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Why Does QuickBooks Treat Sales Receipts as OPEN?

October 9, 2012 | By | 35 Replies More

Do you know the difference between a Sales Receipt and an Invoice in QuickBooks? I often find that people really don’t understand the difference. Sometimes, though I wonder if Intuit understands the difference! There is one aspect to how they show Sales Receipts that really annoys me, so here is my latest rant.

The difference is simple.

  • Sell something on an Invoice when you have a receivable. The total amount due is an “open” balance that you hope that your customer will pay. You have not received payment yet.
  • Sell something on a Sales Receipt when you have been paid at the time of the sale. The total amount isn’t open, you have already received the payment, you just have to deposit it.

That is pretty much the basic issue here. I use Sales Receipts a lot because, in general, I get paid at the time of the sale. They save me the step of having to do an additional receive payments transaction.  So, let’s look at the Customer Center in QuickBooks 2012 to see how these are shown:

QuickBooks 2012

If my Sales Receipt represents a sale that I have already been paid for, why is it showing as open, why is it “aged”? This doesn’t make sense to me and it is REALLY annoying. I look at this screen a lot, and seeing the “open balance” and “aging” for a Sales Receipt is misleading and annoying.

Now, I understand that I can use the filters to alter this. Select open invoices and charges and it is hidden. I just don’t like to keep adding filters to correct this problem. It should always display correctly! It shouldn’t show an open balance at ANY time!

QuickBooks 2012 filtered

In all fairness, we do have to look at how this is treated in QuickBooks 2013, since it is being released. Is it better? Well, almost.

QuickBooks 2013

As you can see they DID change this to hide the Aging value, which is a step in the right direction. But it still shows an open balance when unfiltered.

OK, so it is a small thing, but these are the kinds of things that plague me…

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Category: Charlie's Rants, Expert's Corner, QuickBooks Tips/Tricks, Software Updates

About the Author ()

Charlie Russell is the founder of CCRSoftware. He's been involved with the small business software industry since the mid 70's, and remembers releasing his first commercial accounting software product when you had a one-floppy disk drive system, loading the program from one floppy and then replacing that with the other floppy to hold the data. He has a special interest in inventory and manufacturing software for small businesses. Charlie is a Certified Advanced QuickBooks ProAdvisor with additional certifications for QuickBooks Online and QuickBooks Enterprise. He also is a Xero Certified Partner. Visit his CCRSoftware web site for information about his QuickBooks add-on products. Charlie can be reached at charlie.russell@sleeter.com He is also the author of the California Wildflower Hikes blog Connect with Charlie at Google

Comments (35)

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  1. Sari Browar says:

    Charlie, you can solve your issue by creating a payment method item(s)on the sales receipt, and have the payment item group to undeposited funds for depositing purposes. The Sales Receipt will be zeroed out and it will display the way you want it to. Hope this helps, and thanks for all your informative articles!

    • Sari, I should NOT have to do a workaround like that to get this to work! The whole idea of a computer program is to make my life easier, not more complicated.

      However, thank you for pointing that out, I didn’t realize that it would work the way it does.

    • Toni says:

      Hi, I just created a sales receipt (first time). How do I record the cash payment against it? I tried under ‘Receive Payments” but there is no receipt or anything to connect it to the sale receipt. Any ideas? Thanks so much

      • Toni, it is already “received”, so it should be ready for deposit. Look in “record deposits”…

        • Deb McCready says:

          Ok, I have QuickBooks 2012. I have an empty record deposits window. On my chart of accounts the total is there but I can’t figure out why it does not show up when I try to make deposits. I went to preferences and unchecked the undeposited funds window. My record deposits window appeared for a bit and then I lost it again. Please help. My heads spinning.

          • Deb, it is hard to say without having hands on the file. I would open the register for that account and look at what has created that balance, perhaps you have a journal entry or some other transaction that affects it. Also, you can try doing a “rebuild” of the database, there could be some issues there.

  2. Carol says:

    I agree with Charlie. It is not an open amount. And I don’t want to have to do some “work-around” to make it like it should be. I get pretty tired of remembering all the work-arounds for QuickBooks.

    • Sari Browar says:

      Carol, yes, sometimes we have to use a lot of workarounds :( , but in this case, I think it’s more of an option, and it can be a very useful one. One example is when a client wants to pay with two methods, like a check and the balance on a credit card. So in the sales receipt you would select the check payment item and then the credit card payment item for the balance. I actually prefer to have my sales receipts zero out–that way I can see in one place that I have accounted for everything.

      • Sari, for a split payment like you suggest, that moves this out of the realm of “workaround” as that is more of a way to deal with a particular situation that is somewhat complicated or out of the normal. For that kind of situation, a payment item makes perfect sense. In my business, that kind of payment situation is extremely rare (I can’t remember it ever happening), and so using a payment item is more of a chore.

