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jeremym1977
November 18, 2024
Solved

Grants & Invoicing

  • November 18, 2024
  • 12 replies
  • 85 views

Hello all.. 

We receive a $75000 grant each year but they require a monthly invoice to pay us our monthly payment. I booked the whole amount when we were awarded the grant. However, when I set up a recurring invoice, it increases the total 'income' for the grant. How do I make the invoices and not increase the total amount awarded? 

Thanks!

Best answer by Rainflurry

So I have 2 revenue accounts for grants (foundations or government) where all revenue is booked. I keep track of the individual grants through 'Projects'. 

 

I have a 'Product' set up as 'foundation grants' and one as 'government grants'. When I booked this $75000 grant it was to the specific client and under the project attached to that as a 'government grant' product. These products all go into the main Receivables account.

 

When I create an invoice, in order for it to be attached to the same client/project and the same grant category I use the same 'product' but this is what is creating the issue. I don't know how to do this, hope I'm making sense in my explanation. 


@jeremym1977 

 

Yep, that makes sense.  So, when you originally recorded the grant, you have $75K in grant revenue on your P&L and the offsetting $75K in accounts receivable on your balance sheet, correct?

 

If so, then IMO, the easiest way to handle this is to create a $6,250 credit memo each month dated the same day as you issue the invoice to the grantor.  Use the same Government Grant product on the credit memo that you used on the original invoice and will use on each monthly invoice.  Immediately after creating the credit memo, apply it to the outstanding receivable balance using New > Receive payment.  The purpose of the credit memo is to reduce A/R and the $75K in grant revenue by $6,250 so that the monthly invoice doesn't add to your totals.   After you receive payment on the monthly invoice, your A/R balance should be reduced by $6,250 and your revenue should always remain at the original $75K. 

12 replies

continea
Level 5
November 18, 2024

Hello jeremym1977,

 

Welcome to the QuickBooks Community! In cases like this, you would need to turn off the pricing rule and adjust any existing or recurring invoices to be updated manually. Let me guide you on how:

 

1. Go to Gear Icon and select Account and Settings.
2. Select the Sales tab.
3. In the Products and services section, select Edit.
4. Select the Turn off price rules Beta checkmark.
5. Select Save and then Done.

 

If your pricing rule is turned off already, let me know so we can investigate further. I will be looking out to your response! See you around. 

 

jeremym1977Author
November 18, 2024

That is already turned off for me.

 

What happened is that I booked the $75000 and now every month the invoice I have to send to get paid $6250 adds that amount to the original $75000. Not sure how to make an automatic invoice go out each month but not add to the total of the grant. 

KimberlySModerator
Moderator
November 18, 2024

When I go into my recurring invoice that I have already set up that is already unticked so I'm not sure what is going on. The reason this is now an issue is that in the past I would only record the monthly income and not the entire grant at the beginning when we received the award. Now our auditor want us to book it at the beginning but the grantor wants a monthly invoice in order to pay us. 

 


The total income for the grant increases if the income account used when recording the entire grant is the same as the associated account of the item on an invoice, Jeremy. I'll provide the details to guide you on the right track.

 

To prevent your invoices from adding to the total grant income, you can change the account you used when recording the entire grant or the account associated with the item used in the invoice. If you want to revise the grant transaction, proceed to these steps:

 

  1. Head to Transactions in the left pane.
  2. Select Chart of accounts, then locate the account you need to review.
  3. Click View register from the Action column.
  4. Utilize the Filter icon to seamlessly locate the entry. You can also look for it by amount, reference number, or memo through the Find field.
  5. Select the transaction and make the necessary changes. Pick Edit if you need to modify details in the grayed-out sections.
  6. Hit Save or Save and close.

 

 

Otherwise, refer to this material to update the item: Change the account for a product or service item in QuickBooks Online.

 

Moreover, I recommend seeking guidance from an accountant for the appropriate account when entering the grant and the item used for invoicing. You'll want to visit this link to look for an accounting professional if you don't have one yet: Find an Expert QuickBooks ProAdvisor Near You | Intuit.

 

Furthermore, you might want to scan these resources for guidance on recording and receiving customer payments, depending on the payment method:

 

 

Kindly leave a message in this thread for other questions regarding recording grants in QuickBooks Online. We're always here to help when the needs arise.

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