 20 percent is the amount that we finished of the entire estimate and only 20% should go on
this invoice when we click OK we notice that QuickBooks adjusted the quantity accordingly
because the quantity of 10 is 20 percent of the entire 50 quantity on the original estimate so
the money amount of this invoice you might not be able to see it but the money amount of this
invoice is two thousand eight hundred sixty dollars now before we save it we have to go
up here in the ribbon make sure the main tab is selected and click the command that says apply
credits okay now you have to save this before you continue do you want to record just click
yes and we get the apply credits window notice there's only one credit available in the amount
of five thousand and it was credit number you know was from their check number seventy two if
there were several credits you would click on the appropriate credit that you're applying to this
particular invoice but because there's only one credit from that payment on the 25th QuickBooks
automatically place the check mark there so we will agree and we will click done at the bottom
of the window and then click Save and close by the way after you click done notice the balance due I
don't know if you can see it but the balance due goes down to zero and it says paid at the minute
we save this invoice now when we look at the open invoice report the payment is still open on the
open invoice report but the amount of the payment open is the remainder of the five thousand two
thousand one hundred and forty dollars we could always double click and see that the payment
was five thousand and two thousand eight hundred sixty dollars was applied to invoice number six
close it out close it out we can also look at the customer balance detail and we can notice
that the balance on the South Woods Road job back on the 25th was five thousand then we did
some work which was supposed to be dated January thirtieth save and close yes and then you could
see on January 30th the balance went down to two thousand one hundred forty you might not have to
change the dates things going on with my computer because we originally recorded this as the January
30th so you can see the balance becomes less negative on the day that we make an invoice