Cheat Sheet: Four Common Transaction Types

Learn the four most common accounting transaction types used in QuickBooks and Novi - a quick guide for non-bookkeepers.

Jenn Norman, CAE avatar
Written by Jenn Norman, CAE
Updated over a week ago

Quick Guide

  • Invoice: You sold something to a customer & that customer now owes you money

  • Payment: Your customer just paid you the money they owe

  • Sales Receipt: You just sold something to a customer & they paid at the same time (We like to say that a Sales Receipt is what happens when an Invoice and a Payment have a baby.)

  • Credit Memo: You are crediting a customer's account because of an error

Dive Deeper


When an invoice is created, a company is "booking revenue" for selling a particular product or service, and the customer now owes the company that amount of money.

  • Invoices will always be tied to a customer/member record and have an item (product or service), an amount, and a balance due on the invoice.

  • There are two dates associated with an invoice - the date the invoice was issued and the date payment for the invoice is due.

    • Generally speaking, the invoice date (or date it was issued) should coincide with the date that revenue was "earned."

    • The due date on the invoice, while it can be manually set to any specific date, is normally determined by the payment terms. Payment terms are essentially rules set within QuickBooks that govern when a company expects its invoices to be paid.


Payment records are literally records of payments that are made by customers.

  • In most cases, payments are received from customers who are paying open balances on invoices.

  • Payments are separate transactions from invoices since the action of receiving a payment is happening at a different time from the action of issuing an invoice.

Payments themselves lack context. They show that money was received, but they do not show what that money paid for.

  • If a customer requests proof that an invoice was paid, a better practice would be to send the customer a copy of the paid invoice.

  • For more complicated scenarios, a better practice would be to create a statement in QuickBooks Online showing invoices, payments, and the outstanding balance.

  • Following this best practice, QuickBooks and therefore Novi AMS do not allow payments to be printed.

Partial Payments

An invoice doesn't have to be paid in full. Partial payments can be made as well.

  • After a partial payment is made, the invoice will be adjusted to reflect the remaining balance left on the invoice.

Sales Receipt

Sales receipts can be thought of as an invoice and a payment occurring simultaneously.

  • Just like an invoice, a sales receipt books revenue for a company based on the sale of certain products or services being sold at particular price points.

  • Sales receipts also have traits of a Payment since they show money being received from the customer to pay for those products or services.

  • Although sales receipts are often associated with credit card purchases, they can reflect cash and check purchases as well.

Credit Memo

From time to time, an organization will be forced to "write off" revenue. The reasons for write-offs can include accounts receivable becoming uncollectible, dues invoices that members decide not to pay, and canceled event registrations. In any of those cases, a credit memo would be used to write off an amount owed.

  • When credit memos are created, QuickBooks will attempt to automatically find the offsetting invoice that needs to be written off.

  • If QuickBooks is successful, the system will create a zero-dollar payment to link the unpaid invoice with the credit memo, effectively offsetting the balance of both and closing out both transactions.

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