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Community Contributor *

Using the invoice screen, is there an option to move the amount from Customer Deposits to our bank asset account?

Hello all. I'm pretty new to Quickbooks Online and have a question about how it handles this situation:

 

1) Customer makes a purchase off our website and pays with PayPal.

2) We tranfer the money (less PP fees) from PP to our bank account.

3) Since we have not yet shipped, we record the amount in Customer Deposits (liability account)

4) When we do ship, we generate the invoice.

The problem is can we, using the invoiced screen, do something that will move the amount from Customer Deposits to our bank asset account? Currently we're doing it via journal entry, but there MUST be a better way. There must, right?

 

Any help would be appriciated.

 

Thanks.

 

 

(Title has been edited by moderator for clarity)

Solved
Best answer 09-05-2017

Accepted Solutions
Established Community Backer ***

Re: PayPal, Customer Deposits, and applying to Invoices

That does help, thanks!

 

You can apply that pre-existing deposit to the invoice by following these steps: 

 

  • Create the invoice using the same customer info as the deposit, and then Save and Close
  • Navigate to the Sales tab, and click Customers at the top. 
  • Choose the customer the invoice was created for, and then locate the invoice you just created. 
  • On the right side of that invoice's column, click Receive Payment
  • Under the Credits section, you can use select the deposit using the box on the left. 
  • Once you've chosen the deposit, click Save and Close
  • If you still need the customer to pay off the rest of the invoice, you can go back to the customer's page, locate the invoice, and click Send under the drop down arrow on the right. 

If you have any questions, please reach back out and let me know. I'm always happy to lend a hand.

13 Comments
Established Community Backer ***

Re: PayPal, Customer Deposits, and applying to Invoices

Hi ceamba, 

 

First of all, welcome to the QuickBooks family! I'd be happy to help you with the invoicing process. 

 

I'd like to clarify a few things before we get started. 

  • Do you have PayPal connected to QuickBooks Online at all? This can be done either through the automatic bank connection, or by connecting the 3rd party PayPal app. 
  • Is your business bank account connected to the program? If so, are you adding the customer deposit through the banking screen, or are you doing so manually? 

 

There are a few ways we can record this exchange, so I look forward to your reply.

Not applicable

Re: PayPal, Customer Deposits, and applying to Invoices

Hi Alicia. (This is ceamba, btw).

 

At this time, we do not have PayPal or the bank accounts hooked up directly to QBO. I'm mostly just look for what to do once we have transfered the PP money to our bank and then record the increase in customer deposits then later invoice the customer...how to easily assign the pre-existing deposit to the specific invoice as a payment on that invoice.

 

Hope that clears it up a bit.

-Christopher

Established Community Backer ***

Re: PayPal, Customer Deposits, and applying to Invoices

That does help, thanks!

 

You can apply that pre-existing deposit to the invoice by following these steps: 

 

  • Create the invoice using the same customer info as the deposit, and then Save and Close
  • Navigate to the Sales tab, and click Customers at the top. 
  • Choose the customer the invoice was created for, and then locate the invoice you just created. 
  • On the right side of that invoice's column, click Receive Payment
  • Under the Credits section, you can use select the deposit using the box on the left. 
  • Once you've chosen the deposit, click Save and Close
  • If you still need the customer to pay off the rest of the invoice, you can go back to the customer's page, locate the invoice, and click Send under the drop down arrow on the right. 

If you have any questions, please reach back out and let me know. I'm always happy to lend a hand.

Established Community Backer ***

Re: PayPal, Customer Deposits, and applying to Invoices

You are correct, that you don't want Manual journal entries; you need this all to be part of Customer and Sales reporting.

 

Let's break it down a bit:

 

"1) Customer makes a purchase off our website and pays with PayPal."

Create an Other Charge or Service that links to Customer Prepayment Liability. Use it on a sales receipt. "Deposit" this to a Bank account you have, named for Pay Pal, in this accouting. Pay Pal is managed as a Bank account, so Deposit these sales to your Pay Pal Bank.

 

"2) We tranfer the money (less PP fees) from PP to our bank account."

 

Transfer from PP bank to real bank. Enter fees into the PP bank as "check/expense." Use the Pay Pal info as a Transfer (Settlement) from PP Bank to Real Checking. This also allows you to enter any PP fees into your PP bank, for tracking that Settlement is not always the Full sale. And now you get to Reconcile the PP bank to the PP statements, to watch for mistakes and fraud and simply Lost transactions.

 

"3) Since we have not yet shipped, we record the amount in Customer Deposits (liability account)"

 

With that Sales Receipt and that "Charge" item that links to Liability.

 

"4) When we do ship, we generate the invoice."

 

For the Actual Sales.

