Deductions on Invoices by customer

AT014 · ‎August 22, 2023

My customer pays me through direct deposit, however there are charges they automatically deduct from my invoice for the use of their equipment and for parking. When the direct deposit comes through the amount already reflects the deductions they made, but how do I properly process that on quickbooks online.

My invoice no longer can be matched to my transactions without adjusting the invoice and how do I track the deductions as they technically never come out of my bank account.

RoseJillB · ‎August 22, 2023

I know a way to match your invoice to your bank transactions in QuickBooks Online (QBO), @AT014.

Since there are charges incurred to the transaction, the option to directly match them to deposits won’t be available. That said, we can record the invoice payments and post them to the Undeposited Funds.

Once done, we can manually create a bank deposit to move the amount to its respective account. When creating a bank deposit, make sure to add the charges incurred in the Add funds to this deposit section to match this to transactions from your bank feeds. Here’s how:

Tap the + New icon and select Bank Deposit.
Under Select the payments included in this deposit section, mark check the invoice you recently recorded the payment.
In the Add funds to this deposit dropdown, enter the deductions made or the charges incurred. Since these are a deduction from the original amount of the invoice, you can enter them in a negative (-) amount.
Enter the additional details you have and make sure to select an Account from its respective column. If you’re unsure, you can consult your accountant for guidance.
Then, click Save and new.

After that, let’s go back to your bank feeds to match the deposit from there to what you have recorded in QBO. I’ll show you how:

In the For Review tab, locate the deposit and tap this to expand.
Click the Find Match radio button to drill down all possible matches.
From the Match transactions window, filter the dates that cover when you received or recorded the amount.
Under the Suggested Matches, locate the deposit you recently recorded and mark it check.
Lastly, click Save.

You can also consider consulting your account for other ways of recording the transactions.

Furthermore, learn to reconcile your account to keep your books accurate and prevent discrepancies.

Let me know if you have more concerns about linking bank transactions. The Community is 24/7 available to help. Have a good one!

View solution in original post

JaeAnnC · ‎September 15, 2023

I appreciate you for getting back to us, AT014. Let's figure out the reason behind the discrepancy in your Income Statement after creating a bank deposit in QuickBooks Online (QBO).

You're already on the right path in tracking the deductions on the invoice. However, let's specify which account to use in creating the bank deposit so it will post appropriately in your Income Statement.

Since the deduction is from equipment rental and parking from your customer, it can be considered an expense. That said, let's edit the bank deposit you created and record it in the appropriate Expense account.

Here's how:

Go to the Gear icon and select Chart of Accounts.
Locate the bank account where you deposited the payment and click View Register.
Select the bank deposit and click Edit.
In the Add funds to this deposit section, choose an Expense account under the Account column.
Click Save and Close.

However, if your customer bills you for it, utilize the Accounts Payable and link the deposit to pay the bill.

Additionally, I'm sharing an article that contains the steps to take if you encounter discrepancies after reconciling an account in QBO: Fix issues at the end of a reconciliation in QuickBooks Online.

You're always welcome to get back to us whenever you have any follow-up queries about tracking your invoice deductions in QBO. I'm always more than willing to lend you a hand. Stay safe and have a wonderful rest of the day!

View solution in original post

RoseJillB · ‎August 22, 2023

I know a way to match your invoice to your bank transactions in QuickBooks Online (QBO), @AT014.

Since there are charges incurred to the transaction, the option to directly match them to deposits won’t be available. That said, we can record the invoice payments and post them to the Undeposited Funds.

Once done, we can manually create a bank deposit to move the amount to its respective account. When creating a bank deposit, make sure to add the charges incurred in the Add funds to this deposit section to match this to transactions from your bank feeds. Here’s how:

Tap the + New icon and select Bank Deposit.
Under Select the payments included in this deposit section, mark check the invoice you recently recorded the payment.
In the Add funds to this deposit dropdown, enter the deductions made or the charges incurred. Since these are a deduction from the original amount of the invoice, you can enter them in a negative (-) amount.
Enter the additional details you have and make sure to select an Account from its respective column. If you’re unsure, you can consult your accountant for guidance.
Then, click Save and new.

