How to Handle Customer Prepayments in QuickBooks Desktop Enterprise

Understanding Customer Prepayments

Customer prepayments (or deposits) are payments received from customers before invoicing and delivery of products or services. You can manage these prepayments using QuickBooks Enterprise 24.0 or later.

Steps to Manage Customer Prepayments

1. Requirements:

• Prepayments can only be used with sales orders and estimates.
• Applicable to both Progress and Non-Progress estimates.
• Once applied to invoices, prepayments cannot be edited.
• Prepayments are incompatible with multi-currency. Enabling multi-currency will disable prepayments.

2. Enabling Prepayments:

• Go to Edit > Preferences.
• Select Payments > Company Preferences.
• Under Prepayments, choose Prepayment Settings.
• Turn on Prepayments.
• Select or create a Current Liability account.
• Confirm by selecting OK.

3. Receiving Prepayments:

• Create or open a sales order or estimate.
• If sales orders are not enabled, you need to turn them on.
• Choose Receive Payments > Prepayment on Sales Order or Prepayment on Estimate.
• Enter prepayment details and save.

4. Printing Sales Orders/Estimates with Prepayments:

• Open the sales order or estimate.
• Select Formatting > Customize Data Layout > Footer.
• Check Prepayments and Balance Due.
• Adjust layout if needed, then print.

5. Applying Prepayment Credits to Invoices:

• Open the sales order or estimate, and select Create Invoice.
• Save the invoice and confirm to apply prepayment credits.
• You can also apply credits directly on the invoice.
• Select and edit the prepayment credit amount, then confirm.

6. Viewing Prepayment Credits in QuickBooks:

• QuickBooks creates two general journal entries for each prepayment credit.
• Find these entries in the Customer Center under the Customer/Job applied.

7. Running Reports on Prepayments:

• To see open prepayments, run the Open Prepayments by Customer report.
• Customize this report for fully applied prepayments if needed.
• For open sales orders and estimates, run the Open Sales Order by Customer report and customize it to include prepayment balances.

8. Editing and Refunding Prepayments:

• Edit prepayments if they haven’t been applied to an invoice.
• For refunds, delete undeposited prepayments, or issue a credit memo/write a check if deposited.

Conclusion

By following these steps, you can efficiently manage customer prepayments in QuickBooks Enterprise 24.0 or later, ensuring accurate financial tracking and customer satisfaction. Get QuickBooks Enterprise today at a discount here: https://wuzypro.com/pages/quickbooks-enterprise