How to Set Up Accounts Receivable in QuickBooks

Accounts Receivables are forms like invoices or bills. If you want to maintain them within QB then continue reading for how to “set up accounts receivables in QuickBooks“.

Still, they are used for a completely different purpose. Accountants use accounts receivables to record payments that are due to them. Once the time period for the A/P is complete, they collect the money from the debtor. Accounts receivables are treated as current assets while accounts payables are treated as current liabilities.

Know About Chart of Accounts and How it Helps

A chart of accounts is one of the most useful features of QB. This tool maps out all the assets, liabilities, income, expenditure, and un-categorized accounts in QB. Through this tool, users can get to any account easily. You can search for a particular account and make reports for it. Thus by making reports, you can easily find all the forms and transactions linked to that particular account. You can even narrow down your search by using multiple filters.

QuickBooks Accounts Receivable – Account Receivables using COA

QB automatically generates an accounts receivables account for all its users. This account automatically imports all the accounts receivables created in QB. Also, users can access this account via a chart of accounts. You can work with multiple accounts receivable accounts. It is easy to go wrong with accounts receivables. You need to take them into account while filing taxes. One can easily get the wrong numbers and attract hefty penalties by not generating accounts receivables.

Benefits of Setting up QuickBooks Accounts Receivables

  • Keep track of money payments from all debtors
  • Email or call debtors for the due amount
  • Send forms directly to debtors for reminding them about payments
  • Generate reports for analyzing patterns regarding Accounts Receivables.

How to Set up Accounts Receivables in QuickBooks

The easiest workflow to follow while working with Accounts Receivables is as follows:

  1. Enable Estimates (Estimate of the total amount the goods and services will cost.)
    • Log into QuickBooks as an admin,
    • Go to the Edit Menu in QuickBooks,
    • Select Preferences,
    • Select jobs and Estimates,
    • Select the Company Preferences Tab,
    • For the question, “Do you need Estimates to be created” mark yes.
    • Click on OK.
  2. Create an Estimate
    • Go to customers,
    • Click on Create Estimates,
    • Add or select a customer or customer job,
    • Fill in all the necessary information,
    • Enter sale items or services,
    • Click on Save and Close.
  3. Generate Sales orders
    • Go to Preferences from the Edit menu,
    • Select Sales and Customers,
    • Click on Company Preferences,
    • Enable sales order,
    • Hit Ok,
    • Go back to the customer and Click on Create Sales Order,
    • Enter all the necessary information,
    • Click on Save and Close.
  4. Generate invoice.
    • Go to the creative menu and select invoices,
    • Click on New Invoice,
    • Click on create an invoice from Sales Order/ Estimate. Select on the basis of the document you created in the previous steps.
    • Click on Save and Close.
  5. Record Payment
    • Click on Receive Payments from the home screen.
    • Select the customer from whom you received the Payments.
    • Enter all other necessary information such as the amount of transaction, date, and so on.
    • Enter any check number if the payment has been made through a check. This will help you in keeping track of the transaction.
    • Select the invoice that you want to apply for this payment.
    • Enter any memo that you want to. The memo will make the transaction more comprehensive.
    • Click on Save and Close.
  6. Create Deposit
    • Go to the home screen,
    • Click on banking from the left navigation panel,
    • Click on record deposit/ make a deposit,
    • Select all the payments that are to be deposited.
    • Select the bank account that the deposit is to be made.
    • Enter all necessary information,
    • Click on Save and Close.

You have successfully worked with a complete Accounts Receivable. You can follow the entire workflow for creating and recording any other accounts payable. You can go to the chart of accounts and generate reports using the accounts receivable account. You can choose between creating a sales order and an estimate. Users don’t need to create both of these forms for generating and working with accounts receivables.

Hope this article helped. If you need any further info. you can directly get in touch with our QuickBooks Experts and get all the customized help you want. You can even give us a call at our QuickBooks Canada Consultant for Canada, USA and U.K. talk to our Experts now.