How to setup and use Gift Certificates in QuickBooks

[@rebeccawiegman1652]

Candace, do you have a video for how to setup gift certificates that you are giving away as donations and how those get accounted for? How they are tracked as charitable donations for tax write offs

[@jennywu1169]

You are best!!

[@CandusKampfer]

Hi Jenny, Sounds like you enjoyed this tip. If you'd like to get them straight to your inbox in the future you can join our weekly Tips & Tricks: canduskampfer.com/weeklytips Have a great day! Ireland Team Candus P.S. We’d love to connect with you! Find us on ↓ Instagram: instagram.com/candus.kampfer Facebook: facebook.com/CandusKampfer TikTok: www.tiktok.com/@canduskampfer

[@matthewweston2681]

Hi Candace! A sales tax reporting issue shows up when you use the gift certificate on a taxable sale. The gift certificate show as a negative in the Sales Tax Revenue Summary report thereby reducing the total sales columns. I wonder what else it affects, wouldn't it throw off the P&L? It's seems easy enough to compensate if one remembers to add back in the give certificate amount to the total sales when reporting your sales tax. Another way I found is to customize the Sales Tax Revenue Summary report to filter by "All Ordinary Income Accounts." While this gives you the right totals they are now shown as negative numbers. Any thoughts or ideas of how to handle this better? Love your channel and thanks so much for are your help.... Matt

[@CandusKampfer]

Matt, Did you try to do the gift certificate as non- taxable?

[@matthewweston2681]

@@CandusKampfer Hi Candus, Yes, when I set up the Sales Tax Code for my "Gift Certificate" I abbreviated it "GFT" and selected Non-Taxable. The interesting thing is that Quickbooks did figure the sales tax correctly, including the amount of the gift certificate in its calculation. BTW, I followed your directions when creating the "Gift Certificate" sales item by designating it as an "other charge." Hmmmm

[@AdnanAhmad7]

Hey Candus! The question might be irrelevant here but i needed to ask it and couldn't find any video about it in your channel. I want to know what to do if I have opening balance for vendors which are actually advances we have given to them for purchases? And similarly opening balances of 'advances from customers' ? Can you please explain ?

[@AdnanAhmad7]

It was prior to setting up the company file! Same goes for some customers who have paid us in advance :)

[@AdnanAhmad7]

***** Do you have a video on how to do this all?

[@SteveChase1]

Could you please let me know what happens if they customer only uses a portion of the gift card. For example, they only purchase $20 of product, and want to use their $80 gift card. Seems like I am running into an issue where QB won't save an invoice with a negative amount.

[@SteveChase1]

Thank you Candus for this video and quick response. Yes it does makes sense. However, I want to be able to report how much the customer has available to spend on the next time they redeem their gift card with another purchase. If I have a lot of customers doing this I think it would be hard to look at the gift card liability account register and find a particular customers balance. Option A I think would be to create a new liability gift card account and then link to a new other charge product item for each new customer. This would satisfy my reporting but would take on a lot of extra accounts linked by using a last, first Customer naming system. Option B would be to issue credit memo and avoid the liability account all together. Option A would hit the balance sheet immediately and delay the income of the P&L until they made their first sales purchase with the gift card. Option B credit memos would affect the P&L immediately as a negative income and not use the balance sheet of the liability at all.

[@justdaveed1015]

Is there a way to provide the customer with a statement showing what their remaining balance is on their gift certificate? We offer prepaid services (gift certificates) and we need to be able to provide a statement showing their remaining balance whenever they make a purchase (our customers often purchase $500-1,000 in prepaid services and they make much smaller purchases).

[@stephaniemagilow1731]

Can you explain how to account for donated gift certificates (when schools or PTA groups ask for donations)...since it is not a "sale" of a gift certificate, how do we account for it on the front end? I understand the redeeming part, but not the issuing part. Thank you!!

[@CandusKampfer]

Stephanie, Thank you for reaching out to us! Due to the large volume of comments and emails, we receive daily, Candus isn’t able to respond to all of them any longer. We will add your question to our future tip requests. Please join the weekly tips and tricks to be notified when your question is answered. canduskampfer.com/tips Have an amazing day! Elaine Team Candus

[@CandusKampfer]

Are you saying you are donating products or services vs money?

[@stephaniemagilow1731]

@@CandusKampfer we own a food based business and sometimes we have local schools contact us for gift cards for auctions. If we donate gift cards to the schools that people buy at school auctions (we receive paperwork as proof of donation for IRS and we receive no income from it) and whoever wins the bid at the auction can use that gift card down the road to purchase food from us, how do we account for the gift card issued initially? I am currently making an invoice listing the school as the customer and the gift card is a current liability, giving the gift card a value, it now shows an amount due as revenue...in a QuickBooks tutorial it said to balance that with a credit memo to zero out the amount due, but then doesn't that also zero out the liability? How do we record the donation in Xero, but not have the amount show up as a customer needing to pay us to receive the gift card...we need the liability to stay as a liability until the recipient uses it down the road but not have an amount due. I'm just confused...

[@visitdowntownbend3161]

Hey Stephanie, we have the same issue. Did you figure out how to record this? Thanks in advance!

[@VeganLiving247]

This is still wayyy over my head lol. :( Maybe I really should fork out the $600 or whatever for the course. But I feel like I would still be lost. Maybe someday I will get it... :/ Sigh... I appreciate ppl like yourself trying to help though :)

[@VeganLiving247]

I think I will take the time to review over your videos over the next couple weeks and try to learn more. Maybe this is the wrong video to start with haha. :D I have some clients buying gift certificates through Square online, and some purchasing in person a printed gift certificate. So I'm going to need to learn how to process both.

[@CandusKampfer]

Thank you for watching the video! Due to the large volume of questions and emails we receive daily, Candus isn’t able to respond to all of them any longer. If you are just starting out with QuickBooks or feeling overwhelmed and need help, register to join her next workshop here: canduskampfer.com/getting-started/ Have an amazing day! Elaine Team Candus

[@CandusKampfer]

You will figure it over time be kind to yourself! Candus

[@Malaka653]

What happen to the tax?

[@Malaka653]

Candus Kampfer i mean how to get total tax liability at the time of redemption ?if we deduct as a discount tax is zero

[@Malaka653]

this cannot be done in quickbooks online version, does not allowed to invoice taxable and non taxable items in a single invoice.

[@alanebumatay6545]

I keep getting a error message that I cannot enter a negative amount after following all your steps. Please help????!!!!!!!!!!!

[@CandusKampfer]

Sounds like you didn’t add the item they purchased.

[@alanebumatay6545]

Yes I entered the persons items. What I was doing doing was entering a gift certificate amount larger than the purchase. QB will not let you have a negative balance.