Skip to main content
A
Apples521
May 29, 2025
Question

How to adjust incorrect payment received in prior year

  • May 29, 2025
  • 2 replies
  • 0 views

I have a $2,000 payment received in 2023 and a $2,500 payment received in 2022 against an invoice that apparently was incorrect.  Now, in January 2025 we received what should have been the remaining balance of $4,500 against this invoice.  

 

The original journals would be Debit checking, Credit A/R.  If I reverse that entry as of 1/1/2025 and apply the $4,500 received in Jan to that outstanding A/R, won't the checking credit throw off my bank rec?

 

If instead I credit sales, then my P&L by customer report is showing I have sales for that customer, which isn't right since we recognized that in 2022 and 2023.

 

Can someone help with the proper entry to record this $4,500 payment?

2 replies

S
SashaMC
May 29, 2025

Hello Apples521,

 

It's great to see you in the QuickBooks Community! For a situation like this, I highly recommend connecting with your accountant, as they will know the best practices for your company. However, if you don't have an accountant, no worries! You can use our ProAdvisor service to connect with experts in your area. Simply enter your zip code, browse through the options, and choose one that fits your needs. Please note that many of these professionals offer a free consultation! Use the link below to find out more.

 

If you need any further assistance, please let us know. My team and I are here to help! See you around.

 

 

Rainflurry
Rainflurry
May 29, 2025

@Apples521 

 

Are you saying the payments received in 2022/2023 were never actually received, or were they recorded incorrectly in QB?

A
Apples521Author
May 29, 2025

From my understanding the payments were never received in 2022/2023.  The retention check just received in Jan 2025 closes out the job as paid in full.

 

Rainflurry
Rainflurry
May 30, 2025

@Apples521 

 

Just to confirm: the $4,500 retention check was received in January but you have no open receivable to apply it to and already recognized the income, correct?

 

If I'm understanding that correctly, how was the bank account reconciled back in 22/23 if $4,500 was deposited in QB but was never on the bank statement?  Somehow $4,500 must have been removed from the bank account in 22/23 to get it to reconcile.  Whatever account was used on the adjustments to get the bank account to reconcile is over/understated by $4,500 and should be assigned to the $4,500 retention check received in January.  Make sense?       

Terms & ConditionsAccessibility statement