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In the previous lesson you created the invoice for the items that were ordered in the sales order. In the current lesson you are to receive payment from your Customer for these items against the invoice. Later on you will need to adjust this payment against the charge.
To complete this lesson you need to follow the instructions of the previous lessons and create the Sales Order and Invoice.
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When the ordered goods are delivered to the Customer, he receives the invoice according to which he is to send you some sum of money to cover the charge.
When you receive the check from the Customer you need to enter it into the system. The primary question to be solved is to determine the account on which you want to receive the money. Free Accounting offers two options for depositing your payment on the Receive Payments window: you can deposit the money directly into your Bank account or into Undeposited account.
Each payment you receive is usually entered into an account named Undeposited Funds. It is an account type of Other Current Asset.
To receive payment select Bank and Checks | Receive Payments from the Main Menu.
- Select Undeposited Funds account from the Cash/Bank drop-down list.
- Select the Customer - DAYS INN OF TAMPA.
- Enter the reference number - 0000000001 (invoice number), needed for keeping your records.
- Enter the check number - 1.
- Enter the amount - $199.28.
- Press the Ok button.
In the end you will see the following data entered into the fields of the Receive Payments window:
After some period of time you take all the checks that you have on the current moment to the bank and make your bank deposit - you move the money from the Undeposited Funds account into the bank account by selecting Bank and Checks | Deposit Funds from the Main Menu.
While the Deposited Funds account shows each individual payment you received, the bank account shows only the total amount of each bank deposit. This matches the bank statement that shows up each month, making it easier to reconcile the account.
In the Master Transaction Ledger the Payment Received Transaction appears. Two accounts are affected: Accounts Receivable (from which the amount was drawn out) and Undeposited Funds (on which this amount was put).
Now when the money is transferred you need to make reconciliation what you will do in the next lesson.
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