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Delarosah
August 4, 2022
Question

Reconciling invoices with a credit on Bank Register

  • August 4, 2022
  • 1 reply
  • 0 views

I am just beginning to use QuickBooks Online so I am not as familiar with the software.  As a non-profit, we have members who historically pay more than their invoice resulting in a credit to their account.  When I reconcile the bank statement to the books at the end of the month, I balance because I deposited the payment received.  However, in the following month, when I apply the credit to that months invoice, it shows up on my bank register as a payment.  Since the full monetary payment was applied the prior month, the invoice with a credit remains in the bank register as unreconciled.   After several similar instances, I now show several uncleared deposits in my bank register.  How can I remove them without affecting my balance sheet or bank statement beginning balances?  If I delete them, my AR and cash account will be affected.

1 reply

A
AileneA
August 4, 2022

Hello, Delarosah. 

 

I'd like to share some insights about uncleared transactions from your Bank register.  

 

If these transactions weren't reconciled yet, these transactions will show in your reconciliation page. You can go to your bank register and manually clear the transactions from there. 

 

Here's how to manually clear bank transactions in QuickBooks:

 

  1. Go to the Gear icon, then choose Chart of Accounts.
  2. Locate the account of the transaction.
  3. Select View Register from the Action column.
  4. Identify the transaction to clear.
  5. Under the reconcile status column, select C for Cleared. You can also manually reconcile by selecting R or you can leave it as blank if they aren't cleared or reconciled.
  6. Select Save. 

 

Once completed,  you should no longer see that the deposit is uncleared in QuickBooks Online. 

 

Also, If these transactions are relevant, and you'd wanted to delete them. It will affect your AR because the invoice will open. 

 

You can read through this article for more details in troubleshooting reconciliations: 

 

 

If you have any clarifications or other questions, click the Reply button and post a comment. I’ll get back to answer them for you.

D
DelarosahAuthor
August 4, 2022

AilenaA,

Thank you for the quick response and detailing the process to clear the uncleared payments (credit payments applied to an open invoice).  The only issue that arises when I clear the payments/deposits via the process described, is that my Bank Register will reflect as if the payments had cleared the bank, thus reducing my cash balance, resulting in my QBO Bank Register not balancing to my Bank Statement.  To balance the Bank Register to the Bank Statement I would have to create an Adjustment which will cause other issues in other accounts.

 

The issue appears to be 1. the method I used to enter a payment in excess of the invoice amount, thus creating a credit on the vendors account, or 2. the method I used to apply a credit to a new invoice.

 

When a customer/vendor has a credit, how can I issue the credit against their invoice, so that the invoice payment does not show up in the bank register. Theoretically, I have already accounted for the the entire payment (even though only a partial amount was used to pay for an invoice) when it was made and deposited to the bank.  Any credits applied thereafter to open invoices should not be reflected in the bank register.

 

 

 

JessT
JessT
August 4, 2022

Hi Delarosah!

 

Thank you for updating us. I'd like to jump in and continue to help you with correcting your payments. I'll lay down the right process, so you'll be guided on how to correct your records.

 

Normally, when a customer pays more than its invoice amount, you'll want to put the actual amount in the Amount received field on the invoice payment transaction. Then, QuickBooks will save the extra amount as an available credit.

 

First invoice payment

 

The credit will be auto-applied as a payment on the next invoice of the customer if you enabled the auto-application of credits feature. If not, you can click Receive payment and choose the available credit as payment to the invoice, like in the screenshot below.

 

 

Based on your scenario, it sounds like the correct amount was received first, but a separate credit memo was created which was applied to the second invoice. This process would leave the overpayment as a credit and will also turn the credit memo as another cash-in transaction in the bank register when applied to the second invoice. 

 

To correct your record, you need to delete the second payment and the credit memo. Then, use the available credit created from the first payment as a payment to the second invoice. However, I would highly suggest contacting our QuickBooks Online Support first before deleting anything. They have the tool to see your setup and can guide you on which transaction to delete and edit.

 

Please don't hesitate to reach back out if you have other concerns. I'll be around to help.

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