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NotableLive
October 2, 2024
Question

Recording a transfer to outstanding invoice

  • October 2, 2024
  • 1 reply
  • 0 views

I need to clear an invoice with a payment which was a transfer from one of our bank accounts to our operational checking account (the account for banking). The transfer was reconciled and added to our operational checking account (fine, no probs), but the invoice still shows as an active A/R invoice and falsely increases our balance by the transferred amount. How do I clear the invoice?

1 reply

Rainflurry
Rainflurry
October 2, 2024

@NotableLive 

 

Can you explain more?  A bank transfer cannot be used to clear an invoice because A/R is not involved.  To clear an invoice, you need to credit A/R and debit another account (generally a bank account).  That is done with the Receive payment function.  A bank transfer simply credits bank account 1 and debits bank account 2 and never hits A/R.  If you're trying to clear an invoice, you should have a payment received from a customer, not just an internal company transfer.  Presumably, there's more to the situation...      

N
NotableLiveAuthor
October 2, 2024

Several one-off client transactions were paid to our PayPal account. My boss had me invoice PayPal as a customer in August, enabling the A/R to show as invoiced income. In September, a transferred was made to our operational bank account from the PayPal account (which is listed as a bank account in QuickBooks on-line). The activity was correctly reconciled as a transfer, but the invoice still shows outstanding.

Rainflurry
Rainflurry
October 2, 2024

@NotableLive 

 

When the payment on the invoice was received into your PayPal (PP) account, did you not use Receive payment (New > Receive payment) and select your PP account under the 'Deposit To' drop-down menu?  That deposits the payment into your PP account and closes the invoice.  Then, just transfer the funds from PP to your operational bank account using New > Transfer.  The invoice should have been cleared when payment was received into your PP account, not when transferring from PP to your operational account.   

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