QuickBooks 2011 – New Balance Sheet by Class Report – Part 6

The Balance Sheet by Class Report was first introduced with QuickBooks 2011, however, it is also available in QuickBooks 2012, 2013, and 2014; has specific requirements for handling many or our normal day-to-day transactions; it gives users the option of selecting “Classes” (fund, location, profit center, or other category) as their column/class grouping.

Over the last several days, I’ve been discussing and sharing some information about how we all will need to change our data entry procedures in order to utilize the Balance Sheet by Class Report available in QuickBooks 2011.

In previous articles:

• QuickBooks 2011 – New Balance Sheet by Class Report – Part 1, we touched briefly on the fact that transactions will have to be entered in a very specific manner and there are many data entry transactions that are not supported by the Balance Sheet by Class Report
• QuickBooks 2011 – New Balance Sheet by Class Report – Part 2, we discussed how accounting professionals and end users would need to change their procedures when creating journal entries so that they were balanced
• QuickBooks 2011 – New Balance Sheet by Class Report – Part 3, we discussed how users and accounting professionals would no longer be able to assign multiple classes to a single paycheck.
• QuickBooks 2011 – New Balance Sheet by Class Report – Part 4, we discussed how you would need to classify Payroll Liability Payments in order for them to be appropriately recognized on the final report.
• QuickBooks 2011 – New Balance Sheet by Class Report – Part 5, we discussed how you need to classify Sales Tax Liability Payments using a Journal Entry AFTER you actually make the payment.

In this article, we’ll discuss how you must handle Customer Prepayment when you record them using the Receive Payments option.

As a business owner who frequently receives customer prepayments on upcoming work, if you receive the prepayment from the customer using the Receive Payments window and selecting the option to Leave the credit to be used later, the prepayment amount will appear in the report in the “Unclassified” column.

The prepayment displays in the Unclassified column on the Balance Sheet by Class because you cannot enter a class in the Receive Payments window, and QuickBooks doesn’t have a prior transaction in the work flow to reference class information, because there isn’t any prior transactions in the work flow – such as an invoice, which could be used to obtain the class.

Unlike many of the other special requirements we’ve discussed, there is some good news about Receiving Customer Prepayments, and that is — this problem corrects itself; when you create and apply an invoice to the payment at a later date; because the invoice will have a class assigned to it.

Because this problem is self-correcting in the long run, many business owners may decide to not bother to correct the prepayments.

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