  3. Lyn Barr says:

    I wonder if this was an oversight on their part. Why else would they fix the Aging number but not the Open Balance number?

    It seems like whatever logic was applied to the Aging would work similarly on the Open Balance.

    Baby steps, though, right?!

  4. Charlie, does QuickBooks offer any ideas as to why they don’t change this?

  5. Gary Whitt says:

    I’d have to agree with Sari that you need a payment item on your sales receipt. And no, it’s not a work-around, either. After all, where did that sales payment go? By what method was it paid? That’s vital information that NEEDS to be posted to the proper accounts in the transaction. Would that be the double entry bookkeeping? I don’t know, but wanting a hanging Sales Receipt to magically balance itself it sounds a lot more like a Quicken transaction to me. Disclaimer: I’m not an accountant but a business owner that uses QB to do my bookkeeping and generate reports for my accountant annually.

    • MB Raimondi says:

      Gary – I put the payment method in the payment method box on the sales receipt and all my sales receipts post to undeposited funds. Sari is suggesting you use a payment item to zero out the sales receipt and that seems to defeat the purpose of using a sales receipt – which is defined as receiving payment at the time of sale!

  6. Gary Whitt says:

    MB, that’s fine for simple transactions recorded on a transaction by transaction basis. My use is a little more macro: I have created two templates for sales receipts. One is to post my daily retail store sales summaries and the other to post by daily webstore sales summaries. I’ve created over 90 different seven different ‘sales’ items to track all the different sales tax jurisdictions I have to report out and 7 different payment items to track the different payment methods. Each payment method is piped to undeposited funds and gets deposited in the proper account when I go to the bank for cash or checks, or shown as deposited when transaction matching the deposit made by my merchant account to the proper account. Every daily sales receipt summary is made up of multiple sales items zeroed out by payment items. It’s a relatively complex system that gives me cross-foots in several ways but it does not show each individual transaction as I have other systems that take care of that (cash registers, credit terminals, a web shopping cart, etc). Putting together a working bookkeeping system for my business using QB without turning my established business procedures totally upside down taught me a lot about QB: what works, what doesn’t, what’s broke what isn’t and what I can safely ignore. The Sales Receipt function isn’t broken. It works as intended and is totally configurable to adapt to complex business situations by the use of items and zeroing out.

  7. Interesting discussion!

    Gary, I’m not suggesting that the ability to use a “payment item” be removed. One of the great things about QuickBooks is that there are a lot of ways that it can be used to accomplish what you need for your business. You have a complicated setup that I’m not sure I fully understand at this point, but the best thing I can say is that if it works for you, that is great!

    Many businesses don’t need the kind of complicated setup that you are using. My own business, as an example, doesn’t need anything close to that. Most of the businesses that I consult with don’t need that either. In these cases, it is extra work to use payment items. Also, this isn’t the “intuitive” way for people to use the program. You generally, if you weren’t trying to accomplish what you are doing, would not use a payment item in this transaction.

    For those cases, which in my view are very common, I think that this “view” should be different. The sales receipt IS NOT OPEN, there should not be a balance showing as open.

    I don’t believe that this fix would affect your use of the program negatively. I do believe this aspect should be changed.

    However, I’ve accomplished one of the things that I like to get from my “rant” articles – we have an active discussion, we’ve seen different views on the subject, and I’ve learned more about how people use QuickBooks!

    • Crystal says:

      Charlie, if choosing the payment method on the Sales Receipt effectively zereod out the transaction wouldn’t that actually create a problem for those using the Sales Receipt as a Daily Sales Summary as it would double up the payment? Since POS posts to QuickBooks in the same manner as Gary described his process I could see why that can’t be changed.

      • Crystal, it isn’t an issue of changing payment methods, really. In a normal situation, where you just issue a sales receipt, that one screen should not show it as still open. I don’t want to change how payments are done, or anything about the transaction itself. I just want them to change how this screen reports the transaction.

  8. Bob Crook says:

    Interesting Discussion indeed! Charlie I’ve had many a client ask me that same question. “Why is that showing an Open Balance when I know they have paid me?”

    VENDOR CENTER has the same problem! So not to add fuel to your fire…but….same issue in A/P. Clients really grumble about checks vs enter/pay bills especially when using POS. Many of my clients will pre-pay for inventory merchandise and post check (or credit card charge) to A/P awaiting for Receiving Voucher to post from POS. When merchandise is received later and Bill comes from POS they apply the check to bill. Well guess what???? Vendor Center still says it is an OPEN BALANCE on that transaction. Same issue as your Sales Receipt.

    So bottom line is…my request is that if they ever fix this in the Customer Center they better darn well fix the Vendor Center too.

    In both cases I teach my clients to run the Open Invoice Report for A/R and the Unpaid Bills Report for A/P for true open balances.

