QuickBooks | Invoice or Sales Receipt

In QuickBooks you are offered both an Invoice or a Sales Receipt for charging customers for products and services you provide. It is important to know the uses of each.

When Does the Customer Pay?

If the customer pays after the service or products are billed, then an invoice is the best way to handle the sale. If, however, the customer pays at the time of service then it may well make sense to simply use a sales receipt. A sales receipt essentially accomplishes the same thing as an invoice except that it handles both the invoicing and the customer payment at the same time. This eliminates the need to invoice the customer first and then receive a payment against the invoice. Another nice aspect is that you can print the sales receipt for the customer at the time of the sale and have it show how it was paid. That gives the customer a proof of payment that accompanies the billing. An example would be a company that does repairs and receives payment when the repair is completed.

Do You Have Multiple One Time Customers?

All of us at some point have made a purchase in a store and received what might be referred to as a generic receipt. For example, customers may make one time purchases and no more. If there are a lot of customers doing this then it may well make sense to use a sales receipt and a generic customer name such as “Cash Sales”. Remember that QuickBooks has limits on the total number of list items and each customer counts as a list item. By using a generic customer name for multiple customers you effectively handle numerous customers with only one customer name counting against the total item list. You can of course reference on the cash receipt the individual who actually made the purchase and payment for future reference. Creating an invoice would not work well for this. One reason is that if the customer is paying you later and you receive the payment but do not have that specific customer setup in QuickBooks, then it could be difficult to post the payment to the correct invoice if the customer fails to reference the invoice.

Prepayments and Partial Payments

When customers prepay or make partial payments, you have a situation where creating an invoice is the best method. That way you can track prepayments and partial payments for a particular customer and related invoices accurately and have a history of all the transactions.

What other reasons can you think of that will help determine if you should use an invoice or a sales receipt?

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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