Saturday, May 30, 2009

Invoicing a Customer

To invoice a customer, use the Create Invoices window to identify the customer and specify the amount that the customer owes. To display the Create Invoices window, choose the Customers ð Create Invoices command. When you do, QuickBooks displays a Create Invoices window like the one shown in Figure 1. Note, however, that the Create Invoices window you see may not look exactly like the one shown in Figure 1. As previously described, you can use more than one type of invoice form. You can also choose to customize an invoice form so that it perfectly matches your business requirements. In the following steps, I describe, generally, how to invoice a customer. The specific steps that you take may be ever-so-slightly different if you're working with a different invoice form template.

Figure 1: The Create Invoices window


In Figure 1, I closed the Open Window List to provide more room for the Create Invoices window. You can close your Open Window List by clicking its close box (the small box marked with an X that appears in the upper-right corner of the list). To redisplay the Open Window List after you've closed it, choose View ð Open Window List.

After you display the Create Invoices window, take the following steps to invoice a customer:

  1. Identify the customer and, if appropriate, the job.

    To do this, select the customer or customer and job combination from the Customer:Job drop-down list. Don't worry about this "job" business if you aren't familiar with it. You must identify the specific customer that you are invoicing. You do this by selecting the customer from the Customer:Job list. If the customer is a new customer that you haven't yet invoiced or described in the Customer List, enter a brief name for the customer — like an abbreviation of the customer's business name — in the Customer:Job list. QuickBooks then indicates that the customer doesn't yet exist on the Customer List and asks whether you want to add the customer; indicate that you do. When prompted, supply the customer information that QuickBooks requests.

    You can also classify an invoice as fitting into a particular category by using the Class drop-down list. Don't worry at this point about using class tracking.

  2. Confirm or provide new invoice header information.

    After you identify the customer, QuickBooks fills out the Date, Invoice, Bill To, and, possibly, the Ship To fields. You probably don't need to change any of this information. You should review the information shown in these boxes to make sure that it is correct. For example, you wouldn't typically invoice someone unless you have already shipped the product or the service has already been provided. Therefore, you probably should confirm that the invoice date follows the product shipment date or the provision of service date. You may also want to confirm, for example, that the Ship To address is correct.

  3. Provide or confirm the Invoice field information.

    Invoices include field information that records items such as purchase order numbers, payment terms, ship date, and shipping method. You should make sure that whatever QuickBooks shows in these field boxes is correct. If a customer has provided you with a purchase order number, for example, enter that purchase order number into the P.O. Number box. Confirm that the payment terms shown in the Terms box are correct. Confirm that the date shown in the Ship field is correct. Not all these fields need to be filled for every invoice, but you want to supply any information that makes it easier for a customer to pay an invoice, tie an invoice to his or her purchasing records, and figure out how and when an item is being shipped.

  4. Describe the items sold.

    How the columns area of your invoice looks really depends on whether you're selling products or services. Figure 2 shows the columns area for a product. The columns area for a service looks simpler because you don't provide much information when describing service items. In the columns area, you want to describe each item — each product or service — for which an invoice bills. To do this, you use a single row for each item. The first item that you want to bill for, then, goes into row 1 of the columns area. For each item, you enter the quantity ordered, the code for the item, and a price or rate. QuickBooks retrieves an item description from your Item List and places this data into the Description column. QuickBooks also calculates the amount billed for the item by multiplying the quantity by the price or rate. You can, however, edit both the Description and the Amount fields. If you edit the Amount field, QuickBooks recalculates the Price Each field by dividing the amount by the quantity.

    Figure 2: How a Create Invoices window may look when completed

    To enter additional items onto the invoice, enter additional rows. Each item that you want to bill for — each item that should appear as a separate charge on the invoice — appears as a row in the columns area. If you want to invoice a customer for some product, one line in the columns area of the invoice is used for that product. If you want to charge a customer for freight, one line of the invoice area describes that freight charge. If you want to bill a customer for sales tax, again, one line or row of the columns area shows that sales tax charge.