    If they want A/R or A/P history on particular customer/vendor then I teach them to run Customer/Vendor Detail report and filter by specific name. I particularly like this report because it give them a running balance. The Customer/Vendor Centers can’t do that at all. This report will exclude Sales Receipts on A/R and Checks not going through A/P. I avoid using the Customer/Vendor Centers because I hate not seeing the running balance. Clients really like these two reports for A/P and A/R and it is certainly less confusing.

  9. Gina Palacio says:

    Very interesting discussion. When recording cash register daily sales for clients I typically use the sales receipt with payment items to zero it out – it works very nicely – except that the Mac version can’t accept the idea that a payment item can be used on a sales receipt (at least the Mac 2009 version – haven’t tried on a newer version), so I have to use another designation type for my payment items to fake out the system, or use invoices instead (same concept – still hits zero).

    Regarding your open sales receipts, I have noticed that credit card payments have a similar issue – when you run a custom detail report for job costing showing all transactions related to a job (A/R and A/P) with the paid/unpaid filter on, the vendor credit card payments show a status of unpaid – which is impossible!

  10. Angela Loupe says:

    Now you tell me! AFTER I just taught a client how to use Sales Receipts instead of invoices. Very annoying…

    • Angela, this doesn’t change most of the reasons why you would use a sales receipt instead of an invoice. I love sales receipts, I use them all the time. This is just an annoying issue, but the underlying transactions are still good…

  11. Amy says:

    Pretty unrelated, but any chance you have found a way to search for a sales receipt by the check number it was paid by? I have been struggling with this issue. I know that I can run a report, but that’s something like 5 extra steps. Definitely my pet peeve. Apparently searching by number only turns up the sales number, not the check number. We don’t even keep track of sales numbers, as a customer will often not be able to recite that number when asking about their payment, and our bank does not record it, so it’s not very useful.

    We used to run everything through receive payments, regardless of the payment time, and it let us search by check number then. Unfortunately by switching to sales receipts, we sacrificed searching efficiency.

    Thanks for any help! I agree that QuickBooks is not always intuitive.

  12. Deb says:

    My computer crashed and I lost all my data. I have reinstalled quickbooks which I hadn’t even tried yet when the other computer fried. I have the newest version. Needless to say I have enter all my invoices for the past year. It has an issue with the dates, and when I try to add multiple items on the invoice when I hit enter on one it closes the invoice! I need to recreate the whole thing. Any idea on how to fix this? Thanks

    • Deb, this is too vague to be able to help. You don’t say what version of QB, for example. You don’t mention how you got that QB file that you are using. Lots of variables here. My recommendation is to work with a knowledgeable consultant to look at this – sounds like you may have some damaged data that has to be repaired.

  13. Tag says:

    Hi Charlie,

    Question, I am new to bookkeeping, so have basic questions. I have a client who did all her own bookkeeping through Quickbooks Online for the first 5 months of the year. She has entered invoices and sales receipts for the same client. Is this recording the revenue twice?

    Also, is there any reason she would use cash draws to receive payments, and pay expenses, and also receive payments and pay expenses through her primary bank account? I just want to ensure I have the right information moving forward.

    Thank you.

    • If you have a sale, and you enter two transactions for it, you have entered it twice. A sales receipt and an invoice for the same sale transaction is duplicating the sales.

      The second question is more complicated and not easy to answer without knowing what exactly you are talking about. Is the “primary bank account” the business account? Then that is what you would be using. In general you shouldn’t be using cash to handle transactions for a variety of reasons, in most businesses. If you are saying that she is using cash to make payments, AND checks for the same thing, then again you are duplicating the transaction.

  14. Andy Totten says:

    Charlie:
    Enjoy your rants and they help understanding. However I am trying to show customer sales receipts and their deposits on my customer statements, but I can only show sales invoices and their payments – is there a method of showing all customer sales and payments on a customer statement?receipts on my customer statements

    • Statements are designed to show activity that affects Accounts Receivable, so Sales Receipts won’t show there. You can try working with a report like the Customer Balance Detail, although you will have to change the filters to get sales receipts to show. And that won’t have aging.

  15. moni says:

    We have a sales order for 7830.02. Customer paid so we created a sales receipt. Now works done and it was a little less so the invoice was processed at 7800.36. What we have been doing in in a line item at the bottom of the invoice we created a ITEM CODE that is Customer Deposit and we show customer their payment there. But in this case Sales Receipt was for 7830.02 and now the invoice is 7800.36 which leave s a over payment of $29.66 – I cant credit a negative amount (obviously)I tried doing it other ways by just showing a credit that still doesn’t work as i don’t want it to reflect any items just general credit. Any ideas would be helpful

    Oh and we use QB Enterprise

  16. Anastasia says:

    Yes, this issue irks me too. In doing my reporting at the month end I generate a list that shows which Invoices have been paid. All my Sales Receipts always show up as Unpaid, then I have to pencil it in that the cash was received. I mean after all these years QkBks can’t solve this problem???? Arrrgggggghhhhhhhh!!!!!!!!!!!!!

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