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How to handle prepays and prepay discounts in QB?

Discussion in 'Business Operations' started by DLS1, Mar 15, 2005.

  1. DLS1

    DLS1 LawnSite Bronze Member
    Posts: 1,619

    First year using quickbooks.

    How do you handle in quickbooks a customer who prepays for fert/weed control for the year and you give them a 10% discount for the prepay. I want to enter it in an invoice and then have it show up as a negative amount (credit for customer) on monthly billing statement until all the applications are done and then it would show up as zero balance.
    They will have other services done my me during the year (i.e. mowing, shrub pruning,etc.) so I want to keep those as separate items on the invoice.

    Can I create an invoice that shows spring cleanup for $200 and a separate invoice item as fert/weed control (5 step for $250) but enter it as $0.

    Then receive payments for $200 and receive payments for $250 (fert/weed). Since I have not invoiced the $250 yet it should show a credit of $250 on the customer statement. Now how do I enter a 10% prepay discount of $25 to show up on the invoice and customer statement so they can see the $250 plus the $25 discount.

    Each time I do a fert/weed application I would add it to the invoice as $50 (not showing the discount) and that would reduce the credit to customer on the statement.

    I am confused and hope this isn’t to confusing what I am saying. How would you do it?
  2. SodKing

    SodKing LawnSite Bronze Member
    Posts: 1,648

    I have done this and it is not the way to go. If you receive the cash as a receivable it goes towards the clients account and does show up as a negative balance due thus screwing up the appearance of the account until the fall. It is better to take it in as a simple cash receipt towards a liability account and then apply it as it is used towards the clients receivables. HUH??? We have been doing it wrong for years and it has negatively impacted the receivables. It is truly a liability and should be reflected as thus. I have a meeting with my financial adviser who is working on this, if you PM me I will advise after that meeting on Thursday.

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