HOW do I Track deposits and partial payments against a single estimate

kelly5 · ‎December 10, 2018

I am a small carpenter/contractor and I have started using quickbooks for creating estimates, bookkeeping, and tracking employees/subcontractors.

I am having great success creating estimates for clients and jobs. I have created a custom estimate template that displays the total price, and always says "15% Due at Signing." Once the estimate is signed, I receive check from the client, and then record it into Quickbooks 2014 for Mac using the Receive Payments button.

Here is where things break down...
I can use the original estimate to "Create Invoice" and I can choose to add partial amounts or percentages in order to send my client an invoice for a progress payment. After this, I can not seem to find how to display the the total accepted estimate amount, and original deposit amount. For example:

Original Estimate: $5000
Accept Payment: $750
Create Progress Invoice from Estimate: $2000
How do I send further invoices showing amount accepted, amount already paid, and partial amount owed?

Here is what I would like to have happen in my ideal world:
- Create estimate
- "Note" that the estimate has been accepted, and record the deposit received against the total
- Create invoices for whatever amount of progress payments that I choose, and include the payments already made against the total amount of the job.

I would REALLY appreciate someone taking the time to walk me through the steps to get this setup. I am so close, and have a hunch the answer is right around the corner.

Thanks

Tammy-Murray · ‎December 10, 2018

I recommend that you upgrade to QB Premier (or higher version than Pro)
Lower versions of QB only have sales estimates....Premier and above have Sales Order functionality
Sales orders allow you to:
1. Segregate "iffy" sales (i.e. sales estimates) from approved "go ahead and do it " sales(i.e. sales orders).  You simply hit a button on the sales estimate screen to create a sales order!

2.  Record customer deposit as a "sales receipt" using item name "customer deposits" that you have set up as posting to a liability account customer deposits (the money is not yours quite yet!)

3.  Neither sales estimates or sales orders post to your financials until you create a sales invoice.  You create the sales invoice from the sales order screen (again a button click) and you can invoice all or only a portion of the sales order (progress bill or one fell swoop bill).  Once you have the invoice created, add a line with item name "customer deposits" and input the previously received deposit as a negative number and magic happens!  The customer deposit liability account clears to zero, and you have a receivable from your customer for the balance, as well as the sale posting to your financials.

Tammy-Murray · ‎December 10, 2018

Oh yeah and forgot to say unfortunately QB for Mac can't be upgraded to sales order functionality. You would have to be able to run from PC or a PC platform on your Mac. I have a client that wanted so badly to use her Mac. Wish QB would continue to develop higher functionality for Mac too!

qbteachmt · ‎December 10, 2018

"I receive check from the client, and then record it into Quickbooks 2014 for Mac using the Receive Payments button."

When you get the prepayment, if this is not being applied to the first Progress Invoice already, Do Not Process this as a Payment. Never process a Payment when there are no open charges.

Create an Other Charge type item linked to a Liability account for Customer Prepayments.

Use this item on a Sales Receipt when you get this prepayment.

When progress invoicing begins, create a Credit Memo using that same prepayment item dated for the date you to apply their prepayment to actual charges due, and let QB apply the credit to the invoice to reduce the invoice to not less than 0 owed. This clears the liability as you have applied it as a credit.

"and include the payments already made against the total amount of the job"

They are not applied against the job but against open charges.

kelly5 · ‎December 10, 2018

Thanks for the detailed response. I followed along until:
"When progress invoicing begins, create a Credit Memo using that same prepayment item dated for the date you to apply their prepayment to actual charges due, and let QB apply the credit to the invoice to reduce the invoice to not less than 0 owed. This clears the liability as you have applied it as a credit."

I don't see an option for creating a Credit Memo using the prepayment (deposit). I can create a Credit Memo from scratch, but it doesn't link to the Sales Receipt I created when I received the prepayment. Is this what you are referring to?

Thanks for all the help.

qbteachmt · ‎December 10, 2018

Credit memo is used to apply a prepayment to an invoice. The item on it will create the opposite of the data flow that happened when you process the prepayment to begin with. It does not link to the Sales Receipt. The common point is the Prepayment item that you use. The transactions are related by Same Customer and Same Item.

SkinnyRaven · ‎December 10, 2018

- Create invoices for whatever amount of progress payments that I choose, and include the payments already made against the total amount of the job.

Edit your invoice in layout designer, from the footer section in the fields pallet add payments/credits and balance, position where you like. Make your progress invoice, then receive payments and apply the pre payment. The invoice will show the original total, the applied pre payment and the current balance.

kelly5 · ‎December 10, 2018

Thanks for taking the time to help me out. I have a clarifying question. Sticking with the hypothetical estimate from above:
- Lets say my $5000 estimate has been accepted, and I accept a $750 deposit.
- I would like to create a progress invoice for $2000, because I am done with a milestone in the job

When I click "Create Invoice" from the Estimate, should I choose:
- "Everything on the estimate"
or
- "Only certain items or different percentages for each item"

I thought I should create an invoice for everything on the estimate because the entire estimate was accepted, and I will want to eventually bill for the whole amount.

