Customers

Common QuickBooks Online Tasks and Troubleshooting

This guide covers a variety of common tasks, from managing customer invoices and payments to understanding transaction status icons.

Managing Invoice Numbers and Terms

Customizing Invoice Number Sequences

QuickBooks Online automatically sequences invoice numbers, but you can define your own nomenclature. To start a specific sequence (e.g., FRHG0009), simply type that number into the Invoice No. field before saving the invoice. The system will recognize the pattern and automatically generate the next number in the sequence (e.g., FRHG0010) for subsequent invoices.

Setting Standard Payment Terms

Payment terms are applied at the customer level rather than the item level. To set standard terms for a customer:

1. Go to the Sales or Invoicing menu and select Customers.
2. Select the customer’s name to edit their profile.
3. In the Payment and billing section, choose the desired Terms from the dropdown.
4. Click Save.

Every time you create an invoice for this customer, these terms will apply automatically. You can manually change the terms on a specific invoice if needed.

Handling Unpaid Invoices and Bad Debts

Writing Off Bad Debt

If a customer will not pay and you need to write off the amount, do not delete the customer or the invoice. Instead, use a credit memo:

1. Create a Bad Debt Item:

   • Go to Settings (gear icon) > All Lists > Products and Services.
   • Click New and select Non-inventory.
   • Name the item (e.g., “Bad Debt”).
   • In the Income account dropdown, select Bad Debts Expense (you may need to create this expense account in your Chart of Accounts first).
   • Click Save and close.

2. Create a Credit Memo:

   • Select + New > Credit memo.
   • Select the customer.
   • Add the “Bad Debt” item and enter the amount to be written off.
   • Click Save and close.

3. Apply the Credit Memo:

   • Select + New > Receive payment.
   • Select the customer.
   • The outstanding invoice and the credit memo will appear. Select both to ensure the credit is applied to the invoice.
   • Click Save and close.

Handling Payments Taken by the IRS

If the IRS has collected payments directly from your customer on your behalf, you need to record this to reduce your liability without counting it as new income.

1. Create an Other Charge item (not a Payment Item) linked to an Other Current Asset account.
2. Use this item on a Credit Memo for the customer.
3. Apply this Credit Memo to the open invoice.
4. Ensure your unpaid payroll liabilities are tracked in a liability account. You can then apply the amounts from the Asset account to the liability account to reflect that the debt has been paid.

Using Class Tracking on Invoices

Class tracking allows you to track income and expenses by department, location, or other category. Once Class Tracking is turned on in your Settings, you can assign classes on invoices.

1. Open an invoice form.
2. Select the desired Class at the top of the form. This class applies to the entire invoice.
3. You can also assign a class to individual line items by entering a class in the Class column for each specific product or service.
4. Note: If you enter line items before selecting a class at the top of the invoice, those items will not update retroactively. You must assign classes to those items individually.

Understanding Bank Transaction Icons

When viewing your bank feeds or registers, you may see various icons indicating the status of a transaction:

• Lightning bolt: The transaction was entered electronically (e.g., a bank feed download).
• Asterisk (*) or Snowflake: The transaction is marked for reconciliation.
• Check mark: The transaction has already been reconciled.

Known Issues and Workarounds

Special Characters in Custom Fields

We have identified an issue where special characters entered into custom fields may display incorrectly in transaction lists (e.g., displaying as “1&%#4012#*&15” instead of “1/12/15”). Our specialists are currently working on a fix. Please monitor the product updates page for announcements regarding a solution.

Donations and “It’s Deductible”

If you are looking for the “It’s Deductible” tool to calculate values for clothing and household good donations, please note that this feature is part of TurboTax. You can access it via the TurboTax website.