    Discounts represent a tricky line item to include on an invoice. For this reason, I provide an example of how a discount item appears on an invoice. Assume that you want to grant some customer a 25 percent discount. In order to do this, you now know (or should be able to guess) that you include a discount line item on your invoice. However, although QuickBooks includes a discount item on its Item List, a discount percentage can be applied only to the previous line item on the invoice. For this reason, QuickBooks also supplies a subtotal line item. You use a subtotal line item to total all the previous items shown on the invoice. By subtotaling all the product items shown on the invoice in Figure 2, for example, the business can grant the customer a 25 percent discount on these products.


    You need to include the percentage symbol for QuickBooks to calculate a discount equal to a percentage of the subtotal. If you omit the percentage symbol, QuickBooks assumes you want a dollar discount and not a percentage discount. In Figure 2, for example, omitting the percentage symbol would turn the 25% discount into a $25 discount.

  5. Use the Customer Message box at the bottom of the Create Invoices window to supply a customer message that appears at the bottom of the invoice.

    If you've created a custom invoice form template that includes other footer information, these footer boxes also appear at the bottom of the Create Invoices window. You can use them to collect and transfer additional footer information.

  6. (Optional) Check your spelling.

    If you click the Spelling button, which appears along the top edge of the Create Invoices window, QuickBooks checks the spelling of the words that you've used on the invoice. If QuickBooks finds no spelling errors, QuickBooks displays a message telling you that the spelling check is complete. If QuickBooks finds a spelling error — product code abbreviations often produce spelling errors in QuickBooks — QuickBooks displays the Check Spelling on Form dialog box, shown in Figure 2.

    Figure 3: The Check Spelling on Form dialog box

    You can use the Change To box to correct your spelling error — if it actually is a spelling error. You can select one of the suggested replacements from the Suggestions list box by clicking the suggestion and then clicking the Replace button. You can replace all occurrences of the misspelling by clicking the Replace All button. If the word that QuickBooks says is misspelled is actually correctly spelled, you can click the Ignore button to tell QuickBooks to ignore this word or the Ignore All button to tell QuickBooks to ignore all occurrences of this word on the invoice form.

    If you use terms that are always popping up as misspelled words, at least in QuickBooks, you can click the Add button that appears on the Check Spelling on Form dialog box. Clicking the Add button tells QuickBooks to add the word to its spelling dictionary. After you've added a word to the QuickBooks spelling dictionary, QuickBooks doesn't see the word as misspelled. Also note that you can click the Options button to display the Spelling Options dialog box. The Spelling Options dialog box includes check boxes that you can use to turn on or Off certain types of spell checking logic. For example, the Spelling Options dialog box includes a check box that you can select to tell QuickBooks to always check the spelling of forms before printing, saving, or sending the form. The Spelling Options dialog box also includes check boxes to tell QuickBooks it should ignore certain sorts of words, such as those that use numbers, those that are all uppercase, and those that are mixed case.

  7. Click either the Save & Close button or the Save & New button to save your invoice.

    Click the Save & Close button if you want to save the invoice and close the Create Invoices window. You use the Save & New button if you want to save the invoice and then enter another invoice into the blank version of the Create Invoices window.


    Click the Ship button to display the QuickBooks Shipping Manager window, which lets you automate some of the steps in shipping packages using Federal Express or UPS. If you use Federal Express or UPS, therefore, you may want to experiment with this tool.


    One internal control problem within QuickBooks that I hear CPAs complain about over and over is that QuickBooks allows someone to print a form without saving it. This seems innocuous enough, but this little idiosyncrasy can cause serious problems for a business owner. Here is why this "printing without saving" option becomes dangerous: A dishonest employee can create an invoice form, print the invoice form, send the invoice form to a customer, and then not save the invoice form. At this point, a customer has what appears to be a valid invoice from your firm and probably will pay that invoice. If the nefarious employee can intercept the check that pays that invoice, he can then deposit that check into a personal checking account, and you are none the wiser.

    In order to prevent or at least minimize this opportunity for employee theft, you want to separate the capability to create an invoice form from the capability to print an invoice form. . In this scenario, by the way, the people who create invoices (such as sales people or accounting clerks) don't actually print invoices. Somebody else — perhaps even you, the owner — prints the invoices and then arranges to have them distributed. Also note that you can use QuickBooks' e-mail invoices and batch printing to greatly simplify the work of sending out invoices. So you aren't actually creating that much extra work for yourself.


    To page through invoices that you've already created, click the Previous and Next buttons. Or, click the Find button and use the Find Invoices dialog box to describe the invoice that you want to locate.

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