Whenever you set up a new area of QuickBooks, you need to review the Account and Settings related to that area. Before you go into Account and Settings, you need to make sure you understand the different types of sales and revenue transactions.
• Estimates are non-posting transactions that provide your customers with information on what you think you are going to charge them. Think of an estimate as a quote or proposal.
• Invoice is the sales transaction used when you want the customer to pay on account. An Invoice will increase accounts receivable, generally increase income and perhaps sales taxes if they are being collected.
• Receive payment is the type of transaction used to receive payment against an invoice. A Receive payment decreases accounts receivable and increases either a bank account or Undeposited Funds.
• Sales receipt is a sales transaction used when you receive payment at the time of sale; it has no effect on accounts receivable. It increases income and increases either a bank account or Undeposited Funds. Think of it as the equivalent of a cash register receipt when you buy a pack of gum at the store.
• Credit memos are used when a customer returns something or negotiates a lower price after the original invoice has been issued. This creates a credit in accounts receivable that can be used against future invoices.
• Refund receipts are also used when a customer returns something or negotiates a lower price, but with a refund receipt you are refunding their payment. It has no effect on accounts receivable. Refund receipts are often used if the customer to whom you are refunding the money no longer has any outstanding accounts receivable balance with you.
• Delayed charges and credits are only available in Essentials, Plus and Advanced; they are non-posting transactions that reflect a potential revenue increase or decrease, as they are reminders to add these charges or credits to future invoices.
All these transactions relate to monies coming in. Some of these transactions can be launched from more than one access point, whereas others can be launched only from one.