Sales Receipts in QuickBooks Online: Why and How to Use Them

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In QuickBooks Online, you have two ways to record a sale. A sales receipt or an invoice. In this blog post, we’ll go over sales receipts. When to use them and how to create them.

Quick Instructions for Creating a Sales Receipt:

  1. Click the +New button in the upper left corner
  2. Click Sales receipt under CUSTOMERS
  3. Fill in the sales receipt as needed
  4. Click the green Save button

Keep reading for a complete walkthrough with screenshots:

Why Use a Sales Receipt

Sales receipts have two main uses. The first is to record a sale when a client pays at the time service is rendered. (An invoice is used when payment is collected later).

Sales receipts are also used to record sales at the end of a day/event when you want to track what was purchased.

For example, you set up a booth at a local farmer’s market. You sell various products throughout the day.

At the end of the day, you could create a deposit noting how much you made. Or, you can create a sales receipt. 

Creating a sales receipt allows you to track how much of each product you sold at the fair. Something you cannot do using a deposit.

Another reason to use Sales Receipts versus just recording sales as a single deposit is that you can run useful reports.

Sales by Product/Service Summary Report

This report will only be useful to you if you track all sales of your various products/services. Here’s an example of this report:

Sales by Product/Service Summary report in QBO

It shows you:

  • Quantity – How many units you’ve sold
  • Amount – The total dollar value sold
  • % of Sales – What percentage of your total sales is this product?
  • Avg. Price – The average price you’ve sold a product for
  • COGS – How much you pay for the product
  • Gross Margin – How much money you make on the product (COGS – Amount)
  • Gross Margin % = Gross Margin ÷ Amount * 100

How to Create a Sales Receipt

To create a sales receipt click the +New button in the upper left corner.

Then select Sales Receipt under CUSTOMERS.

Creating a sales receipt using the +New menu in QuickBooks Online.

In the top section of the Sales Receipt screen you can enter the following…

  • Customer – Who purchased the items
  • Email – For emailing a copy of the sales receipt
  • Sales Receipt date – When the products were purchased
  • Shipping information – if applicable
  • Tags – For tracking within QBO
  • Reference no. – Optional
  • Payment method – How they paid
  • Deposit to – What account the money is deposited into
  • Sales Receipt no.
  • Location – If it’s turned on
  • Location of sale – important if you charge sales tax

In the bottom portion of the Sales Receipt is where you add the products/services that were purchased.

Here’s an example:

Example QBO Sales Receipt.

What Happened Behind the Scenes

Every transaction you create in QBO has a corresponding Journal entry. You can view this by clicking the More in the gray bar across the bottom of the screen (you’ll only see this after the transaction is saved). Then click Transaction Journal.

Opening the Transaction Journal for a Sales Receipt in QBO.

What the journal entry shows you is where the money all went. 

Here’s an example of what it looks like:

Journal entry for a sales receipt in QBO.

In my example, $109 is debited into the account Payments to deposit. This may be Undeposited Funds for you.

$99 of those funds is credited to the account Services and the rest is going to two tax accounts. As with all journal entries, the debits equal the credits.

You now know why you’d want to use a sales receipt versus an invoice or deposit and how to create one.

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This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Gentle Frog, LLC does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Gentle Frog, LLC does not warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers and viewers should verify statements before relying on them.

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  • Save time and money by streamlining your bookkeeping process and reducing errors.

  • Learn how to identify trends in your financial data so you can make smarter business decisions.

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