How do I enter installment payments for merchandise I sold?

Hello, 

Tracking installment payments for your merchandise is a common structure for small businesses. It's important that your accounting program can accommodate this type of transaction. Luckily, QuickBooks Online makes this process easy with Progress Invoicing! I'd be happy to elaborate on what this is and how to use it. 

Progress invoicing allows you to divide an estimate into multiple invoices. Instead of asking for full payment at the beginning of a project or sale, you're able to invoice your customers in partial payments as you go. For you, this may be 6 installments of $1000 as you've explained above. 

To turn on progress invoicing, follow these steps:

1. Click the Gear icon.

2. Select Account and Settings. 

3. Click Sales. 

4. In the Progress Invoicing section, click the small pencil icon to edit. 

5. Select the Create multiple partial invoices from a single estimate checkbox. 

6. Click Save and Done. 

Take a look at this helpful article for more information on how to create a progress invoice: Set up and send progress invoices in QuickBooks Online.

This document should have all the information you need to get back to business. If you have any other questions, let me know.

Cheers!

Thanks for the information on progress invoicing, but it's not relevant to my question. My client doesn't use estimates, and we don't do progress billing. For example, we sell an item for $250 OR for three equal payments of $100.  If someone chooses the payment plan, I want to record the $300 sale, record the $100 first payment, and leave the other $200 in AR with the payment schedule. Not sure that's possible. Any ideas? 

Do you have webstore to offer your product? And do you want to offer your customer with 2 payment plan (e.g full or installment) everytime they want to place order?

Instalment sales needs the VAT and tax to be recognised day 1 so the entire amount needs to be invoiced on date of sale.  Payment terms need to be captured and tracked against customer receipts.

Pretty basic functionality but hard to find in small accounting packages.

Anyone know of accounting software that does this please let me know at [email address removed].

Thanks.

Invoice Ninja does this

I'm looking for a solution in regards to eCommerce. We use Shopify and some customers choose the Shopify Installments option at checkout. I know the Commerce app records the full transaction on the Sales Order in QB, but the actual payments come in 4 split payments. Should I be recording these to an Accounts Receivable account or a Clearing account? What would be the best practice here?

Hi there. Glad to have you connect with us here. In order to record your transactions the right way, I recommend consulting an accounting specialist for expert advice. This ensures your books remain accurate while you continue to manage your work with peace of mind. You can also get in touch with a professional using this link here. Other accounting professionals are able to see this post in the Community and this will allow them to chime in. 

Let me know if this info helps. I'm here to steer you in the right direction