In this webinar, learn about accounting for the unexpected using QuickBooks. From issuing credit memos and refunds to adding finance charges, make a positive change with QuickBooks.

1. Accounting for the Unexpected
Using QuickBooks
Objectives
Sometimes you need to make a change.
After completing this webinar, you will be able to:
• Issue credit memos and refunds
• Handle customer NSF checks
• Apply vendor credits
• Void transactions
• Add finance charges
• Create statements
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2. Credit Memos
• Use a credit memo:
• When a customer cancels a sale
• When a customer returns an item
• When a refund check should be issued to a customer
• QuickBooks prompts you to issue a refund or apply the credit
Customer Overpayments
• When a customer overpays, record the overpayment, then…
• Apply the overpayment to a future invoice or
• Refund the customer
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3. Handling an NSF Check
• Create items for tracking bounced checks (Type-Other Charge;
Account-Checking) and their associated charges (Type-Other
Charge; Account-Other Income)
• Re-invoice the customer using the items created in the prior step
• Be sure to include your bank’s bounced check charge
Uncollectible Accounts
• If sales tax is involved, use a Credit Memo to write-off the account
as Bad Debt
• Create a Bad Debt Item
• Be sure Bad Debt is a Tax Item in the Credit Memo
• If sales tax is not involved, you may write-off the Bad Debt as a
Discount in the Receive Payment screen
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4. Vendor Credits
• To record a vendor credit, use the Bill Credit function in the Enter
Bills screen
• Apply the credit in the Pay Bills screen
Reports with Negative Numbers
• If a customer has a negative Accounts Receivable, there is an
unapplied customer payment or an unapplied credit memo
• If a vendor has a negative Accounts Payable, there is an unapplied
bill payment or a vendor credit
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5. Voiding Transactions
• NEVER void or change a transaction in a prior period. It must be
changed in the current period.
• Do not delete a check if it has been printed or an invoice if it has
been sent.
• Deleting a transaction removes it completely from your file. Voiding a
transaction keeps a record of the date, number and detail of the
transaction.
Voiding a Check in a Closed Period
• If the check being voided is only associated with an expense
account, the amounts are changed to zero, and 2 journal entries must
be created. (QuickBooks will create)
1. Journal entry dated on the same day as the original check
duplicates the accounting entry of the original check
2. Journal entry dated in the current period reverses the
accounting entry of the original check
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6. Voiding a Check in a Closed Period
• If the check being voided is associated with a non-expense account
or items, QuickBooks voids the check as of the original date
• Examples of voids as of the original date include checks using
• Items
• Bill payments
• Paychecks
• Payroll liability payments and
• Sales tax payments
Considerations When Voiding a Check
• Voiding a check used to purchase inventory items reduces inventory
quantities on hand.
• Voiding a bill payment check increases your Accounts Payable
balance.
• Voiding a paycheck reduces employee earnings and taxes withheld.
• Voiding a payroll liability check increases payroll liability account
balances.
• Voiding a sales tax payment check is not allowed. Deleting a sales
tax payment check may adjust your sales tax liability.
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7. Adding Finance Charges
• Option must be turned on in Preferences
• In Customer Center or from Customer drop-down list, choose Assess
Finance Charges
• A separate Finance Charge Invoice can be created or
• Finance Charges can be added onto Statements
Create Statements
• For partial payments
• For past due invoices
• For recurring charges
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8. Setting Preferences
To set Preferences, go to Edit > Preferences
Preferences to set include:
• Account numbers
• Class tracking
• Aging dates
• Cash or Accrual reporting
• Finance charges
• Inventory
• 1099 vendor tracking
Security
• Set-up Users and Passwords.
• Under Company drop-down
• Perform regular bank reconciliations.
• Make regular back-ups of your data file.
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9. Questions?
Deborah Garrison, CPA
Advanced Certified QuickBooks ProAdvisor
Sikich LLP
1415 W. Diehl Road, Suite 400
Naperville, IL 60563
T: 630.566.8470 F: 630.375.6996
dgarrison@sikich.com
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