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wendi.kopacz
March 14, 2025
Question

Apply funds from Other Liability account as customer payment

  • March 14, 2025
  • 1 reply
  • 0 views

I am the bookkeeper for 2 sister centers.  Sometimes our clients pay the "wrong/opposite" center so we have to transfer the funds to the "correct"/other center.  Further, there are loans between the centers, as well as loans from the owners.  So I was directed to start an "Other Liability" account called "Loan From", with subaccounts to distinguish between the two.  Some of the funds are dedicated to a Customer but sitting in the Loan From.  I can & do invoice the customer as per normal but currently the dedicated funds are still in Loan From.  Is there a way to credit the customer directly from Loan From (preferred) account?  Or, if not, what is the best way to account for the payment into income, but also pull the amount FROM the Loan From account? How to do this w/o unduly crediting/debiting the wrong accounts?  Is this even possible or should i set up the Loan From account differently?  Thanks so much!!!!  WendiK

1 reply

Rainflurry
Rainflurry
March 14, 2025

@wendi.kopacz 

 

"Is there a way to credit the customer directly from Loan From (preferred) account?"

 

Sure.  Create a journal entry and debit the Loan From liability account and credit the A/R account for that customer.  Then, apply the "payment" created by the journal entry to the customer's invoice by going to New > Receive payment..  

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    wendi.kopaczAuthor
    March 20, 2025

    Thanks so much!   Forgive me as Im trying to clean up some records here.  Many of these have already been invoiced/ received payment.  Either way, Im now confused on what ends up happening with the invoice.  When I create the JE, I return to the invoice to apply the payment.  This is where Im confused as the end result is puzzling for me.  I want to be sure its correct.   I go to the open invoice>Receive Payment.  Once I enter the deposit information and amount, QBO automatically applies it to the invoice, but also to the Credit option - to JE.  This leaves payment unapplied and creates an additional credit.  So, I removed the Credit to JE option from the Receive>payment.  This successfully applies the payment, zeroes out the balance on both the invoice and "payment" but now the total appears in the negative.  Is this right?  I have attached a screenshot.  Thanks for your help!  Have a great day!

    Rainflurry
    Rainflurry
    March 20, 2025

    @wendi.kopacz 

     

    "Once I enter the deposit information and amount, QBO automatically applies it to the invoice, but also to the Credit option - to JE."

     

    Why are you entering deposit information?  There shouldn't be any 'Deposit To' or 'Amount received' because you're applying the credit from the journal entry to the invoice, you're not receiving a payment.  That's what's causing the additional credit.  Leave the 'Amount received' as $0.00 and check the box for the invoice and the credit and you should be all set.  If you enter an amount in the 'Amount received' box and select the journal entry, that tells QB that you applied the credit and ALSO received a payment, thereby duplicating the credit.    

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