Another way to ask this question is:
Should I create multiple invoices that all add up to $5000, and somehow track the deposit as well"
-or-
Is there a way to create one invoice, but only send the client partial amounts from that invoice over time so that it gets paid over time?

I hope these questions make sense. Thanks again.

SkinnyRaven · ‎December 10, 2018

Whether you progress the invoice or not depends on the project. If the project is being completed in phases choose the option that meets the phases of the project. If the project is complete invoice for the total.

qbteachmt · ‎December 10, 2018

"When I click "Create Invoice" from the Estimate, should I choose:
- "Everything on the estimate"
or
- "Only certain items or different percentages for each item"

I thought I should create an invoice for everything on the estimate because the entire estimate was accepted, and I will want to eventually bill for the whole amount. "

No, this invoice is this date's Sale. You are invoicing for $2,000, so you need "Certain Items or different %" and you also should be able to put in $ and/or Qty, with this function.

The other, first, function is "All Remaining Values."

"Another way to ask this question is:
Should I create multiple invoices that all add up to $5000, and somehow track the deposit as well"
-or-
Is there a way to create one invoice, but only send the client partial amounts from that invoice over time so that it gets paid over time?"

It is not Multiple Invoices. It is a Series of Invoices, linked back to the Estimate, and progressing from the first invoice through to the final invoice.

You track the deposit separately, as a liability, if you are holding it for later.

Or, that first invoice for $2,000 means you are accepting that $750 payment against it.

YOU define if that deposit is a prepayment or held until completion, like Retainage.

arttolivby · ‎December 10, 2018

In the Manufacturing industry, at times we have orders that are held for release. In other words, we create the estimate for the full amount, adding the qty, then the first release, would be for a percentage of the original order, etc. In other words...If you are creating an estimate up front, and always require, either 50%, or 25%, etc. you would create a billing item for the amount you are about to expect to receive payment against. create the estimate for description of service with or without a item number attached, then create item numbers and add those to your estimate...so 50%, then 25%...now when you get the payment you can apply it against these items, and as you do...the invoice will be reduced until it is completely paid off. Your agreement with the customer should be reflected on your invoice. You need to create an item for the orginal/estimated amount, and items for all other possible payment amounts to be expected on the job as well. This way everything is recorded. and when you pull a report or a statement with detail, you can see what happened from the inception of the order until it was paid. I hope this helps, if you need further explanation please email me at <a href="mailto:arttolivby@gmail.com" rel="nofollow" target="_blank">arttolivby@gmail.com</a>

Moyna · ‎July 22, 2020

I have done the steps you have stated in your email and it worked great except for one problem. The amount that was invoiced does not show in my sales tax liability report for that month. Why not and how do I fix that?

Thanks for your time!

Moyna

jamespaul · ‎July 22, 2020

Hello, Moyna.

I'm glad the steps and instructions from arttoliveby worked out fine. I have an idea on what to do to ensure the invoiced amount is reflected properly on the sales tax liability report.

It's possible that the items aren't set as taxable, which is why the amount doesn't show up in your Sales Tax Liability report. You would want to toggle their status in the setup window. Here's how:

In QuickBooks Mac, go to the List menu.
Choose Items.
Open the item by clicking on Edit Item.
In the item settings window, ensure the Taxable is checked.
After reviewing, click OK.

You'll also want to check if the sales items are added and properly set up. Click this link and expand the Add a sales tax item section, then follow the steps.

It sounds like you and arttoliveby discussed the steps for QuickBooks Mac. If you're using QuickBooks Desktop for Windows otherwise, the same principles apply. Ensure the items and the invoices have tax codes attached.

Before doing this, check to see if you have added a tax code with the correct rate. Go to List, then choose Item List. Find and open the sales tax item code, and check to see if it has the correct rate.

Next, ensure the item is set as taxable. In the Item List window, open the item. Choose the tax code under the Tax Code drop-down menu.

When you're done, open your invoice to edit it. Ensure the line items and the invoice itself have the proper tax codes on it.

After doing the steps above, check your Sales Tax Liability report again.

If you're ready to pay your sales tax, you can check out these articles:

You can also browse other topics for a specific program here. Change the product by selecting another one in the Topics for section.

Don't hesitate to come back to the Community forums if you have other questions with QuickBooks. I'm more than happy to help out again.

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HOW do I Track deposits and partial payments against a single estimate