Handling Income in QuickBooks Online: From Estimates to Invoices to Getting Paid
- Melton Liggett
- Oct 15
- 3 min read
And why it matters for both your cash flow and your sanity
If your income process in QuickBooks Online feels a bit like guesswork — you’re not alone. Many business owners and nonprofit leaders don’t realize there’s a flow to how income should be recorded, tracked, and collected. And no, it doesn’t start with a deposit and end with a “paid” stamp.
This post walks you through that flow: from estimates to invoices, from payment links to deposits, and ultimately into your Accounts Receivable (A/R). Whether you’re invoicing clients or tracking donor pledges, this is about turning expectations into actual income — cleanly and correctly.
Handling Income in QuickBooks Online
Estimates vs. Invoices: What’s the Difference?
Let’s start with a common mix-up
Estimate
A non-posting transaction (doesn’t affect books until converted)
Used when you want to quote a service or proposal before doing the work
Can be converted into an invoice once accepted
Think of an estimate as just an offer — no one’s bought anything yet.
Invoice
A posting transaction (it does affect Accounts Receivable and revenue)
Used when the work is done (or scheduled), and you’re requesting payment
Tracks the amount owed by the customer or donor
Think of an invoice as a handshake — services were delivered, and now payment is due.
Converting an Estimate to an Invoice in QuickBooks Online
The beauty of QuickBooks Online is how it keeps this simple. Once your estimate is accepted:
Open the estimate
Click Create invoice
QuickBooks Online will convert it line-by-line (you can adjust before saving)
Send the invoice with one click
That invoice will now show up in Accounts Receivable, and the estimate’s status will update to “Accepted.”
Bonus: You won’t double-enter anything. QuickBooks Online keeps the history tidy.
What About Sales Receipts?
Sales receipts are used when you receive payment immediately — no waiting, no follow-up.
Use Sales Receipts for:
Retail purchases
Walk-in services
One-time donations at an event
Programs or fees paid upfront
Sales Receipt = customer hands you money and walks away happy. If you’ve already been paid, there’s no reason to send an invoice. Just record the Sales Receipt, and you’re done.
Sending Payment Links (And Why You Should)
QuickBooks Online lets you include a “Pay Now” button right in your emailed invoice. You can also copy the link and share it manually — great for:
Clients who “lose” their emails
Donors who want to give via card
Quick texting or messaging follow-ups
If you’ve connected QuickBooks Payments, your customer/donor can pay via:
Credit/debit card
ACH bank transfer
Once they pay:
QuickBooks Online records the payment
Applies it to the open invoice
Deposits it to Undeposited Funds or your chosen account
No more chasing checks, updating balances manually, or wondering if they paid yet.
Tracking Accounts Receivable (A/R) — Why It Matters
Once you send an invoice, QBO logs the amount as Accounts Receivable — money that’s owed to you, but not yet in your bank account.
If you're running reports before payments are recorded, your income might look better than it really is. You can check A/R with reports like:
Accounts Receivable Aging Summary – shows unpaid balances by how late they are
Customer Balance Summary – shows how much each customer/donor owes
Open Invoices Report – shows what hasn’t been paid
Regularly reviewing A/R helps you:
Spot clients who consistently pay late
Keep cash flow projections realistic
Follow up before problems grow
For Nonprofits and Churches
Estimates can represent pledges or grant commitments
Invoices can be used for sponsorships, rentals, or fee-based programs
Sales Receipts are perfect for one-time donations, event payments, or merchandise
And yes — you can still send payment links to donors. Make it easy for them to give, and easier for you to track.
Common Mistakes to Avoid
❌ Skipping invoices and just recording deposits — this breaks your A/R trail
❌ Forgetting to convert estimates — leaving money unbilled
❌ Creating invoices after being paid — use a sales receipt instead
❌ Not reconciling payments — leading to “phantom income” in your books
Bottom Line
Handling income in QuickBooks Online isn’t just about getting paid — it’s about creating a paper trail that’s clear, accurate, and actionable.
When you:
Use Estimates to scope your work
Send Invoices to bill for completed services
Collect payment via links or direct entry
Record Sales Receipts when paid immediately
Monitor Accounts Receivable
…you set your business or nonprofit up for better cash flow, cleaner reports, and far fewer surprises.
Want help reviewing your income process in QuickBooks Online? Let’s make sure your estimates, invoices, and payments are telling the right story. Contact me here to schedule a review.
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