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BlackRose36
February 21, 2024
Question

Customer Available Credits and old Invoices in Quickbooks Desktop

  • February 21, 2024
  • 2 replies
  • 0 views

Hello. First time QB (desktop) user. Trying to fix customer payments, invoices, deposits. Most deposits/payments from the customer come with reports to show which invoices they are paying off. During 2018-2021 there were multiple payments received (and deposits made) but no reports were received with them, so they were entered and no invoices checked off in the customer payment window.  Now the customer has "available credits" of 14k, and approx 50+ invoices that have not been checked off. So when I enter a new payment it keeps wanting to check off old stuff instead of just showing me the current invoices. I want to clean this up. When I run a statement for the customer, it tells me they owe a low amount which is almost correct, but not completely as the math doesn't seem to fit. Should I be using the available credit to get rid of this crazy list of invoices, or is there another way so everything is current? Do I need to do a write off somewhere to have this all be squared away?  How would that get rid of the list of old invoices? 

2 replies

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AccountantDave
February 21, 2024

This seems like maybe a mix of accounting questions and QB specific questions. Basically what you have are open invoices and open payments. They are on the account but not tied together in any way. Best practice would be to obtain remittance info from the payer listing what invoices they were paying, and apply accordingly. If that doesn't fit your business or client relationship, then you may decide to apply them as you see fit. I personally would want to get the clients remittance information because if they are a business, you would both have matching books, and thus you both know where their money went specifically. Doing a "write-off" is typically done when you are saying an invoiced amount can't be collected, and you are willing to write that amount off the books, and reduce stated revenue. Writing off the payments would similarly reduce state income. You probably don't want to do either of those. There are some other options for cleaning up their account with journal entries but that increases complexity.

A
AileneA
February 21, 2024

Hello, BlackRose36. I'll help you write off the available credits to ensure your account is accurate.

 

The clearing process can be complex and needs time and effort, as it involves reviewing data from previous years. Thus, seeking guidance from an accounting professional with expertise in this area is important. They can help you with the process and ensure you use the correct account to make sure the financial statements are accurate and up-to-date. By working with an accounting professional, you can streamline the clearing process and minimize the risk of financial misstatements.

 

We can use journal entries and apply them to the existing credits to offset the available amount. Here's how:

 

  1. Go to the Company tab, then pick Make General Journal Entries from the list.
  2. In the Make General Journal Entries window, change the date and fill in the entry number if necessary.
  3. Once complete, hit Save & Close.
     

Then, we can apply the General Journal Entry to the Existing Credit/Debit.

 

  1. From the Customers menu, choose Receive Payments.
  2. Enter the name of the customer in the Received From field.
  3. Select the invoice and choose Discounts & Credits.
  4. Under the Credits tab, tap the available credit and select Done.
  5. Select Save & Close.

 

On the other hand, we can also use the other option, Apply the credits to an open invoice. Refer to this article for more detailed steps: Give your customer a credit in QuickBooks Desktop for Windows. 

 

Additionally, I'm including a future article to help you manage customers' debts that you know you won't be paid: Write off bad debts in QuickBooks Desktop.

 

I'm all ears if you need more help managing your credits and invoices. Tag me in your reply, and I'll get back to you as soon as possible. Keep safe, and have a great day!

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BlackRose36Author
March 19, 2024

Okay, maybe I didn't phrase this all correctly. I am adding screen shots of the customer payment screen which shows all the invoices that have not been checked off - there are roughly 50 of them from 2018-2019 plus a few from 2021. You will see it shows a two different balances, plus a credit amount. You will then see a statement I ran (from 2010-2024) and it shows on the last page they have a negative balance of another amount. 

 

I did reach out to our business partner and they were able to give us missing information but they switched systems and do not have access to anything prior to 11/2019. I just need this to show that they owe us zero dollars. and get these invoices marked as paid so they are not in the que when I send and receive future bills and payments. 

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jeanbiverly_
March 19, 2024

Hello, @BlackRose36. Thanks for the additional details. I can assist you with writing off your customer's balances. 

 

You can clear the amount by creating a general journal entry and applying it to the existing credit or debit. We recommend consulting your accounting professional before proceeding.

 

Here's how:

 

1. Go to the Company menu and select Make General Journal Entries.

2. In the Make General Journal Entries window, change the date and fill in the entry number if necessary.

 

For a customer with an overpayment

  • Select the Account field and choose Accounts Receivable from the dropdown list.
  • Enter the amount under the Debit column, tab to the Name column and select a Customer Name from the dropdown list.
  • In the next line, select the offset account and enter the amount under the Credit column. The offset account is usually an Expense account.

 

For customers with an underpayment

  • Choose the Account field and select Accounts Receivable.
  • Enter the amount under the Credit column, tab to the Name column and select a Customer Name from the dropdown list.
  • In the next line, select the offset account and enter the amount under the Debit column.
     

3. Select Save & Close.

4. From the Customers menu, choose Receive Payments.

5. Input the name of the customer in the Received From field.

6. Select the invoice and choose Discounts & Credits.

7. Under the Credits tab, select the available credit and click Done.

8. Hit Save & Close.

 

For more detailed information, you can visit this article: Write off customer and vendor balances.

 

In QuickBooks Desktop (QBDT), you can create custom templates for your invoices. For more guidance, check out this article: Use and customize form templates.

 

Please let us know if you have additional concerns with writing off your customer's balances. We're always available to help you out.

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