Customer Receipts Bookkeeping Question

Customer Receipts

Customer Receipts

I accept credit cards at my business and want to know if I need to keep the receipt they sign?

If so, why? And how long?

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Mar 24, 2011
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starstarstarstarstar 		3-6 years
by: CowlitzCorporationCompany.com

I have requested this information from the IRS and was told that you are allowed any record keeping system that suits your needs ( i.e. a shoebox or paper bag) and they recommended keeping these receipts for 3-6 years.

CowlitzCorporationCompany.com

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Customer Refund

How do I record a customer refund in the checkbook? Not sure which account is credited and debited.

Hello,

Great question. Customer refunds are typically recorded in a Returns and Allowances (Income Account) as follows:

DEBIT Returns and Allowances
CREDIT Bank Account

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Customers Who are Vendors QB Question

I have a vendor who also is a customer. As a vendor they refunded us too much money and they want to use the credit to pay part of their customer bill. How do I enter this in Quick Books?

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Aug 23, 2023
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starstarstarstarstar 		QuickBooks Clearing Account
by: BB

In QuickBooks, when you have a vendor who is also a customer, and they have overpaid on a vendor transaction and want to apply that credit to a customer transaction, you can handle this situation through a Contra Account or a Clearing Account. Here's a step-by-step guide:

Create a Clearing Account: If you don't have one already, create a new account in your Chart of Accounts called "Clearing Account" or "Contra Account." Set the account type as a Bank.

Record the Vendor's Refund: Enter the vendor's overpayment as a deposit in the Clearing Account.

Apply the Refund to the Customer Invoice: Create a payment from the customer and choose the Clearing Account as the payment method. Apply this payment to the customer's invoice.

Check the Clearing Account: The Clearing Account balance should now be zero, reflecting the offset between the vendor refund and the customer payment.

This process allows you to clearly track the movement of funds without affecting other accounts. It keeps both the vendor and customer sides of the transaction cleanly separated while facilitating the offsetting payment.

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How to do Customer Sequential Invoice #s

by Amy
(Hawaii)

Just starting QuickBooks. My boss set up one AR for all clients. Now, he wants each client to have 1, 2, 3 etc. invoice numbers instead of QB generating one sequence shared by all clients. How do I make this change?

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Aug 23, 2023
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starstarstarstarstar 		QuickBooks Invoice Numbering
by: BB

In QuickBooks, having a unique invoice numbering sequence for each client is not a built-in feature. The software generally maintains a single continuous sequence for all clients. However, you can create a manual workaround to achieve a similar result by customizing the invoice numbers for each client. Here's how you can do it:

Open the Invoice: Start a new invoice or open an existing one.

Edit the Invoice Number: In the "Invoice No." field, manually input the desired invoice number for that particular client. You can use a prefix or a specific numbering system that makes sense for your organization, such as "ClientA-001," "ClientB-001," and so on.

Save the Invoice: After editing, save the invoice. QuickBooks will recognize the new numbering sequence, and subsequent invoices can follow that pattern.

Continue Manually: You will have to continue this manual process for each client, tracking the numbering sequence outside of QuickBooks.

Please note that manually editing invoice numbers can be time-consuming and prone to errors, especially if there are many clients and invoices to manage.

This workaround is suitable if your boss wants a unique numbering system for each client, but it's not the standard or recommended practice in accounting or in QuickBooks itself.

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Old Credit Notes to Customers

by Cindy

How long do I need to keep a Credit Note to a customer on the books? We have some Credit Notes to customers that have been on the books since 2002. No matter how many times we notify the customer, they won't take these credits when paying current invoices. What is the entry to remove these from the books? Cindy

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Aug 23, 2023
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starstarstarstarstar 		Customer Credit Note
by: BB

It's important to consult your local laws and an accounting professional, as the regulations for retaining credit notes and handling unclaimed credits may vary by jurisdiction. Generally, though, here's how you might approach this situation:

Retention Period: Credit notes should typically be kept for at least 3-7 years, depending on local laws and regulations. Since these notes are from 2002, it seems they have been retained well beyond the typical requirement.

Attempt to Notify the Customer: It's good practice to make several documented attempts to notify the customer about the credit, which you have done.

Consider Legal Counsel: Before writing off the credits, you may want to consult with an accounting professional or legal counsel to ensure that you are complying with all applicable laws.

Write Off the Credit: If you've exhausted all options to utilize the credit, you can consider writing it off. The journal entry to remove the credit might be to debit the liability account where the credit note is recorded and credit an income account like "Other Income" or "Forgiveness of Debt."

Debit: Customer Credit Liability (for the amount of the credit)

Credit: Other Income/Forgiveness of Debt (for the amount of the credit)

Documentation: Keep all related documentation, including your attempts to notify the customer and any professional advice you've received, as this can help if the decision to write off the credit is ever questioned.

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Receipt Customer With Outstanding Amount

I have a customer that owes us R1500.00. My boss in turn owes the customer R2150.00. My boss would like me to 'receipt' the customer's account with what we owe him. And the remaining amount he will pay in cash. I am not sure how I am supposed to do this in the correct way? Please help!

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Aug 23, 2023
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starstarstarstarstar 		Offsetting Customer Bookkeeping Amount
by: BB

In this situation, both you and the customer owe each other money. You can offset these amounts against each other by recognizing the smaller amount as paid by both parties, and then handling the remaining amount separately. Here's how you might handle this transaction:

Record the Offsetting Amount: Recognize that R1500.00 has been paid by both parties. You can create a journal entry to show that the customer's debt to you has been paid and that your boss's debt to the customer has been reduced by the same amount.

Debit: Accounts Payable (R1500.00)
Credit: Accounts Receivable (R1500.00)

Handle the Remaining Amount: Your boss still owes the customer R650.00 (R2150.00 - R1500.00). If your boss is going to pay this in cash, you can make another entry to reflect this payment.

Debit: Accounts Payable (R650.00)
Credit: Cash (R650.00)

Document the Transaction: Make sure to keep all related communication and documentation to support the transaction, as this is a somewhat unusual situation.

Please consult with an accounting professional or refer to your company's specific policies, as practices may vary based on local regulations and the unique circumstances of your business.

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