Sale of product warranties

To record the sale of product warranties in QuickBooks, you can create a sales receipt or an invoice, depending on the accounting method you use. Here’s how to do it:

Option 1: Recording the Sale of Warranties Using an Invoice (Accrual Basis Accounting)

Step 1: Create an Invoice:

1. Go to the QuickBooks homepage.
2. Click on the “Create” button (usually represented by a plus “+” sign) at the top of the screen.
3. Under the “Customers” column, select “Invoice.”

Step 2: Enter Invoice Details:

• Choose the customer or client to whom you are selling the product warranties. If the customer isn’t in your system, you can add them as a new customer.
• Specify the date of the invoice.
• Under the “Product/Service” column, select the product warranty item you have set up in your products and services list. If it’s not listed, you can create a new product warranty item.
• Enter the quantity and rate for the product warranty item to calculate the total amount.
• Add a memo or description to provide details about the warranty, including coverage, duration, and terms.

Step 3: Review and Save the Invoice:

Review the invoice details to ensure accuracy and save the invoice.

Option 2: Recording the Sale of Warranties Using a Sales Receipt (Cash Basis Accounting)

If you use cash basis accounting, you can record the sale of warranties using a sales receipt. Here’s how:

Step 1: Create a Sales Receipt:

1. Go to the QuickBooks homepage.
2. Click on the “Create” button (usually represented by a plus “+” sign) at the top of the screen.
3. Under the “Customers” column, select “Sales Receipt.”

Step 2: Enter Sales Receipt Details:

• Choose the customer or client to whom you are selling the product warranties. If the customer isn’t in your system, you can add them as a new customer.
• Specify the date of the sales receipt.
• Under the “Product/Service” column, select the product warranty item you have set up in your products and services list. If it’s not listed, you can create a new product warranty item.
• Enter the quantity and rate for the product warranty item to calculate the total amount.
• Add a memo or description to provide details about the warranty, including coverage, duration, and terms.

Step 3: Review and Save the Sales Receipt:

Review the sales receipt details to ensure accuracy and save the sales receipt.

Step 4: Reconcile Your Accounts:

After recording the sale of product warranties, reconcile your accounts in QuickBooks with your actual financial statements to ensure accuracy.

By following these steps, you can accurately record the sale of product warranties in QuickBooks, helping you track your warranty-related income and maintain accurate financial records.

Small business owners often face the challenge of balancing multiple financial tasks. Let our bookkeeper for small business handle your accounts payable and accounts receivable so you can focus on growing your business.