Using and Managing Prepayments

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Hi, today we're going to talk about prepayments. It's quite common in HomeWatch for your customers to pay you ahead of time for upcoming visits that you're going to do. So there's really two schools here.

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Number one is if they're just going to pay you, you know, maybe when you first sign them up for a couple extra visits or maybe the first months of visits up front and then after that you're just going to bill them normally. There's no reason to do anything extra. Just go ahead and put those prepayments in as a cash receipt by clicking here in QuickBooks and save receipt payment and then you can just put in that person's receipt and then be able to apply it to the invoices once you invoice them.

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So that will show that they have a credit balance, etc. The other flip side there is you might take prepayments for the whole season or for a number of months ahead. In that case, you could do the same thing and it will show you like a negative balance on your accounts receivable and that you have a lot of things coming in or you can use the prepayment management system that we have built into our HomeWatch app for Method by using the integration between Method and QuickBooks to the maximum and manage these prepayments.

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Let me show you an example of how that works. So we have a series over here in Method that we have created for a client called Craig Cassidy. So Craig has now been assigned this series and we're going to be billing him $60 a week for picking up his mail and doing his home visits.

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Craig wants to pay us for about six months worth of services ahead. So what we'll do is we'll generate an invoice to him for six months worth of services at $60 a week and he can pay that and then we want to keep track of how many visits are left and how much money is left on his account each time that we bill him ahead. So let's go into QuickBooks.

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What we're going to do is we're going to do an invoice for the prepayment. Now this assumes two things. It assumes number one that you have a product code for customer prepayments and then you also have a chart of accounts account for prepayments.

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How to do that is covered in a blog. I'm not going to do that in this video but I'm going to show you how it's used in this video. So we're going to create a new invoice for Craig's prepayment.

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So let's put in Craig. We'll bring up his customer. We're going to come down here and say customer prepayments.

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It's very important that you have a product code that says customer prepayments and it will then say this is a deposit. You can put six months services or whatever you want to appear on the invoice here. And we know that six months weekly is going to be let's say 25 visits and we're billing him $60 per visit, $55 for the home visit and $5 for mail.

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So Craig is going to prepay us $1,500 in this case. So this is all we need to do. Let's save this item.

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It's now going to create that invoice. We would then probably send the invoice to him. Let's take a look at it.

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Just see what it looks like. Okay, so here's our invoice, customer prepayments, $1,500, right? And we had some previous credit on there for him. That's not a problem.

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He can go ahead and just pay us what he owes us. And the important thing is we want to show customer prepayments as a code, 25 visits at $60. I'm going to save and close.

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Now, he's paid that bill. He now has a credit. How do we use that? Well, the most common way to use that is when we generate an invoice for these prepayments, it will show what his balance is.

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Let's go out and take a look. If we click on our HomeWatch customers app, you're familiar with this already from setting up your customers. Up top, you'll see a link for prepayments.

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When I click on the prepayments list item right here, this will bring up a list of all of the clients I have that have prepayments. And you'll see here's Craig Cassidy in the middle. We have prepaid 25 visits for $1,500.

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If you click on any of these items here, it will also bring up the details behind it. Well, right now, if I click on Craig, the only detail we have is the $1,500 that he has paid so far. So how does it deduct? Well, let's go through that process here easily.

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I'm going to go back to my HomeWatch admin, and we still have Craig Cassidy, and I've got him listed here. He's got two visits in April and four in May. Let's go ahead and just invoice through May.

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It's now June 1st. We're going to invoice through May. So let's go ahead and click invoicing.

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I'm going to highlight here that I'm going to invoice through the end of May. And let's invoice date of June 1st. Just to keep this pretty clear.

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If I click on Craig Cassidy and say show the work orders, you see we've got six. So it's exactly what we expected, is that it would invoice six of those based upon what we saw on the work order list. So we see the six work orders we expect.

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Let's hit the create work orders or create invoice button here for selected customers. This will go out, grab those six, generate an invoice. We'll hit okay.

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And you'll see right here it is created the invoice for Craig. As QuickBooks has assigned the next invoice number, but the amount is zero. Why is the amount zero? Let's go take a look.

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I'm going to flip back over to QuickBooks to show you exactly how this works. Let's go in here. I'm going to hit my sales and customers tab so that I can go look at Cassidy and show you exactly what it did.

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So here let's go into Craig Cassidy's list and you'll see here's the zero invoice we just did. Here's the prepayment we just did. So let's go into the one we just created straight from Method.

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If I click on that, it should have six home visits, right? That's what we looked at. So if we look, we got home visit one, home visit two, three, four, five, six. We've got six home visits listed.

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Each one of them, $60 charge. And you'll see that when we did the invoice, it automatically put a line here with that customer's prepayment code, prepayments applied, and you'll see it took off six home visits, $60 each for 360. So the invoice is now a zero.

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So it did exactly what we expected. It created a zero invoice showing six prepayments and it invoiced them for the six visits. So that's great.

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But you might say, is there an easy way to tell what his balance is? Right here, all I see is that we've got a zero invoice and we see what was going in, what was going out. Yes, there is. So we have built in our app, going back to Method, going back to that prepayments list screen that we were just on a moment ago, right here.

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We now have the ability to show that Craig Cassidy has a balance of $1,140 and 19 remaining visits. He had 25, we just invoiced six of them. 19 is the balance.

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Can we see the details behind that? Sure. Just click on that line and here you'll see, here's the invoice that was just created, $1,286, which took 360 off, right, for six visits. So that now shows that his balance has gone from 25 to 19 and the amount balance has gone from $1,500 to $340.

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Very easy. The next time we invoice him, you'll see another entry show up and it'll show his balance continuing to be reduced. If you look at a particular client that's historical here, like Brian, we have a lot of entries.

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In fact, we can see that we're now overdrawn on that and that we need to generate another invoice for prepayments to add some back in. So easy to manage the history and the balances right here in this particular screen. That's it.

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That's how to generate invoices and create prepayments.