QuickBooks financial software provides an easy to use tool for businesses to track invoices and sales receipts. However, many users don't understand the difference between invoices and sales receipts. When used correctly, invoices and sales receipts provide an accurate financial accounting for the business. This tutorial explains the main differences between sales receipts and invoices, providing a clear explanation of each.
Invoices are used when a customer is not paying the company at the time the items or services are sold. Invoices may be provided at the time services are completed or at specific intervals the company has set up. Invoices provide a means of tracking customers who pay only a portion of money owed at any given time period. Invoices may be sent out for work that is completed and then billed progressively. If this occurs, any payments made to the progressive invoice will appear. This offers the customer a statement of services rendered and payments made all on one clear invoice.
Using an invoice creates a log of how much customers owe the company. This information is transferred to an accounts receivable report that tracks how much each customer owes. Invoices may also be used when using estimates. Estimates are used to provide an approximate cost of items and services. Once a customer agrees to use your services or purchase items from your company, the estimate can be converted to an invoice. Examples of business people who use invoices are photographers, builders and consultants.
Sales receipts are used when a customer gives payment at the time the items or services are provided. Sales receipts are considered "Point of Sale." Items or services are purchased with any method of payment accepted by the company. In return, the customer receives a sales receipt as proof of payment in full. If the company does not need to track how much a customer owes; then sales receipts should be used.
Sales receipts may be used when the company has no need to track sales for each customer. Record-keeping may be simplified by recording all sales receipts for a specific length of time on a single receipt. The sales receipt becomes a summary of sales for the specific time period. Examples of companies that would use sales receipts are restaurants, hair salons and pet supply stores.
Invoices appear on aging reports; while sales receipts do not. The aging report may then be used to contact customers who owe money. Invoices or statements may be sent at regular intervals to remind customers to make a payment.
Sales receipts show a "Paid" stamp on the screen at the time they are entered. Invoices only show the "Paid" stamp once full payment has been received. While this is only a visual, it provides accounting personnel a quick overview when speaking with customers or reviewing jobs.
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