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Join nowRunning QBO. When I "Receive Payment" on an invoice, I see the payment posts to Accounts Receivable. I can understand why the whole invoice would post to A/R, because while it's unpaid, it's a receivable. But once it (or any portion of it) is paid, it's no longer receivable. How can I get that payment to post elsewhere? (Ideally, I'd like it to post to an account like "Fee Received from Client X").
Thanks.
Hello there, @KJIsaacson.
I appreciate you for sharing your concern in the Community. You're understanding is correct.
When you create an Invoice, it means you’re creating Unpaid Sales. When the payment is received, the invoice (Account Receivable) will be cleared and it will be recorded as an Income.
Additionally, this issue can be caused by an unapplied payment. Let's review your Customer Balance Detail report to find unapplied payments. Here's how:
Once you have identified unapplied payments, you can apply them in Accounts Receivable. Here's how:
For future reference, you can also check out this article to learn more about the accounting methods in QuickBooks: Choose between cash and accrual accounting methods in reports.
Let me know below how it works for you by clicking the "Reply" button. I'll be around to help you more.
Hmmm... But this doesn't (as far as I can see) answer the major part of my original question--and perhaps I didn't state it clearly, for which I apologize: Why, when I "receive" a partial payment, does that partial payment post to a/r? It's no longer a receivable, since it's been received (i.e. paid).
To be more specific, I render an invoice for legal services rendered. I've already received an advance payment of a certain amount, which I hold in a trust account. (For various reasons, I do not have my trust account linked to QBO, so it's external to QBO.) When I render the invoice for, say, $1,000, I immediately "receive" a payment of, say, $750 (for which I'll write a check from my trust account to my operating account).
This leaves an outstanding amount of $250. However, the $750 that I've marked "received" posts to A/R. But it shouldn't, should it?
Thanks for being part of the QuickBooks family. I’m here to help and ensure the money is properly tracked in your account, KJIsaacson.
You can set up a deposit or retainer process when you invoice the customer and receive payment against it. First, you'll need to create a liability account to track the number of retainers you receive from your customers.
To start with, create a liability account to track the amount of the retainer you received from your customer. Let me walk you through the steps:
Then, create a retainer item you can use to receive the deposit or retainer from your customer. For the detailed instructions, refer to the steps below:
Here's an article for the complete details about prepayments: How to record a retainer or deposit.
You can always count on the Community Team if you need additional assistance in completing your tasks with QuickBooks. Stay safe and have a great rest of the day.
I think I'm following pretty well, but it's starting to get murky...
1. I've created a liability account (Other Current Liabilities|Client Trust Accounts - Liabilities.
2. When I went to create a retainer item, I followed the steps. New Service. From Income Account drop-down, I did not see the expected "Trust Liability Account," as per instructions. I therefore chose Sales of Product Income, and named the account "Trust Liability Account."
3. Next, on the page you linked me to, Step 3 (Not always needed) is "Create a trust liability bank account." I do have a bank trust account, but i haven't followed those instructions because I'm uncertain. Should I do this step, or should I create a new "Bank Account"? As I've said in another thread, I cannot link my bank trust account online (for regulatory reasons), but I was told I could go to Chart of Accounts and create a new Bank Account. If I do that, and it if also follow this Step 3 "Create a trust liability bank account," would I be duplicating things? This is where I'm confused. (And, FWIW, Step 3 here would create a liability account, whereas creating a Bank Account would be an asset account, no?)
Of course, once I get past this decision/step, there will be more opportunity for me to become confused, but I'll deal with that when it happens!
Thanks for all the very valuable guidance!
Thanks for getting back to us, KJIsaacson. Allow me to step in and share some information regarding the process.
As referenced in the article, Step 3 Create a trust liability bank account (Not always needed), you have the option not to create this type of account if you already have a separate account where you keep the money from customer retainers and deposits.
If you want to keep the money from your operating account, you can proceed to Step 4 and skip this procedure to avoid duplication. If you're still confused about the process, I'd suggest working with your accountant. They'd be able to help keep your balances accurate.
You might want to visit the following write-up: Sales and customers. This will provide you links on how to manage your company income as well as sales invoice.
I'm only a post away if I can be of additional assistance, please let me know. I'm always here to keep helping. Wishing you a wonderful rest of the week.
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