Last week I worked with Angelo LaMarco, videographer at Digital Edge Video Productions. Angelo filmed and produced numerous videos for the Rock & Rock Hall of Fame.
One of the bookkeeping issues we discussed was when to use sales receipts and when to use invoices in QuickBooks. I explained to Angelo that you create invoices when you expect payment at a later date. You send the invoice to your customer by mail or email. Then when you get paid by your customer, you apply the payment to the invoice before depositing it in your checking account.
If you receive payment when you finish the job, and you don’t have to send an invoice, then you should create a sales receipt. A sales receipt looks just like an invoice, except there is a place on this form to indicate how much you were paid and in what form was payment made, i.e. check, credit card, cash, etc. You can then send a copy of the sales receipt to your customer if you would like. Using a sales receipt is a one-step process, whereas using an invoice is a two-step process.
Angelo created invoices, but he created his invoices using an invoice template he set up in Microsoft Word. So instead of creating another invoice in QuickBooks, and then receiving payment toward that invoice, he will now create a sales receipt when he receives payment from his customers.
