 QuickBooks Online 2022. Apply customer deposit credit to invoice. Get ready because it's go time with QuickBooks Online 2022. Here we are in our Gik Ray Guitars practice file. We set up with a 30 day free trial, holding down control, scrolling up just a bit to get to the 125% currently in the homepage. Otherwise known as the get things done page and the business view as compared to the accounting view. If you wanted to change to the accounting view, it is something you can do by going to the cog up top and the switch to the accounting view down below. We will be toggling back and forth between the two views either here or by jumping on over to the sample company file currently in the accounting view. Going back on over, we're gonna open up a few tabs up top, going to the tab, right clicking on it, duplicating the tab. Back to the tab to the left, right clicking on it, duplicating back to the tab to the left, right clicking on it and duplicating one more times as those are thinking, we're gonna be putting reports in them. Let's go and check out the sample company to see where the reports are located in the accounting view, which is down here. And it's indicated by the letters down here, R-E-P-O-R-T-S, which stand for or if read reports. And then in the other view, in the bookkeeping or in the business view, it's in the business overview area. And then the reports right there, closing up the hand boogie. We're gonna open up the balance sheet. Let's open up the balance sheet to start out with one of the faves of course, up top from 010122 to 123122, run it. And then we're gonna tab to the left, tab, tab to the right, tab to the right. And then we're gonna go to the business overview again and the reports again, closing up the hand boogie again, opening up the profit and loss this time with the year to date on the range change up top from 010122 to 123122, run it. Tab to the right, tab to the right, my darling. And then we're gonna go down to the business overview and we're gonna go to the reports and let's open up the profit and loss again so we can see one of them with a current month versus the year to date numbers. Let's start this one out at the beginning of 020122 to 123122 and run it. Now in prior presentations, we imagined a scenario where we had multiple people coming in wanting a particular guitar. We didn't have it on hand. We said, hey, we'll order that guitar for you. We will get it, we will prepare it, but we would like to receive a down payment from you first before we do so. If we go back to the first tab then when I hit the plus button, instead of making an invoice and then receiving the payments or instead of making a sales receipt when we get paid at the same point in time as when we do the work, we entered a received payment first, which we know typically, we know that the received payment will reduce the accounts receivable, but it has no invoice to reduce. Therefore, it made a negative receivable. We did that instead of making a positive liability, which would be the proper thing to do from a reporting purpose, but it works fairly well logistically as we discussed to make the negative receivable because the negative receivable will result in the system being able to make a credit for that particular customer, a credit meaning some, a credit balance or a credit on debits and credits because it's a receivable. It's on the credit side for that customer that we can then apply to the invoice when we later make the invoice. So it's not perfect for reporting purposes, but we can make an adjusting entry at the end of the period. And for just logistical purposes, it works quite well for us to then apply out the credit. So let's go back on, let's open up another report on the right-hand side, which is going to be our customer detail report. So we can see that activity. I'm gonna right-click on the tab up top and duplicate the tab again. Let's open up one more report over here so we can see exactly what the story is. What's the story, man? What's the story these days with Get Great Guitars? I'll tell you the story. Here we go. We're gonna go down. It's in who owes you. We're gonna be down here in the customer balance detail. Customer balance detail. And then I'm gonna change the dates to the custom date for 123122. Hold on a second. 123122, run it. Holding control, scrolling up just a bit. Now it only shows, well no, it shows the activity here. So we're looking for those items that have these negative balances like for Anderson guitars. It has a negative receivable that doesn't make sense from a reporting purposes because a receivable means an asset. And if it's a negative asset, it should be a liability. However, for reporting purposes, when I apply the invoice to this negative receivable, we will be okay at that point in time and logistically inside the accounting software, it's a lot easier to apply the payment, which will be the credit that will show on the invoice this way because we're in the accounts receivable, which is used to track the customer detailed information in the sub ledger. We can also see it if I went back to the first tab here and I went down to the get paid and paid area, which if you were in the accounting view, which would be in the sales area. And if we went in then to Mr. Anderson, Mr. Anderson, we see that we have this, let's close up the hand boogie so we can see it better. We've got this unapplied amount there, which is gonna be applied when we create the invoice, which is nice and clear in our bookkeeping system. So if they were to ask us if Mr. Anderson asked us, anybody can look this up and say, oh yeah, you got this unapplied amount that we can apply to a future invoice right there. So now we're gonna imagine we have that future invoice. One more look just to note, if you see this on like a flow chart, this is the desktop version flow chart, but we're just looking at it for demonstration purposes. If you see this amount, usually you create the invoice and then you're gonna get the receive payment, then we make the deposit. This time we recorded the receive payment first, that resulted in a negative receivable that we can then apply out to the invoice. Next time we'll look at a way that we can make the liability when we get the prepayment, although it has logistical problems, which I think is a little bit more complex from the bookkeeping side of things, even though from the financial reporting side of things, it would be more proper to have the positive