How to Create Invoices in QuickBooks Desktop
Invoices are a crucial part of running any business. They allow you to bill clients for services rendered, track accounts receivable, and have a proper paper trail for tax purposes. QuickBooks Desktop is one of the most popular accounting software programs used by small businesses and accountants alike to handle all aspects of financial management, from tracking income and expenses to invoicing clients and managing payroll. In this comprehensive guide, I’ll walk you through the entire process of creating professional invoices in QuickBooks Desktop, from setup to sending. Whether you’re just starting out or looking to optimize your workflow, read on to learn how to create effective invoices that get you paid faster in QuickBooks Desktop.
Chapter 1 – Setting Up QuickBooks Desktop for Invoicing
Before you can start invoicing clients, you need to make sure QuickBooks Desktop is set up properly. Here are the key steps involved:
- Download and install the latest version of QuickBooks Desktop. As of this writing, the current version is QuickBooks Desktop Pro 2023.
- Open QuickBooks and go through the EasyStep Interview process. This sets up your company file and preferences.
- Enter all your business and contact information accurately under Company Settings. This will populate your invoices.
- Set up accounts receivable by enabling invoices and estimates. Go to Edit > Preferences > Sales & Customers.
- Create subaccounts under Accounts Receivable to track invoices and other sales documents. For example, create an Invoices Receivable subaccount.
- If charging sales tax, set up your sales tax rates and agencies under Sales Tax Settings.
- Add all your products and services under Lists. These can be added to invoices.
- Under Customers, enter client details. Make sure to include billing addresses.
Once these steps are complete, your business information will automatically populate future invoices. Now let’s look at actually creating and sending invoices.
Chapter 2 – How to Create New Invoices in QuickBooks Desktop
Here is the step-by-step process to create a professional invoice in QuickBooks Desktop:
- Go to Customers > Create Invoices. Alternatively, go to Home and click Invoices.
- Select the Customer name. Their billing address and contact information will auto-populate from your Customer List.
- Enter the Invoice Date. You can change it later if needed.
- Enter the Invoice Number starting from 1001, 1002, etc. QuickBooks will automatically increment the invoice number on the next invoice.
- Select the proper Terms based on what you’ve agreed with the client, such as Net 30.
- In the line item area, add and describe each product/service being charged. Click the Items tab to select from your list or create new items on the fly.
- The Rate and Amount will populate automatically when you select existing Items. You can edit these fields as needed.
- Enter a detailed Description for each line item. This makes it clear to your client what they are being charged for.
- Add any necessary Sales Tax rates that apply as separate line items.
- Apply any Discounts or Credits that the client is entitled to receive.
- Click Save & Close to save the invoice. You can also choose Save & New to create another invoice right away.
Some tips for this process:
- Group line items related to the same job and include reference numbers.
- Check carefully for accuracy of products/services and amounts charged.
- For faster invoicing, create invoice templates or memorized transactions.
- Set up custom fields in invoices to capture key client data.
Chapter 3 – How to Edit or Customize Invoices in QuickBooks
One benefit of QuickBooks Desktop is the ability to easily customize the look and content of your invoices. Here are some options:
Edit Existing Invoices:
- To edit a saved invoice, open it and click Edit. Make any changes required then click Save & Close.
- You can change the invoice date, number, terms, items, quantities, rates, descriptions and more.
- Adding a Customer Message is a great way to add notes to a client. Enter it under Print Later.
Customize Invoice Templates:
- Create customized templates for different clients or projects.
- Go to Lists > Templates > Invoices > New.
- Select an existing invoice as the base. Update logo, headers, footers, formatting, fields etc.
- Save it as a template by entering a name. Use it when creating new invoices.
- You can have multiple templates and toggle between them.
- Add your logo by going to Lists > Customer & Vendor Profile Lists. Click New and add logo.
- Change Columns shown such as Price and Description. Go to Customize Columns in the Create Invoice window.
- Modify text that appears via Company Preferences. For example, change Invoice to Bill.
The beauty of QuickBooks is you can fully tailor invoices to match your business needs and branding. Take advantage of the powerful customization options available.
Chapter 4 – How to Email Invoices Directly from QuickBooks Desktop
Now that your invoice is complete, you need to get it over to your client for payment. QuickBooks makes it easy to email invoices directly from the software:
- With the invoice open, go to the Home tab and click Email.
- Select which Email Service to use. Common options are Outlook and Gmail.
- Choose the Template you want to apply to the emailed invoice. Make sure it includes your logo, colors etc.
- Edit the Subject line and Message as desired. Add a greeting, notes about payment terms etc.
- Enter the Client’s Email Address. Make sure it’s accurate to avoid bounced emails.
- Click Send. The invoice will instantly be emailed as a PDF attachment.
- The invoice status updates to Sent in QuickBooks.
Helpful tips for emailing invoices:
- If the client requires a paper copy, print the invoice first before emailing.
- To save time, create QuickBooks invoices directly from Outlook using the Add-in.
- Make sure the client’s email address is properly entered to avoid errors.
- Follow up with a phone call to confirm the client received the emailed invoice.
Emailing invoices is fast, convenient, and environmentally friendly. QuickBooks ensures professional invoices get delivered instantly to your customers.
Chapter 5 – Receiving Payments Against Invoices in QuickBooks
Now that you’ve sent the invoice comes the important task of getting paid. Here are the steps for recording payments in QuickBooks Desktop:
- Go to Customers > Receive Payments.
- Enter the Customer name who paid.
- Select the payment method: Check, Cash, Credit Card, etc.
- Enter the payment amount received.
- Select the invoice(s) that the payment should be applied to.
- If only partially paying an invoice, enter the amount to apply.
- Select the proper deposit account for the payment.
- Add any necessary memos or notes.
- Click Save & Close to record the payment.
Some best practices:
- Apply payments to the oldest outstanding invoices first.
- Send payment receipts to customers after recording payments.
- If overpaying, leave the credit as unapplied funds against their name.
- For refunds, create a Credit Memo linked to the original Invoice.
- Deposit payments in bank promptly to reconcile later against bank statements.
The faster you enter received payments in QuickBooks, the more up-to-date your Accounts Receivable aging will be. This helps avoid future collection issues.
Creating professional invoices and getting paid quickly are crucial to running a healthy business. QuickBooks Desktop provides a full-featured invoicing system that you can completely customize to match your workflow needs. Implementing the best practices in this guide will ensure your invoices look great, communicate effectively with customers, and help improve your cash flow. Accurate, timely invoicing creates transparency and trust with clients leading to positive, long-term relationships. With its intuitive interface and robust options, QuickBooks Desktop is the go-to solution for creating invoices that work for your business.