How to Add Interest Payments Using QuickBooks Sales Receipts
A reader wrote with the following interesting problem: "We have several government contracts and those customers often don't pay our invoices by the due date. When payments are late they automatically arrive with additional funds to cover interest. If we enter the amount of the payment check in the Receive Payments window, QuickBooks wants us to create a credit or send a refund. Neither of those choices works. How do we post this interest?"
Enter the amount of the invoice in the QuickBooks Receive Payments window, along with the check number. Be sure you're sending payments to Undeposited Funds, not directly to the bank account.
Then create a Sales Receipt using an Item named Interest Paid that is linked to your Interest Income account in QuickBooks. (Use the same check number as the payment type in the sales receipt.)
Now the invoice is paid, no credits are due, the interest is posted, and both transactions are in Undeposited Funds. Select both transactions in the QuickBooks Make Deposits window to match the amount of the deposit you're making.