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Joeshepherdmba
Level 1

How to record the sale of my company through installments

I recently brokered the sale of my company. The deal was set up as an installment agreement with payments every quarter for 5 years. If the buyer defaults at any time the deal reverts and I keep all previous payments. How should I categorize these quarterly payments in Quickbooks?

 

Has anyone dealt with this type of acquisition before?

3 Comments 3
CharleneMaeF
QuickBooks Team

How to record the sale of my company through installments

Thanks for choosing QuickBooks in tracking your sales transactions, Joeshepherdmba. I understand how important it is to accurately record your installments. I'll help you with that.

 

Progress invoicing lets you record your sales through installments. This keeps the payments organized and connected from start to finish. 

 

To start, let's turn on the progress invoicing feature. I'll show you how:

 

  1. Go to the Gear icon and then select Account and settings.
  2. Click the Sales tab.
  3. In the Progress Invoicing section, select Edit.
  4. Turn on the switch to Create multiple partial invoices from a single estimate.
  5. Select Save and then Done.

 

Then, let's create an estimate for the total amount. Here's how:

 

  1. Go to  + New and then click Estimate
  2. Select your customer.
  3. Fill out the rest of the estimate.
  4. Click Save and close.

 

Once done, you can now create progress invoices from the estimate. This way, you can track the partial amount. For the detailed steps, please see Step 4 on this article: Set up and Send Progress Invoices in QuickBooks Online.

 

Additionally, I've added an article that'll help you personalize your sales forms in QuickBooks Online. This ensures you can add the info that matters most to your business: Customize Invoices, Estimates, and Sales Receipts.

 

I'll be glad to help you again if you have more questions about tracking your QuickBooks transactions in, Joeshepherdmba. You can add the details in the comment section.

Rainflurry
Level 13

How to record the sale of my company through installments

@Joeshepherdmba 

 

Was this an asset sale or a stock sale?  What kind of business entity - sole proprietorship, LLC (if so, what tax status), partnership or s-corp?   

Joeshepherdmba
Level 1

How to record the sale of my company through installments

Hi Rainflurry, we are selling the company completely. We don't have physical inventory but we do have some software products. It is a single-member LLC taxed on my personal return. I want to make sure I account for the seed money I put in (~$200k) as well. Not sure how that impacts my tax liability on the sale but I want to make sure I have everything set up correctly. 

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