liability other than the negative receivable. Again, if you have a negative receivable, you could fix that with an adjusting entry at the end of the period, which could work quite well too. Okay, so now we're gonna go back on over here and we're gonna say, let's make an invoice. Make an invoice and I'm gonna say, also just before I make that, just note that this 300, you might be asking, well, how would I know how much to charge for the deposit? So to do that, you might say, well, I might have a policy that I'm gonna collect like 10% of the deposit or something like that, and I could create the invoice and then actually figure out how much I want to get a prepayment on it for, or you might make an estimate. So just note that you might say, I'm gonna make an estimate if someone came in and said, I would like this custom guitar. And we say, hey, we would like to get a down payment. You might first make an estimate and say, okay, and this is what would be done before you got the deposit, right? I might say, okay, Mr. Anderson, Anderson, what kind of guitar do you want? And he's like, I want this really gaudy, bright gold guitar with sprinkled glitter all over or something like that. Like, man, I don't know if I even want to display that in the shop, but we'll order it for you, but we need a down payment. So then they could tell, then we can get the estimate down here and say it's gonna be a EPSH guitar. And he's gonna want two of those, he says. It's gonna be a taxable item. And then we can say it's an ELP. And so we could say that would be one of those items. So that would then come out to that. And then if I had the tax applied to it, I'm gonna adjust the tax to make this our generic 5%. I'm gonna change the tax to the generic five for the practice problem purposes, as has been our custom for the practice problem. Why? QuickBooks ask why they've got to know everything. Do you have to know everything? Every reason I do everything? QuickBooks, just do it, man. So that's gonna be the, there we have it. So then we might take this amount. We might say, okay, that's how much it's gonna be. I want 10% down or something like that. That's not what we did last time, but that's one way that you might calculate the down payment. And then you might say, okay, I'm gonna save this. I'm gonna save or send it. I'm just gonna save it and close it. And then when you come in, when I get the guitars ready, we already have the estimate ready for you and we made the prepayment in the past. So now we have our estimate here. I could use the estimate to create the invoice and I'll be able to then apply out the $300. So now we're saying, okay, we charged the 300. We know what they ordered. So I've got the estimate here and now we can create the invoice from the estimate and then look to apply that 300 to it. So now we got the guitars and we got our down payment. We can create the invoice here. I can say let's make the invoice for Mr. Anderson. And so it'll populate for us automatically from the estimate, for example. And then let's say this happened on two, they're gonna say this happened on 226, 226, that the actual sale, the sale happens down here and it pulls in the information from the estimate that we had. Notice it doesn't automatically apply out the credit here. So it's a little bit different here than what you will see on the desktop version. I'm not gonna have like a button up top that says apply out the credit or something like that. Notice I don't see like the credit to apply out here. But what I'm gonna do is I'm gonna, I'll show you how to do this. I'm gonna save this and then it'll basically apply out the credit. So let's go down and say I gotta adjust the sales tax again. So I'm gonna go into this item and I'm gonna say I want the generic 5%. I thought I told you last time QuickBooks, it was in the estimate generic 5% because reasons, that's why, reasons QuickBooks. And then we'll save it. It's because it's a generic problem, that's why. So there we're gonna have, so there's gonna be our total amount. Now I'm gonna save it and then QuickBooks often will automatically apply the credit out and then I can open it back up again to have the credit. So we'll show you what I mean. I could say save it and close it. And then I'm in the detail here and I see their information. So now I'm gonna close up the hand boogie. And so now we've got the invoice and then the payment. So the payment happened first and then the invoice and it's got the partial payment here. So if I open this invoice back up, if I go back into the invoice, we can see that QuickBooks took the pre-payment and made a partial payment for it. So now we see the $300 down there. So that's how you can do it. QuickBooks will basically do it for you automatically, meaning it connects the credit out automatically, generally, but if it did not do that, then what you could do is I can close this back out and you could see down here, the payment now has been applied out. It's closed out the payment. If it didn't do that, you could go into the payment right here and then say, I'm gonna apply this payment down to the invoice, which is now being applied out. It did it automatically. And that's why you can go back into the invoice, open it back up, and then it does the calculation at the bottom down here for you after you apply it out. So notice it's kind of a two-step process, meaning you enter the invoice. You don't have any kind of automatic button that's gonna change things on the bottom down here, but if you close out the invoice, it will typically apply out automatically or you could then apply it out if it does not and then go back into the invoice and it should do the calculation. It'll keep on changing the sales tax, but I'm not gonna save the change. So just remember the sales tax is gonna be for our practice problem purposes, the generic five for reasons purposes, for practice purposes reasons. So there is that on it. So I'm just not gonna save the change every time they try to adjust it there, but that's gonna be the idea. And so then I'm gonna close this back out and we can then see what happened with the invoice and notice in here, because we'll do a method number two in a future presentation and you'll see kind of the difference between the data in here. The second method, remember, we'll make it a little bit better for reporting purposes in that we'll have the liability account, but the tracking in here looks perfect from an internal bookkeeping system