I have a question, my 7/7/07 wedding just cancelled today, so I am now open on that date, but my question is

How do I clear out the income in quickbooks so that it doesn't count as income and tax liability? if that makes sense. Do I issue a refund to the custom or something, but I haven't received the income, so if I issued a refund it would show up as a loss of income.

Please help, how do I clear off their balance and not mess up my books?

Big D

Some questions....

When did you record the initial entry?
Are you a cash or accrual based business?
Are you going to actually refund all the money or keep some?

I recorded the initial entry last month when I booked it, they paid $250 as a retainer fee (non refundable) and have an open balance of $1200. I am a cash based business (I don't know if I set it up right in quickbooks because it always defaults to accrual and I have to change reports to cash) I will be keeping all of the deposit.

Thanks for the quick reply Nate

Dustin,

Do you issue invoices when the bride books the date? If so, you can just void the invoice.

Find the invoice and then click Edit>void invoice.

Let me know if you have more questions

Melissa O

Yes, after they sign the contract and pay the deposit, I go home and enter an invoice in QB. If I void the invoice, will that mess up with my books and cancel out the deposit too?
thanks

I just read your reply.


If you have booked the invoice you can:

1) void the receipt and create a new one for $250 or

2) issue a credit memo for $1200 and apply it to the invoice

If the $250 is included in your deposit with other money I would do #2
if it was deposited by it's self, then voiding the invoice will create a credit on the job and then you will post a new invoice for the $250 and it will zero out.

That sounds more confusing than it really is

Mel

Dustin, the best way is to simply adjust the invoice down to $250 and note what happened. At that point, it should show as 'paid' and no longer be on the outstanding list.

That worked like a charm, thanks again Nate and Melissa

Good! I just posted an article how to setup some things in QB and I think cash is the best accounting method for photographers, since you won't be liable for the income if you didn't receive a payment yet.

Here is how you can do for your case in QB:

Recording a return
Use the Create Credit Memos/Refunds window to record a return in either of these
situations:
• A customer brings back items for which you have already recorded a payment for an
invoice or a cash sale.
• A customer cancels an order for items for which you have already recorded a payment
for an invoice.
Note: If you use billing statements, you can enter a negative statement charge to record a
return.

To record a return:
1 Choose Customers > Create Credit Memos/Refunds.
2 Fill in the window, entering the returned items in the line-item area.
QuickBooks decreases the income accounts of the invoice items by the amount of the
return.
3 If you plan to print the credit memo for your customer, you can enter a customer
message.
4 Click OK.
QuickBooks enters a negative amount in your A/R register, indicating that you owe
this customer this amount.

To print a credit memo for the returned items:
• Choose File > Print Credit Memo.
To write a refund check for the credit amount:
1 Display the credit memo for the amount you’d like to refund, and then click Refund.
Leave Accounts Receivable as the account in the detail area of the refund check. This
ensures that the credit and refund are correctly accounted for in your records.
2 Make sure all the information on the check is correct.
3 Select the “To be printed” checkbox to print this check later, or press x P to print the
check now.
4 Click OK.
Now that you’ve recorded the credit memo and check, you need to connect the check to the
credit memo in the Receive Payments window so that QuickBooks can track this
transaction.

To connect the refund check to the credit memo:
1 Choose Customers > Receive Payments.
2 Choose the customer to whom you just wrote a refund check.
You’ll see the amount of the credit included in the Existing Credits field and the refund
check in the bottom section of the window.
3 On the Refund Chk line, enter the credit amount (this is the same as the check amount)
in the Payment column and press Tab.
4 Click OK.
The refund check is now “linked” to the credit memo you wrote for this customer.
In the line-item area, enter the returned items.

To apply a credit amount to an invoice or billing statement:
1 Choose Customers > Receive Payments.
2 Choose a customer’s name.
You’ll see the credit amount in the Existing Credits field.
3 Select the “Apply Existing Credits?” checkbox to apply the credit amount to any invoice
for this customer.
4 Click OK.
When you record a return, you can void an invoice or a billing statement if you haven’t
received a payment yet. You retain a record of what was returned, and you can edit the
memo on the invoice or statement to state the reason for the return.

To void an invoice or billing statement:
1 Display the original invoice or statement.
2 Choose Edit > Void Invoice, and then click OK.
QuickBooks enters the word VOID: in the Memo field.