I have just finished reconciling 2020, but now some of the deposits I have recorded are labeled as "Overdue" in the "Status" column for the customer, what does this mean?

Hi userap1,

Don't worry. I've got your back. It sounds like you need to apply the deposits to the invoices. With QuickBooks Online, this is an easy process I can lead you through it.

To apply the deposit, follow these simple steps:

1. Go to Invoicing/Sales from the left navigation menu.
2. Choose the All Sales tab.
3. In the drop-down, click Payment.
4. The receive payment form will open. Check the boxes of the invoices that are outstanding and the deposits that need to be applied.
5. Click Save.

I've included an article with the whole process laid out for you: How to link a deposit to an invoice.

If you need further assistance, reach out. I'm here to help. Take care.

Hello @userap1 ,

Whenever you post a deposit from a customer directly to a bank account, it debits the bank and credits accounts receivable.  This is correct.

However, in QBO, you have the option of "Receiving" the payment first to an "Undeposited Funds" account, and then making your bank deposit from there.  If you receive 10 payments in one day, you usually will only want to make one lump deposit at the bank for that day, and have a transaction in QBO that matches that deposit.  Using Receive Payment and posting each individual payment initially to Undeposited Funds allows you then to Make a deposit from the Undeposited Funds account and combine all those individual customer payments into one lump deposit.

For example, if you post deposits directly to your bank account, this is what happens when a customer has made a purchase and has an outstanding A/R for $100.00:

                                                                   DR                          CR

Sale                                                                                          100.00

Outstanding A/R                                      100.00

---------------------------------------------------------------------------------------------

Payment rec'd, deposited to Bank           100.00

A/R                                                                                           100.00

---------------------------------------------------------------------------------------------

If you use the "Receive Payments" feature, and use the Undeposited Funds account as a "holding tank" before depositing to the bank account of your choice:

                                                                    DR                            CR

Sale                                                                                           100.00

A/R                                                            100.00

---------------------------------------------------------------------------------------------------

Payment Rec'd - Undeposited Funds        100.00

A/R                                                                                             100.00

---------------------------------------------------------------------------------------------------

Remove from Undeposited Funds                                              100.00

Deposit to Bank Account                          100.00

----------------------------------------------------------------------------------------------------

Each account type has either a DR or CR as it's "normal" balance.  That's not to say that any of them couldn't end up with a balance on the other side, but would not be it's "normal" balance.

Assets                DR              (Bank Accounts, Asset Accounts)

Income               CR              (Sales)

Liabilities            CR              (Loans, Payroll Liabilities, etc.)

Expense             DR              Current Expenses

Equity                 CR              Shares & Owner's Equity

This is how the whole accounting equation balances out, thus the balance sheet where Assets = Liabilities + Equity.  Profit and Loss statement is obviously Income - Expenses = Net Profit.  The Net Profit from each year becomes a part of the Equity on the Balance Sheet and is how a business owner builds equity in his/her business.

Hope that helps somewhat.