Closing an invoice for work that has already been paid for

MaloriN · ‎July 29, 2020

In 2019, a client paid a lump sum amount for a "bucket of hours" for work to be performed at a later date. That amount was invoiced to the client, the client remitted a check, and the invoice was closed.

Fast forward to this year, we are creating invoices for the hours worked against this particular project, but I'm not sure how to close these invoices out in QBO. Because the original invoice was paid, there are no funds in a/r that I can match to these new invoices. Is a credit memo the right way to go? A sales receipt? I don't want these invoices to count toward our revenue since they have already been paid for.

Thank you!

Rubielyn_J · ‎July 29, 2020

Hello there, @MaloriN.

Let me sort things out for you. You should have recorded the advance payment by creating a liability account. This is to track the amount of the retainers you receive from your customers.

Since you have already made the transaction, you have two options to fix this. First, is to delete all transactions and record a retainer or deposit.

If you don't wish to delete any transactions, you can follow the second option. To do this, you can add those time/hours work to an invoice with a zero amount, for it does not generate an income.

In case you need to view Retained Earnings account details, feel free to check this article: How to view Retained Earnings account details.

Don't hesitate to write a comment below if you need further assistance. I'm more than happy to help. Have a great day.

View solution in original post

Rubielyn_J · ‎July 29, 2020

Hello there, @MaloriN.

Let me sort things out for you. You should have recorded the advance payment by creating a liability account. This is to track the amount of the retainers you receive from your customers.

Since you have already made the transaction, you have two options to fix this. First, is to delete all transactions and record a retainer or deposit.

If you don't wish to delete any transactions, you can follow the second option. To do this, you can add those time/hours work to an invoice with a zero amount, for it does not generate an income.

In case you need to view Retained Earnings account details, feel free to check this article: How to view Retained Earnings account details.

Don't hesitate to write a comment below if you need further assistance. I'm more than happy to help. Have a great day.

MaloriN · ‎July 30, 2020

Thank you for your reply!

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Closing an invoice for work that has already been paid for