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.

Wednesday, May 27, 2009

Working with the Layout Designer Tool | Invoice Form

Okay. Perhaps you've used the Basic Customization dialog box to make some changes to your invoice's appearance. And you haven't been satisfied. Maybe you've gone the extra mile and noodled around with the Additional Customization dialog box to make further changes. And maybe even that hasn't left you happy with the appearance of your invoice.

Do you have any additional recourse? Are you stuck with an invoice that doesn't look right? That doesn't work for your organization? Heck no!

If you click the Layout Designer button, which is available in both the Basic Customization and Additional Customization dialog boxes, QuickBooks displays the Layout Designer window, as shown in Figure 1. The Layout Designer window lets you move invoice information around on the actual printed invoice. Your best bet for learning to work with the Layout Designer tool is to experiment with it. My recommendation is that you create an example invoice form template — something you don't really care about — and then use this new invoice form template for some goofing around.

Figure 1: The Layout Designer window

Here are some of the things that you may want to try:

  • Moving and resizing objects: You can move and resize objects on the form pretty easily. To move some bit of the form, first select the bit by clicking it. Then use the arrow keys or drag the mouse to move the selected bit. You can resize the selected bit in a similar way. Resize the selected object by dragging the black squares (called resizing handles) that show the object is selected. When moving and resizing invoice form objects, keep two points in mind:

    • You can select the Show Envelope Window check box to have QuickBooks draw envelope windows on the invoice form to show you where these appear. You want to have envelope windows shown to make sure that your customized invoice still has its address information showing through.

    • You can click the Grid button to display the Grid and Snap Settings dialog box. This dialog box provides two check boxes where you can indicate whether QuickBooks should use a grid (those are the dots you see) to more accurately line up invoice objects on the form. The Grid And Snap Settings dialog box also includes a Snap To Grid box so you can tell QuickBooks that it should make gridlines sticky — sticky gridlines automatically attract invoice objects so that you can more easily line up the objects against the gridlines. The Grid And Snap Settings dialog box also includes a Grid Spacing box that you can use to specify how wide or narrow QuickBooks should draw gridlines.

  • Selecting objects: You can select multiple objects on the invoice by dragging the mouse. To do so, click at a point above the upper-leftmost object that you want to select and drag the mouse to a point that is just below the lower-rightmost object that you want to select. As you drag the mouse from one corner to the other, QuickBooks draws a rectangle. Any object that's inside this rectangle when you release the mouse gets selected.

  • Resizing multiple objects: You can change the height, width, and size of multiple selected objects by clicking the Make Same Width, Make Same Height, and Make Same Size buttons. To use these Make Same buttons, you first select the objects that you want to make the same.

  • Changing column widths: You can change the width of columns in the column area of the invoice form by clicking the Column object. After you do this and QuickBooks selects the columns area, drag the column divider line left or right to resize the column. Note that if you make column 1 narrower, QuickBooks makes column 2 wider to take up the space. Also note that you can resize the entire column area in the manner described in the preceding point.

  • Positioning text within fields: If you click an invoice object and then click the Properties button, QuickBooks displays the Properties dialog box, shown in Figure 2. The Properties dialog box includes a Text tab that lets you specify how text should appear within an invoice object area. The Properties dialog box also includes a Border tab that lets you specify whether QuickBooks should draw a border along the edges of the invoice object.

    Figure 2: The Properties dialog box

  • Changing fonts: You can change the font used for the selected object by clicking the Properties button, clicking the Text tab of the Properties dialog box, and then clicking the Font button that appears on this tab. QuickBooks displays the Example dialog box. The Example dialog box lets you choose a font; font style; a point size; and special effects, such as strikeout, underlining, and color.

  • Adjusting margins: If you click the Margins button, QuickBooks displays the Margins dialog box, which includes a Top, Bottom, Left, and Right text box that you use to specify the margin around the invoice. The default or initial margin settings equal half an inch.


Center a selected object on an invoice form by clicking the Center button to activate the Layout Designer. You can click the Zoom In and Zoom Out buttons to see more or less detail. If you want to undo your most recent change, click Undo. Or, click the Redo button to undo your last undo option.

After you use the Layout Designer to make whatever changes are appropriate to your new invoice form template, click OK to save your changes.

Tuesday, May 26, 2009

Reviewing the Additional Customization Options | Invoice Form

If you can't create invoices that look exactly the way you want using the options available, your next step is to click the Additional Customization button. QuickBooks displays the Additional Customization dialog box, as shown in Figure 1. This dialog box gives you more control over both the information that appears on your invoices and how invoices print. You can't use the Additional Customization button if you're working with one of the default invoice templates — only if you're working with a copy. Accordingly, QuickBooks may prompt you to make a copy of an invoice template when you click the Additional Customization button.

Figure 1: The Header tab of the Additional Customization dialog box

Specifying Header Information

The Header tab of the Additional Customization dialog box (see Figure 1) lets you specify what information goes on the top portion of the Create Invoices window and in the top area of an actual printed invoice form. This information is called the header and provides the invoice number, the invoice date, and the billing and shipping information. You can also choose how information is labeled by filling in or editing the contents of the text boxes. For example, the Default Title check boxes let you specify whether the form title should appear on the screen version of the invoice (this would be inside the Create Invoices window) and on the printed version of the invoice. The Default Title text box lets you specify what the form title should be. In a similar fashion, the Date check boxes let you specify whether the date should appear on the screen and print versions of the invoice and what label should be used to describe the invoice date. Figure 1, as you can see, uses the clever descriptive text Date for this invoice date information.


