Sales Workflows for Different Business Structures in QuickBooks Online

Introduction

Choosing the right sales workflow in QuickBooks Online is essential for maintaining accurate books, improving cash flow visibility, and generating reliable financial reports. Different businesses—cash-based, accrual-based, or complex service providers—require different sales transaction processes.

In this guide, we’ll break down sales transaction types in QuickBooks Online, explain posting vs non-posting transactions, and walk through simple and complex sales workflows based on business structure.

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Sales Transaction Types in QuickBooks Online

QuickBooks Online provides several sales transaction options, available under the Customers section when clicking the + New button. Understanding when and how to use each transaction ensures clean and accurate accounting.

Important Note:
Posting transactions affect the Chart of Accounts, while non-posting transactions do not—until they are converted into posting transactions.

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Common Sales Transactions Explained

Transaction Type	What This Transaction Is Used For	Posting / Non-Posting
Invoice	Records sales made on credit	Posting – posts to Accounts Receivable
Receive Payment	Applies customer payment to an open invoice	Posting – reduces A/R balance
Estimate	Quotes future sales to customers	Non-posting (can convert to invoice)
Credit Memo	Records returns or reduces customer balance	Posting – reduces Accounts Receivable
Sales Receipt	Records payment received at time of sale	Posting – records income and payment
Refund Receipt	Records money refunded to customers	Posting – records cash paid back
Delayed Credit	Records discounts or returns to apply later	Non-posting
Delayed Charge	Records billable revenue to invoice later	Non-posting

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Why Choosing the Right Sales Workflow Matters

Using the correct transaction at each stage of the sales process helps:

• Avoid duplicate income

• Keep Accounts Receivable accurate

• Improve bank reconciliation

• Maintain compliance with accounting standards

• Produce reliable financial reports

Accountants and ProAdvisors should coach clients on which transaction to use and when.

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Sales Workflows by Business Type in QuickBooks Online

1. Simple Cash-Basis Business Workflow

This workflow is ideal for businesses that receive payment immediately when services are provided or products are sold (e.g., retail stores, salons, small service providers).

Steps:

1. Make the sale and receive payment (cash, ACH, or check)

2. Create a Sales Receipt

3. Record payment to Undeposited Funds

4. Deposit the money into the bank

5. Create a Deposit transaction in QuickBooks Online

6. Match the deposit with the bank feed

✅ Best for businesses that don’t invoice customers
✅ Simplest workflow with minimal steps

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2. Simple Accrual-Basis Business Workflow

This workflow works best for service-based businesses that invoice customers and get paid later.

Steps:

1. Provide the service

2. Create an Invoice

3. Receive payment from the customer

4. Record payment to Undeposited Funds

5. Deposit funds into the bank

6. Create a Deposit transaction

7. Match the deposit to the bank feed

✅ Ideal for consultants, freelancers, and agencies
✅ Improves income tracking and Accounts Receivable accuracy

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3. Complex Accrual-Basis Business Workflow

This workflow is designed for businesses with longer sales cycles, such as construction companies, project-based services, or businesses that use estimates and progress invoicing.

Example Workflow:

1. Customer submits a sales inquiry

2. Create an Estimate for total charges

3. Customer accepts the estimate

4. Create Progress Invoice 1 (percentage of estimate)

5. Customer pays Invoice 1

6. Receive payment into Undeposited Funds

7. Deposit funds into the bank

8. Create a Deposit transaction

9. Match deposit to bank feed

10. Create Progress Invoice 2 for remaining balance

11. Close the estimate ($0 balance)

12. Customer pays Invoice 2

13. Receive payment into Undeposited Funds

14. Deposit funds into the bank

15. Create and match final Deposit transaction

✅ Best for construction, manufacturing, and project-based businesses
✅ Supports accurate revenue recognition and cash-flow tracking

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Best Practices for Sales Workflows in QuickBooks Online

• Always use Undeposited Funds when grouping payments

• Match deposits to bank feeds regularly

• Avoid mixing sales receipts and invoices incorrectly

• Use estimates and progress invoicing for long-term projects

• Review Accounts Receivable Aging reports monthly

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Final Thoughts

QuickBooks Online offers flexible sales workflows that support cash-basis, accrual-basis, and complex billing structures. Choosing the right workflow ensures clean books, accurate reporting, and fewer reconciliation issues.

Whether you’re a business owner or a QuickBooks ProAdvisor, understanding these workflows is key to maintaining financial clarity and long-term success.