because I can see exactly what happened. I saw that payment that I needed to apply out. I can see exactly what is happening when I look into an individual customers, basically records, the invoice is partially applied. So this screen looks perfect for me as an internal user to be dealing with customers typically. Okay, if I go then to the second tab, we entered basically an invoice which does exactly what you would expect it to do. We had an increase in the accounts receivable. If I go into the AR and hold down control and scroll down to the AR, we've got this accounts receivable for Anderson. There's the invoice. If I go into the invoice, remember it's gonna change that sales tax most likely again. So I gotta keep on adjusting it for practice purposes, but see it tries to recalculate it. I'm gonna adjust it again. Just don't save the change but I wanna talk about it here. So I'm gonna say 5% for other, confirm, okay. So there we have it. And notice it put it in there at this amount, including the sales tax. This bottom part right here, the $300. That's already been put in place. That's already in our books. We just put it at the bottom for reporting purposes for the customer. In other words, I'm not recording the invoice at 1,065, the amount that is still due. I'm recording it at the 1,365, the amount that we charged, including the sales tax. And then this $300 is already in our GL, which is gonna net out against this amount to result in them only owing 1,065. But the GL's being hit at this point with this invoice by the 1,365 is the point. Closing this back out. So there's the 1,365. If I go back up, then to my report, then go to the income statement and make sure it's fresh, a fresh statement. We can go into the sales item here and we're gonna hold control and scroll down and say the sales item are gonna be the line items that are on the invoice. Again, for what we charged on the invoice. So we're not decreasing it for the deposit that we got because we earned all of the income at the point in time we did the work at this point in time. So we're gonna go back up top and then the difference would of course be on the balance sheet back to the good old balance sheet and it would be in the sales tax payable that we owe that we had to keep changing to 5% going to sales tax payable. If you're in California, they got the department of tax and fee administration, blah, blah, blah, it would be in there. And then we've got the receivables going down. If I go into the inventory, the receivables are going down just as they would normally driven by the items for amounts that aren't actually on the invoice but the system knows about it because of the items. Going back up top again, back to our report. The other side in the cost of the goods that are sold, the expense account for the inventory we sold on the income statement. So it would be right in here in the cost of the goods that were sold, going back up top again, back to our report. We also know that the sub ledger and just note that this is our income statement for year to date. This is the income statement now for just the month of February. And so we have the same impact on income and cost of goods sold, but this is just the performance report for February versus the year to date. We also note that the sub ledger over here, if I go to the sub ledge, then, and I update it, let's run it again. So we have some fresh stuff we've got then. And I think it's only showing the balances here. So let's go up top and see if I can customize this report. I would like to see the detail if I may filter in it. And let's say we want to see not just, we want to see all of the stuff, all of it down here and run that so I can see my activity. So here's Mr. Anderson. And so now we've got that 300 payment. And so now we've got that 300 payment was applied out to the invoice here for the difference of that invoice on the opening balance on the right hand side, which we also saw by going back to the first report internally in the data for Mr. Anderson over here. So if I go back to the report to the right, so notice at this point in time, Mr. Anderson is good. We don't have a negative balance. So that problem of reporting unearned revenue versus a negative receivable isn't a problem after the thing is complete. It's only a problem if at the cutoff date, when you need to report the financial reportings externally, you have this basically negative balance here, which is understating the accounts receivable and you have not yet done the work or issued the invoice, at which point you might need to do an adjusting entry at the end of the period. Now, of course, we also could look at the sub ledger for the inventory, but I won't go into it now because we've seen that in the past, but it should tie out to our inventory account here. If I go back to the first tab, we see the detail for Mr. Anderson. We can also check out our detail by going to the activity, hitting the plus button. We can go into the business, no, it's in the bookkeeping area and the business view. If you were in this view, it would still be in the sales area. And we can look at the detail on the transactions, closing up the hamburger, and then we can go into the sales, all sales. And we can say, let's just search by say the invoices, drop down, drop it down and searching for the invoices. Here's all the invoices. And then I might say, well, let's just take a look at the invoices that are still open and outstanding with a further filter, and then we got the invoices outstanding. Here's the Mr. Anderson invoice, which was the total of the 1,365, which has been partially paid. The 1,065 we can, of course, and expect to receive the further payment at which point we'll have to receive payment form on the right. Okay, let's go back to, let's open up a trial balance and just see where we're standing at this point, hitting the hand boogie and going down to the reports. And we're gonna then close up the hand boogie, type in trial balance, trustee trial balance. That's what happened, I spelled it. I always spell it trail balance, trail balance, but it's trial balance. Let's range into the change in 010122 to 123122. Run it, here's where we stand. If your numbers are tying out to these numbers and you're following along, then that's good. If not, then try a date range change. Sometimes it's a date issue and we'll be doing a transaction detailed report at the end of the section, which is a great tool for diagnosing any differences.