 

"The problem is can we, using the invoiced screen, do something that will move the amount from Customer Deposits to our bank asset account? Currently we're doing it via journal entry, but there MUST be a better way. There must, right?"

 

Make a customer Credit Memo (refund/return) and put the Same prepayment Service on it. Date this on or after the date of the invoice, and Apply it to show the invoice is paid or partially paid by the prepayment. If the credit memo from the prepayment has Unused credit, you can also issue a Refund from here. If the Credit Memo does not fully pay for the order, the customer needs to pay the balance due.

 

The use of the Service as prepayment is how you Get liability and how you Clear liability, always for Customer name activities.

Community Contributor *

Re: PayPal, Customer Deposits, and applying to Invoices

I cannot find any "Credits" section on the invoice. :(

 

Using QBO by the way.

Established Community Backer ***

Re: PayPal, Customer Deposits, and applying to Invoices

"I cannot find any "Credits" section on the invoice"

 

Neither answer you got mentions this. You got two recommendations

 

I pointed out a Transaction, the opposite of an Invoice, is a Credit Memo, which is Plus Sign, then Return/Refund. From that, you can apply it directly or carry it as an available credit.

 

Alicia Roy describes the ability to see Available Customer Credits to apply to invoices is part of the Payment screen:

  • On the right side of that invoice's column, click Receive Payment
  • Under the Credits section, you can use select the deposit using the box on the left. 
  • Once you've chosen the deposit, click Save and Close.

 

Community Contributor *

Re: PayPal, Customer Deposits, and applying to Invoices

Hi. Thanks for your somewhat snarky response. 

I said: I cannot find any "Credits" section on the invoice

You said: Neither answer you got mentions this.

Then you actually quoted: Under the Credits section, you can use select the deposit using the box on the left.

 

Play nice.

 

It's possible that I'm having a senior moment and possibly not totally understand or contextualizing Alicia's response. If that's the case offering some clarity is the prefered responce.

 

 

Established Community Backer ***

Re: PayPal, Customer Deposits, and applying to Invoices

Hello again. 

 

I received your PM and provided a detailed response on how to access the credits section. I'd be happy to continue working with you there. 

Established Community Backer ***

Re: PayPal, Customer Deposits, and applying to Invoices

Let's use the built-in deposit feature to simplify this process. This makes it easier to track deposits so it's all recorded and attached to this transaction. 

 

First we'll need to turn it on: 

  • Go to the Gear icon at the top of the screen.
  • Select Account and Settings
  • Choose the Sales tab on the left. 
  • Click the Pencil icon in the Sales form Content field. 
  • Check the box next to Deposit, and click Save

Now we can record the deposit on an invoice: 

  • Go to the + icon and select Invoice
  • Fill out the form, and enter the deposit amount towards the bottom right corner. 
  • Once you're finished, click Save and Close
  • When you ship the item, go back to the customer's transactions, and locate this invoice. 
  • Click the drop down arrow on the far right hand side of the column, and hit Send
  • Once the customer pays you, you can then click the Receive Payment button to show that they have paid it off. 

Since you don't want to record the deposit twice, it's best to reach out to your accountant about deleting the existing deposit if it's been reconciled. Otherwise, you should be good to go. Please let me know if you need help with this process. 

Community Contributor *

Re: PayPal, Customer Deposits, and applying to Invoices

Will this process move the $ from deposits to cash (or bank account)?

Established Community Backer ***

Re: PayPal, Customer Deposits, and applying to Invoices

When you type an amount in the deposit field, additional fields will pop up, allowing you to select the account it's deposited into. 

Not applicable

Re: PayPal, Customer Deposits, and applying to Invoices

Hi Alicia,

Just following this thread...

We require a non-refundable deposit every time our service is booked.  For instance, the total cost of the service is $500 and the required deposit is $100.  When we create the invoice, we put the total service amount in the line item as $500 and the deposit amount ($100) in the built-in deposit box in the invoice screen. Since all deposits come in the bank account, we choose the bank account in the "Deposit to" box that comes out when we put an amount in the deposit box.  The total balance payable will then become $400.  My question is, how do we match the $100 deposit that was credited in the bank with the deposit that we put in the invoice?

Established Community Backer ***

Re: PayPal, Customer Deposits, and applying to Invoices

"how do we match the $100 deposit that was credited in the bank with the deposit that we put in the invoice?"

There is nothing to match, if you entered a deposit in the built-in deposit box in the invoice screen.  The deposit is applied to the invoice when you save.

If the deposit is deposited in the bank by itself, then it's correct to choose the bank account in the "Deposit to" box.  But if it's batched it with other payments, then you should choose Undeposited Funds.

Note that if you want to run an accrual-based P&L, you should not create income when you receive a deposit, but rather when you provide the service. But that's another discussion

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