After that, let’s go back to your bank feeds to match the deposit from there to what you have recorded in QBO. I’ll show you how:

In the For Review tab, locate the deposit and tap this to expand.
Click the Find Match radio button to drill down all possible matches.
From the Match transactions window, filter the dates that cover when you received or recorded the amount.
Under the Suggested Matches, locate the deposit you recently recorded and mark it check.
Lastly, click Save.

You can also consider consulting your account for other ways of recording the transactions.

Furthermore, learn to reconcile your account to keep your books accurate and prevent discrepancies.

Let me know if you have more concerns about linking bank transactions. The Community is 24/7 available to help. Have a good one!

AT014 · ‎September 01, 2023

I followed all the steps but now I am left with a discrepancy on my Income Statement. How do I resolve that? Through the reconciliation.

Rea_M · ‎September 01, 2023

Thanks for the update, AT014.

You may have adjusted the invoice amount while receiving the payment. That's why you have a discrepancy in your income statement. With this, you can delete the said payment and record one with the full amount to resolve the difference and reconcile your account accordingly. I'll guide you through the process below.

There's no need to adjust the invoice amount while recording its payment since the charges incurred will be added in the Add funds to this deposit section while creating a bank deposit. This way, you can match it to the downloaded transaction from your bank feeds.

To correct the discrepancy, you'll first have to delete or void the invoice payment, and then next is the deposit (go to your account's register to do so).

To delete or void the invoice payment, here's how:

Go to Bookkeeping, then select Transactions or the Sales menu.
Select All Sales.
Find the invoice payment that you want to void or delete.
In the Action column, click the dropdown ▼, then select Void or Delete. You can also open the payment and select the More option below to choose whether to Void or Delete.
Select Yes to confirm.

After deleting or voiding the invoice payment and deposit, re-create the Receive payment transaction. Then, record a bank deposit and match it to your bank feed transaction. Please see the steps outlined by my colleague above to complete the process.

Once everything is all set, reconcile your account. I encourage you to do this regularly (every month) to monitor your income and expense transactions and detect possible errors accordingly. To guide you in doing and fixing reconciliations in QBO, you may want to check out this article: Reconcile workflow in QuickBooks.

I'm all ears if you have other banking and reconciliation concerns or questions about managing transactions in QBO. You can drop a comment below, and I'll gladly help. Take care, and have a great day, AT014.

AT014 · ‎September 15, 2023

I left the invoices at the original amount that was invoiced. I am not sure where my error is.

JaeAnnC · ‎September 15, 2023

I appreciate you for getting back to us, AT014. Let's figure out the reason behind the discrepancy in your Income Statement after creating a bank deposit in QuickBooks Online (QBO).

You're already on the right path in tracking the deductions on the invoice. However, let's specify which account to use in creating the bank deposit so it will post appropriately in your Income Statement.

Since the deduction is from equipment rental and parking from your customer, it can be considered an expense. That said, let's edit the bank deposit you created and record it in the appropriate Expense account.

Here's how:

Go to the Gear icon and select Chart of Accounts.
Locate the bank account where you deposited the payment and click View Register.
Select the bank deposit and click Edit.
In the Add funds to this deposit section, choose an Expense account under the Account column.
Click Save and Close.

However, if your customer bills you for it, utilize the Accounts Payable and link the deposit to pay the bill.

Additionally, I'm sharing an article that contains the steps to take if you encounter discrepancies after reconciling an account in QBO: Fix issues at the end of a reconciliation in QuickBooks Online.

You're always welcome to get back to us whenever you have any follow-up queries about tracking your invoice deductions in QBO. I'm always more than willing to lend you a hand. Stay safe and have a wonderful rest of the day!

AT014 · ‎September 16, 2023

Good afternoon, I figured out what the problem was. My income statement shows the income before deductions and I was comparing it to the income after deductions which is why I kept getting a discrepancy. Thank you so much for all your help.

Topics

Training

Community

Resources

Deductions on Invoices by customer