Other Types of Items

 If a line on a sales form isn’t a service or a product, read this section to figure out the type of item you need.

 Other Charge

The Other Charge item is aptly named because you use it for any charge that isn’t quite a service or a product, like shipping charges, finance charges, or bounced check charges. Other Charge items can be percentages or fixed amounts. For example, you can set up shipping charges as the actual cost of shipping, or estimate shipping as a percentage of the product cost.   Types of Items

If a customer holds back a percentage of your charges until you complete the job satisfactorily, create an Other Charge item for the retainer (the portion of your invoice that the customer doesn’t pay initially). Then, when you create the invoice, enter a negative percentage so QuickBooks deducts the retainer from the invoice total. When your customer approves the job, create another invoice, this time using another Other Charge item, called Retention, to charge the customer for the amount she withheld.

For Other Charge items, the checkbox for hiding or showing cost fields is labeled “This item is used in assemblies or is a reimbursable charge”. Turn on this checkbox when you want to set the Cost field to what you pay and set the Sales Price field to what you charge your customers. You’ll see the same sets of fields for purchases and sales as you do for Service and Non-inventory Part items.

Alternatively, you can create charges that don’t link directly to expenses by turning off the “This is used in assemblies or is a reimbursable charge” checkbox. You can then create a percentage, which is useful for calculating shipping based on the value of the products being shipped, as shown in Figure 5-9. When you turn off the checkbox, the Cost and Sales Price fields disappear, and the “Amount or %” field takes their place. If you want to create a dollar charge (like the dollar value for a country club’s one-time initiation fee), type a whole or decimal number in this field.

Figure 5-9:╇ To create a percentage-based charge, type a number followed by % in the “Amount or %” field. To set a dollar value, type a number as shown here.   Types of Items

Note: When you add a percentage-based Other Charge item to an invoice, such as shipping, QuickBooks applies the percentage to the previous line in the invoice. If you want to apply the Other Charge percentage to several items, add a Subtotal item (explained next) to the invoice before the Other Charge item.

Subtotal

You’ll need Subtotal items if you charge sales tax on the products you sell, or if you discount only some of the items on a sales form. You need to create only one Subtotal item, because a Subtotal item does just one thing: it totals all the amounts for the preceding lines up to the last subtotal or the beginning of the invoice. That means you can have more than one subtotal on an invoice.

For example, you can use one Subtotal item to add up the services you sell before applying a preferred-customer discount and a second Subtotal item for product sales when you have to calculate shipping. Because you can’t change a Subtotal item’s behavior, Subtotal items have just two fields: Item Name/Number and Description. You can type any name and description you wish in these fields, but in practically every case, Subtotal says it all.

Group

Group items are great timesavers, and they’re indispensable if you tend to forget things. As the name implies, a Group item represents several related items you often buy or sell together. Create a Group item that contains items that always appear together, such as each service you provide for a landscaping job. That way, when you add the Landscaping Group item to an invoice, QuickBooks automatically adds the Service items for phases, such as Excavation, Grading, Planting, and Cleanup. As shown in Figure 5-10 you can show or suppress the individual items that a Group item contains. You can also use a Group item to hide the underlying items, which is useful mainly when you create fixed-price invoices and you don’t want the customer to know how much profit you’re making. Here’s how you set up a Group item to do these things:

• Group Name/Number. Type a name for the group that gives a sense of the individual items within it, such as Landscaping Project.

• Print items in group. To show all the underlying items on your invoice, turn on the “Print items in group”

• Item. To add an item to a group, click a blank cell in the Item column, shown in Figure 5-11, and then choose the item you want. You can also create a new item by choosing <Add New> on the drop-down list

• Qty. When you create a Group item, you can include different quantities of items, just like a box of note cards usually includes a few more envelopes than cards. For each item, type how many you typically sell as a group. If the quantity of each item varies, type 0 in the Qty cells. You can then specify the quantities on your invoices after you add the Group item.   

Other Types of Items

Figure 5-11:╇ In the New Item or Edit Item dialog box, when you work on a group item, the background of the Description column is a different color to indicate that you can’t edit these cells. That’s because QuickBooks fills in the Description cells with the contents of each individual item’s Description field.

Discount

A discount is an amount you deduct from the standard price you charge. Volume discounts, customer-loyalty discounts, and sale discounts are examples, and Quick- Books’ Discount item calculates deductions like these. By using both Subtotal and Discount items, you can apply discounts to some or all of the charges on a sales form. Discount items deduct either a dollar amount or a percentage for discounts you apply at the time of sale, such as volume discounts, damaged-goods discounts, or the discount you apply because your customer has incriminating pictures of you.

 Note: Early payment discounts don’t appear on sales forms because you won’t know that a customer pays early until long after the sales form is complete. You apply early payment discounts in the Receive Payments window.

The fields for a Discount item are similar to those of an Other Charge item with a few small differences:

• Amount or %. This field is always visible for a Discount item. To deduct a dollar amount, type a positive number (whole or decimal) in this field. To deduct a percentage, type a whole or decimal number followed by %, like 5.5%.

• Account. Choose the account to which you want to post the discounts you apply. You can post discounts to either income accounts or expense accounts.   chapter 5: setting up invoice items 119 Other Types of Items When you post discounts to an income account, they appear as negative income, so your gross profit reflects what you actually earned after deducting discounts. Posting discounts to expense accounts, on the other hand, makes your income look better than it actually is. The discounts increase the amounts in your expense accounts, so your net profit is the same no matter which approach you use.

• Tax Code. If you choose a taxable code in this field, QuickBooks applies the discount before it calculates sales tax. For instance, if customers buy products on sale, they pay sales tax on the sale price, not the original price. If you choose a nontaxable code in this field, QuickBooks applies the discount after it calculates sales tax. (You’ll rarely want to do this because you’ll collect less sales tax from customers than you have to send to the tax agencies.)

Payment

When customers send you payments, you can record them in your QuickBooks file using the Receive Payments command. But if you’re in the middle of creating invoices when the checks arrive, it’s easier to record those payments by adding a Payment item to the customers’ sales forms. Payment items do more than reduce the amount owed on the invoice, as Figure 5-12 explains.

Beyond the Type, Item Name/Number, and Descriptions fields, the Payment item boasts fields unlike those for other items. These fields tell QuickBooks the method of payment that a customer uses and whether you deposit the funds to a specific bank account or group them with other undeposited funds. For example, you group payments with other undeposited funds if your customers send checks and you save them up so you can make one trip to deposit them all in your bank. For credit card payments, banks sometimes transfer them into a bank account individually and sometimes group all the charges for the same day.

Here’s what the payment fields do:

• Payment Method. Choose the payment method, such as cash, check, or brand of credit card. In the Make Deposits window, you can filter pending deposits by this payment method.

• Group with other undeposited funds. Choose this option if you want to add the payment to other payments you received. That way, when you add this Payment item to a sales form, QuickBooks adds the payment to the list of undeposited funds. To actually complete the deposit of all your payments, choose Banking➝Make Deposits.

• Deposit To. If payments flow into an account without any action on your part, such as credit card or electronic payments, choose this option and then choose the bank account in the drop-down list.     â•‰â•‰Setting Up Sales Tax