 QuickBooks Desktop 2024 customer prepayment overview the problem. Get ready and some coffee because we're locking into some non-stop QuickBooks Desktop 2024. Here we are on our desktop going to be opening up QuickBooks Desktop the enterprise version as opposed to the ProPlus version so we can look at the prepayment feature noting that in a prior presentation we set up the sample company file I housed it here in this folder so this is the actual data file I'm going to open it by simply double clicking on the actual software file rather than the data file which is the typical technique the typical maneuver the typical process and then we'll open up the data file within the software now oftentimes it might open up to the prior data file that you were using and this case it's going to give us that intro screen for the trial version here we have it I'm going to scroll down to I want to open an existing company file because we already set up the sample company file before I'm going to the where I located the folder double clicking on that sample company file and it should then open it up it usually opens up the home page when we open this up I will usually adjust this go into the view tab if your view is a little bit different I usually hide the icon bar completely and then I go to the view tab and I look at the open windows list so I've my open windows on the left hand side I can close this screen so I don't need that screen anymore therefore I only have the home tab open now I will often then open up my major financial statement reports no matter what I am doing so that'll be if I go to the reports drop down in company and financial I'm going to be looking at let's open the balance sheet first the balance sheet and then it's showing as of 1215 26 I'm going to bring it out to 1231 27 because I'm going to start to enter the data in the following year and then I'm going to go to the reports drop down company file and the profit and loss it's going from 2026 I'm going to go from tab 010 127 tab 1231 27 for the year of 2027 so there is nothing in it at this point in time when we start our practice problem now first let's just go to the home page and think about the issue that we have and how we can basically deal with that issue and then we'll talk about it in a step-by-step process because oftentimes the prepayment process is quite confusing it can take a few different forms and there are different ways that we can basically accommodate or deal with it each of them possibly be inappropriate depending on our accounting structure so we're down here let's look at the customer cycle now note that if you're not in the enterprise version and you're in the pro version for example you might not see this icon for the sales order so that first might throw some people off and they see that if you don't have your estimates on for a job cost so that you have estimates turned on which I believe are on by default you won't see the estimates but I think by default you usually have the estimates here and then if you're in the enterprise you've got the the sales order so let's first just look at the think about the normal process which is beautifully laid out here in the home page with the float chart so so let's imagine that we're in a situation where we take an estimate which might not always be the case we might we might be in a situation where we just have sales and we don't take an estimate but let's take the longest version of the cycle we have an estimate now the estimate might be we can imagine someone calling in and basically saying that they might want to make a purchase obviously estimates will be there in a job cost type of system where we have a longer project that we're putting together but that's when we're going to basically lay out how much we think it's going to cost what we're going to be charging and whatnot within the estimate the estimate looking like an invoice but it doesn't actually post anything nothing will actually be posted with the estimate it's an internal document now then if the client accepts the estimate then if you didn't have the sales order you would basically say well then I'm going to go to the invoice over here and I'm going to create the invoice from it so that's how you would have it if you didn't have a sales order but if you have the sales order you can get this added step where you're saying okay the estimate might not be accepted I might have a bunch of estimates depending on the type of industry or company that I'm in that I have created and I might only actually fulfill or have some estimates that are accepted that could be a low percentage of the ones that I make right so the sales order is a nice in-between step that can kind of give you an indication that the estimate has now been accepted now if you're in a job cost kind of system or something like that the work still has not yet been done you've just kind of like finalized the fact that now you're going to begin the job or if you're purchasing inventory for example it might be the situation where they want the inventory some custom prod some custom surfboard or guitar or whatever and now you're going to have to order order that for them and possibly select a deposit at that point in time but let's get to the deposits later so now you have the sales order still an internal type of document not actually recording anything on the financial statements but one that we want to track internally so that we can take action on it now then you can see from here the arrow goes from here if I'm looking at the revenue cycle to the invoice so the next thing that would happen is we might take that sales order and say now we're going to create an invoice now when does the invoice usually happen if you're in a normal kind of system let's say you're selling inventory or something like that or doing some jobs that are not too long in duration you're doing a cleaning service or or something like that then you're going to do the work or you'll provide the product and you will then charge them at that point in time the work having been completed therefore under revenue recognition principle you record the revenue at the point in time that you completed it which would be the point in time that you send the invoice so the invoice is the one that actually records something you can create it from either the estimate or the sales order in this case possibly it might be more appropriate to take the sales order then to create the invoice and the invoice is going to increase accounts receivable meaning they owe us money and the other side is going to go to revenue and if there's any kind of inventory that's going to be dealt with here it will also record the decrease in inventory and the related