Question

How to clear out offsetting journal entries and credits

Forum|Forum|6 years ago
April 12, 2020
3 replies
0 views

I have a customer (Boy Scout troop member) that has what are ultimately offsetting journal entries and credits. Is there a way to have them explicitly offset to reduce the Open Balances?

Thank

QuickBooks Desktop

MaryLandT

Hi there, gbonawitz,

Thank you for the screenshot. I'm here to help clear out offsetting journal entries and credits in QuickBooks Desktop.

You'll need to apply those entries to outstanding invoices. By doing so, the balance on the customer profile will be reduced.

I'm glad to show you how:

Open an invoice from the customer transaction list.
Click Receive Payments.
Click Apply Credits.
Journal entries and credit memos will appear in the Discount and Credits window.
Mark the credit you want to apply, then click Done.
On the Receive Payments window, click Save & Close.
Click Save & Close again to exit the Create Invoices window.
Once done, you can go back and check the Transactions tab to see the new open balance.

Another way of managing customers and accounts receivable is to set up a clearing account. This account is used to move money from one account to another account when you cannot move the money directly.

For more details, feel free to read through this handy article: Set up a clearing account. Upon sharing this, I still suggest consulting your accountant. He/She might have specific instructions on how to handle journal entries and credits. This is to ensure your records on the account is accurate.

Let me know if there's anything else I can help you today. Just mention my name and I'll get back to you.

Thank you and stay safe!

J

jnorman57

This worked for some of my customers, but I have several who have no data (invoices or credit balances) to offset. They still appear on my aging with zero balances. Please help to clear these zeros.

Reply to [email address removed]

J

jnorman57

I believe I figured it out on my own.

1. Open RECEIVE PAYMENT

2. Enter the name of the customer

3. Click FIND A CUSTOMER/INVOICE

4. Click SEARCH

5. Choose the customer and the credits will appear

6. Offset as mentioned prior - click "APPLY CREDITS" and offset.

Note: It isn't working for all, but most!

G

gbonawitzAuthor

Hi. Thank you for the response!

I'm familiar with clearing accounts - I used them all of the time to move money between the scouts' "jobs"(e.g. move credit from their Troop Activities balance to their Registration balance).

As you can see in the screenshot I have the offsetting amounts [for the same scout] in the same "job"(Troop Activities)...and the balance shown by QB does reflect that they offset. Is the only way to make the balances go away is to apply them to future invoices? There's no way to cancel each other out as-is given that the balance already takes the offsets into consideration?

IamjuViel

Thank you for clarifying your concern, @gbonawitz.

You can write a check to apply the credit as a refund. Let me guide you how to do it.

Go to Banking.
Select Write Checks.
Choose the Bank account where the check will be posted.
Enter the name of the customer in the Pay to the Order of.
Type in the total amount of the refund or credit.
In the section for Memo, enter the Credit Memo numbers.
Go to the Expenses tab.
Choose Accounts Receivable in the Account column.
Enter the amount of the refund and the name of the customer.
Click Save and Close.

Lastly, to avoid getting open credit memos and unapplied refund checks, let's link the credit memo to the check. Here's how:

Click the Customer menu.
Choose Receive Payments.
From the Received from the drop-down, select the Customer.
Go to Discounts And Credits.
In the Available Credits section, mark the check you created, then select Done.
Select Save & Close.

Once completed, you can run the Sales by Item Detail report. By doing so you'd see whether the credit memo is properly applied.

I'm always here to help if you have other questions about creating a credit memo in QuickBooks Desktop. Feel free to leave your comments below.

L

Lisa_at_STCS

This solved part of my problem, but I still have open items that are General Journal Entries and Payments. I inherited these items from my predecessor. Is there a way to clear G/Js against one another, or against payments? These are zero balance, inactive customer records, but they show if I run an open A/R report.

Rejeil_O

Thank you for joining the thread @Lisa_at_STCS,

It might be, you have an open invoice in your QuickBooks Desktop account that affects the open balance. You can check your open invoices and review the transaction if it is still collectible. If not, you can record it as a bad debt. Here's how to run an open invoice report:

Go to the Reports menu.
Select the Customers and Receivable tab.
Click the Open Invoices.

Also, you can customize the report if you're looking for a specific transaction statement.

Once done reviewing the open invoices, you can record it as bad debt and write them off. Visit this link for the steps: Write off bad debt in QuickBooks Desktop.

If you need further assistance, just drop a message in the comment section. I'll be happier to help. Have a nice day!

K

Kim B

This response did not answer her question. And I have the same problem.

I inherited an accounts receivable ledger "customer" that was set up through a series of journal entries. The balance is net zero but shows as a hundred lines in my open a/r report.

I have cleared all the debits against matching credits (this only worked if an exact match). When I try to clear the remaining debits and credits (again they net to zero), I get "must enter a transaction amount". I did not get this error message when clearing the exact matches (even though my transaction amount was also zero).

Screen shot of the error message:

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