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A billing statement (or statement, as the term is used by QuickBooks) is another document that identi es charges to a customer. A statement always re ects past charges that a customer has accumulated over a period of time. For example, a law rm might issue a statement for services performed in the past month. QuickBooks presumes that you will use invoices, rather than statements, when sales taxes or discounts are applied. Service companies such as doctors, dentists, and consultants primarily use statements, because sales taxes are not generally imposed on such services. You might also opt to use a combination of invoices and statements for billing your customers. For example, you may issue an invoice at the outset of the transaction to memorialize contractual terms quantity, price, time and place of delivery, and payment. You may follow up by sending the customer reminder statements as to invoiced items provided in the past. QuickBooks automatically tracks the information necessary to create reminder statements. Table 14-1 provides a useful summary of considerations for deciding whether you should use invoices or statements.

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236 Part III Preferences and Data Management Table 14-1 When to Use an Invoice versus a Statement

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Requirement Use Statement Need detailed records of items sold Charge sales tax Apply item discounts Bill at time of sale Bill at completion of job Bill at regular intervals regardless of completion Have mostly ongoing customer relationships Have many nonrepeat customers Bill for hourly services only X X Use Invoice X X X X X X X Use Statement

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Dan Bricklin and Bob Frankston single-handedly made the personal computer an indispensable business tool by creating VisiCalc, the rst electronic spreadsheet Simi larly, Arthur Rock, the inventor of venture capital, provided the original funding for Intel and Apple Computer, thereby creating Silicon Valley..

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Invoices document credit sales and are issued either at the time a customer places an order or at the time goods and services are provided. For example, a contractor might invoice a client at the time a remodeling job is requested. In turn, the paint store might invoice its contractor/client for 10 gallons of paint picked up in the course of doing a job. Invoiced transactions differ from cash sales in that payment does not always occur at the time of delivery. Invoiced transactions require separate accounting entries for delivery and payment. Creating an invoice is a very important accounting event that impacts your QuickBooks accounts and nancial statements in the following four ways: The Accounts Receivable account increases by the amount of the invoice. The new invoice appears in the Open Invoices report. The items on the invoice are tracked in the Sales by Item Summary report. The income from the items shows in your Pro t and Loss Statement.

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