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Subject Author Date
Contract Questions Ted 12-28-2006
Posted by Ted on December 28, 2006, 8:26 pm
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 Hello,

I need some help as I am unsure how to setup something in QuickBooks.

I have a number of contracts in which I receive funds that would be
classified as earned funds and/or deferred revenue (unearned funds). I am
not sure how to enter them into Quickbooks as I need to pull monthly reports
that show the earned cash as well as the unearned cash.

I would like to keep each contract separate and be able to generate reports
so I can provide financial reports to management. Presently, I am using a
lot of Excel files and it is becoming a labor intensive.

Any suggestions?

Another question is does any know of a sample quickbooks company that I can
download to see how classes work and how I might be able to utilize them. I
am not sure if it will help with the above or not.

Any help would be appreciated.

Thanks.



Posted by Bob on January 3, 2007, 1:21 am
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 Ted,

I would think of your "earned" and "unearned" funds as I would a
"Customer Deposit". A "Customer Deposit" is money received from a
client for work to be performed in the future. Therefore, it is not
revenue although I receive cash but it is a liability since I must
provide the service or goods.

To handle the situation, I would create the "Customer Deposit" account
as your "Deferred Revenue" account. You should set-up an item that
allows you to invoice the "deferred revenue" with the offset going to
the liability account as opposed to the revenue account. Progress
billings would then have the revenue item with the deferred billing
item on the same invoice drawing monies from the deferred revenue
account.

So, the deferred item is called "Deferred". You invoice a client for
$100 in Deferred that increases AR and increases the Liability. The
client pays you, decreasing AR and providing cash. When you bill the
client on an invoice using your revenue item, "Sales", for $100 then
the next line in the invoice is the "Deferred" item for -$100.

Works extremely well. I have had up to 150 of these little buggers
running around at any one time in the "Customer Deposit" account. I
reconcile the liability account each week to a "zero" balance. BB is
always $0 and EB is always $0. Withdrawals must match a deposit.
Outstanding items are "active".


Posted by Ted on January 4, 2007, 7:13 pm
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Bob,

Thanks. Is there a report that can be generated that will give a customer
detail transactions summary of so the client can receive a monthly
statement?

Do you use an invoice or sales receipt to record the initial customer
deposit? Would it not overstate your AR?

Thanks

----- Original Message -----
Newsgroups: alt.comp.software.financial.quickbooks
Sent: Wednesday, January 03, 2007 1:21 AM
Subject: Re: Contract Questions


> Ted,
>
> I would think of your "earned" and "unearned" funds as I would a
> "Customer Deposit". A "Customer Deposit" is money received from a
> client for work to be performed in the future. Therefore, it is not
> revenue although I receive cash but it is a liability since I must
> provide the service or goods.
>
> To handle the situation, I would create the "Customer Deposit" account
> as your "Deferred Revenue" account. You should set-up an item that
> allows you to invoice the "deferred revenue" with the offset going to
> the liability account as opposed to the revenue account. Progress
> billings would then have the revenue item with the deferred billing
> item on the same invoice drawing monies from the deferred revenue
> account.
>
> So, the deferred item is called "Deferred". You invoice a client for
> $100 in Deferred that increases AR and increases the Liability. The
> client pays you, decreasing AR and providing cash. When you bill the
> client on an invoice using your revenue item, "Sales", for $100 then
> the next line in the invoice is the "Deferred" item for -$100.
>
> Works extremely well. I have had up to 150 of these little buggers
> running around at any one time in the "Customer Deposit" account. I
> reconcile the liability account each week to a "zero" balance. BB is
> always $0 and EB is always $0. Withdrawals must match a deposit.
> Outstanding items are "active".
>




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