If you don't need a particular piece of information on an invoice, leave the Screen and Print check boxes for that bit of data deselected. This tells QuickBooks that it should not include that piece of header information on the window or print version of the invoice form.

Specifying Columns Information

The columns portion of an invoice describes in detail the items for which an invoice bills. For example, product invoice columns describe the specific products, including price and quantity; they also describe the items being invoiced. A service invoice's columns describe the specific services being billed. As you may guess from looking closely at Figure 2, the Columns tab of the Additional Customization dialog box looks like the Header tab. You use the Screen and Print check boxes to indicate whether a particular piece of column-level information should appear as a column on the Create Invoices window or on the actual created invoice. Similarly, you use the Title text boxes to provide the descriptive labels that QuickBooks uses on the Create Invoices window and on the printed invoice form.

Figure 2: The Columns tab of the Additional Customization dialog box

The only unusual option shown on the Columns tab is the Order text boxes (see Figure 2). The Order boxes let you indicate in what order (from left to right) the column should appear. If the item number or code should appear in the first column on the left, for example, you enter the value 1 in the Item Order box.

Specifying Prog Columns Information

The prog columns portion of an invoice provides information relevant to situations where you're using progress billings. You can click the Prog Cols tab to add and remove information such as the ordered amount, the previously invoiced amount, and any backordered amounts.


The Header, Columns, and Prog Cols tabs let you make changes to your invoice forms, but don't get too tense about making perfect changes the first time. You can easily see exactly how your changes look by using the Preview box (if your eyesight is better than mine) or by clicking OK and then carefully reviewing the new version of the Create Invoices window. If you realize that you've made an error — perhaps you've used the wrong bit of descriptive text or you've incorrectly ordered the columns — you can customize your invoice again and thereby fix your earlier mistakes.

Specifying Footer Information

The Footer tab of the Additional Customization dialog box lets you specify what information appears on the Create Invoices window beneath the columns area and on the actual printed invoice beneath the columns area. As Figure 3 indicates, the footer information includes a customer message, the invoice total, payments and credit information, a balance due field, and, optionally, a longer text box. You work with the Footer tab in the same manner as you work with other tabs. If you want some bit of information to appear, select the Screen check box and the Print check box. To change the bit of text that QuickBooks uses, edit the contents of the Title text box.

Figure 3: The Footer tab of the Additional Customization dialog box

Specifying Print Information

The Print tab of the Additional Customization dialog box, shown in Figure 4, lets you exercise a bit of control over how QuickBooks prints invoices that use the template you've customized. For example, the radio buttons at the top of the tab let you specify that when printing this particular invoice template, QuickBooks should use the regular old invoice printer settings or, alternatively, that it should use other, special print settings. The Print settings also let you tell QuickBooks how it should number the pages of a multiple-page invoice.

Figure 4: The Print tab of the Additional Customization dialog box


You can return all the customized invoice settings to their default condition by clicking the Default button. When you do this, however, you remove any changes or customizations that you've made.

Monday, May 25, 2009

Specifying How Sales are Taxed

Although no personal preferences are available for sales tax, company preferences do exist. Figure 1 shows the Company Preferences tab for the Sales Tax Preferences set. The Do You Charge Sales Tax? radio buttons, which appear at the top of the tab, control whether you can charge sales tax within QuickBooks. You select the radio button — Yes or No — that answers the question.

Figure 1: The Company Preferences tab of the Sales Tax Preferences dialog box

The Taxable Item Code and Non-Taxable Item Code drop-down lists let you define what code QuickBooks should use to identify taxable and non-taxable sales. By default, QuickBooks uses the clever "tax" code for taxable sales and the equally clever "non" code for non-taxable sales. However, you can select the Add New entry from either drop-down list and use the dialog box that QuickBooks displays to create your own taxable and non-taxable codes.

The Set Up Sales Tax Items and Assign Sales Tax Codes boxes let you set up an item for the sales tax that you charge on invoices. You can indicate the default (or most common) sales tax item that you want to include by entering this sales tax item name into the Your Most Common Sales Tax Item drop-down list. To add the sales tax item, select the Add New entry from this drop-down list and complete the dialog box that QuickBooks displays. The New Item dialog box lets you name the sales tax item and identify the sales tax rate.


You can also add a new sales tax item by clicking the Add Sales Tax Item button.

The Taxable Item Code and Non-Taxable Item Code drop-down lists let you select the code words to designate invoice items as subject to sales tax. The Mark Taxable Amounts With "T" When Printing check box, if selected, tells QuickBooks to flag taxable amounts on an invoice with the code T.

The When Do You Owe Sales Tax? radio buttons let you indicate when the taxing authority says you owe sales tax: as of the invoice date (which means the taxing authority requires accrual-basis accounting) or upon receipt of payment (which means the taxing authority allows cash-basis accounting).

The When Do You Pay Sales Tax? radio buttons (Monthly, Quarterly, and Annually) let you tell QuickBooks how frequently you must remit sales tax amounts. You select the radio button that corresponds to your sales tax payment frequency.

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