Notes Receivable and Invoicing in QB Desktop

Hi, @Skypilot65.

I'd be glad to help you manage note receivables and invoicing in QuickBooks Desktop.

To achieve your goal, you can set up and use the progress invoicing that allows you to split estimates into as many invoices as you want. This lets you invoice your customers monthly for their payments.

As you complete work, add items from the initial estimate to progress invoices. This keeps project payments organized and connected from start to finish. Once ready, you can follow the process below.

First, enable the progress invoicing feature if you haven't already. Here's how:

1. From the File menu, select Switch to Single-user mode.
2. Go to the Edit menu and click Preferences.
3. Select Jobs & Estimates from the list of menus.
4. Select the Company Preferences tab.
5. Tick Yes in the DO YOU CREATE ESTIMATES? section. Then select Yes in the DO YOU DO PROGRESS INVOICING? section.
6. Hit OK to save and close your preferences.
7. Return to the File menu and select Switch to Multi-user mode if you need to.

Once done, create invoices from your estimates by following Step 2 in this article: Set up and send progress invoices in QuickBooks Desktop. This includes the following detailed process.

For future reference, I have an article to help you account for your customer payments: Receive invoice payment.

Feel free to revisit the Community if you have more questions about invoices or other QBDT-related tasks. I'm determined to help you succeed. Keep safe always.

Hi @Carneil_C ,

I appreciate the reply but I don't know that doing estimates/quotes and then invoicing those progressively solves the problem. Let me explain:

I have two defined items in my list that have to be on each invoice "Monthly Interest" which is assigned to the account "Interest Income" and is defined as an income account, and "Monthly Principal" which is assigned to the "Loan - Customer 1" account (an other asset). The "Monthly Interest" must be accumulated in the account "Interest Income" on an annual basis. The "Monthly Principal" must be deducted from the "Loan - Customer 1" asset account. The problem is that the invoice total is deducted from the asset account. 

Example:

Interest = $500

Principal = $100

Invoice Total = $600

"Loan - Customer 1" account starts with $100,000 is reduced by $600 that results in $99,400, not the principal amount $100 which should result in $99,900.

I can't be the only person who using QB and doing seller financing (acting as the bank on a mortgage) on a property that was recently sold. Each month the principal and interest values change based on the amortization schedule and need to be invoiced accordingly, even though the total monthly payment remains the same.

Thanks.

Hi @Carneil_C ,

I'm not sure how using quotes/estimates and progressive invoicing solved the problem. Let me explain.

I recently sold a property and I am doing seller financing (acting like the bank for a mortgage) with the buyer. I need to track the principal and interest in separate accounts but send a single invoice each month with different values for the principal and interest amounts, although the monthly total is the same each month. I created two different service items for the invoice, one for the principal which is assigned the "Loan - Customer 1" account defined as an other asset, the item is called "Monthly Principal". The other item is called "Monthly Interest" which is assigned to "Interest Income" an income account.

The problem:

When I put both items on the invoice with dollar values for each, the total of the invoice reduces the "Loan - Customer 1" account by the invoice total amount not just the principal amount as it should.

Expected Result:

"Loan - Customer 1" account should be reduced by the principal amount

"Interest Income" should be increased by the interest amount

I hope this make sense as I can't be the only one out there doing this. Thanks.

Hello there, Skypilot65.

I understand your frustration with the invoicing issue you're experiencing in QuickBooks Desktop (QBDT).

To fix this, let's double-check the account setup in QBDT. It seems like the interest is a sub-account of the monthly account, causing it to display six hundred total instead of five hundred.

If so, let's remove the sub-account from the parent account. I'll guide you on how to do it.

1. Go to the Accountant menu and select Chart of Accounts.
2. Locate the sub-account that you want to remove and right-click on it.
3. Select Edit Account.
4. Uncheck the Subaccount of box.
5. Hit Save & Close.

You can also check this link to learn more about handling the chart of accounts in QuickBooks: Add, edit, or delete accounts.

Since you've been handling invoices regularly, here's an article to help you customize their appearance by including only necessary fields for improved business communication: Use and customize form templates.

Let me know if you have other questions about your invoices in QuickBooks. I'm always here to help. Take care.

Hi @Maybelle_S,

"Interest Income" is not a sub-account, it is a primary "Income" account.

Thanks.

Thank you for explaining the note receivable and invoicing account setup in QuickBooks Desktop, @Skypilot65. You've put a lot of effort into structuring the accounts and listing items for the seller financing arrangement. 

To further assist you, I recommend verifying the Monthly Interest item's account to ensure it's linked to the correct income account. If the account association is correct, the issue may be related to the data in your QuickBooks file. 

I suggest running the verify and rebuild tool to check for and resolve any data-related issues that could be affecting the application of line items in your invoices. This process can identify and fix data integrity issues that may be causing unexpected behavior in your QuickBooks file.

Here are the steps to verify your company data: 

1. Select Utilities from the File menu.
2. Tap on Verify Data. If you see:

• QuickBooks detected no problems with your data. Your data is clean, and you don’t need to do anything else.
• An error message, search for it on our QuickBooks Desktop support site for how to fix it.
• Your data has lost integrity. Data damage was found in the file. Rebuild your data to fix it.

Check out this article for a step-by-step guide on rebuilding your company file data: Verify and Rebuild Data in QuickBooks Desktop.

I'm also including this material to learn more about the various methods of tracking customer transactions in QBDT: Get started with customer transaction workflows in QuickBooks Desktop.

If you have additional questions about invoices or any other QuickBooks Desktop tasks, don't hesitate to reach out to the Community. I'm dedicated to helping you succeed. 

Hi @AbegailS_,

The item "Monthly Interest" account is assigned to "Interest Income". The item "Monthly Principal" account is assigned to "Loan - Customer 1".

The utility to verify the data found no problems.

This seems to be an issue where the items included on the invoice are not being appropriately applied to the correct accounts. A bug???? This is very frustrating as even Quicken can do this simple task easily, its called "Splits".

Thanks.

Thank you very much for solving the mystery!