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vitanovabookkeeping
May 14, 2021
Question

Negative customer balance

  • May 14, 2021
  • 2 replies
  • 0 views

My client has a customer whose account had a negative balance of -$526.65. My client says the customer has not overpaid and it should have a balance of $140.00. I've gone back through the audit trail and can't even explain the mess there. The negative balance was created with several different invoices. Is there a journal entry I can use to clear out the negative and just have a normal balance of $140.00.

2 replies

A
AbegailS_
May 14, 2021

Hi there, vitanovabookkeeping.

 

I'm here to share some insights about balancing an account balance.

 

Your client needs to review the transactions that were created.

 

Journal entries are the last resort for entering transactions. They let you move money between accounts and force your books to balance in specific ways.

 

To create a journal, you can follow these steps:

  1. Select + New.
  2. Click Journal entry.
  3. On the first line, select an account from the Account field. 
  4. On the next line, select the other account you're moving money to or from. 
  5. Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
  6. Enter information in the memo section so you know why you made the journal entry.
  7. Choose Save and new or Save and close.

Consult an accountant first before making a Journal Entry for guidance.

 

To learn more about Journal entry click on this article: Create a journal entry in QuickBooks Online

 

For more details, you can check out this article: Reverse or delete a journal entry in QuickBooks Online

 

Let me know in the comments below if you have any other questions about your QBO account. I'll be around to help you out. 

V
vitanovabookkeepingAuthor
May 14, 2021

My client doesn't know what he did wrong and I can't figure it out

Is there any way to apply a credit without actually giving money back to the customer?

I just need a way to clear out the negative open balance and have the regular open balance.

E
Ethel_A12
May 14, 2021

Glad to hear from you here in the COmmunity, @vitanovabookkeeping.

 

Customers can pay you too much for several reasons. When this happens, you can use the credit toward an invoice, refund the customer, or enter the overpayment as a tip.

 

I'll provide you the steps on how to give credit so you don't have to send a cash refund.

 

Here are the steps on how to apply for a credit:

 

Apply the credit to an invoice you already created

  1. Click on + New.
  2. Go to Receive payment.
  3. Select the customer, then the credit and the invoice.
  4. Choose either Save and New or Save and Close.

Apply the credit to a new invoice

  1. Select + New.
  2. Select Invoice.
  3. Create the invoice.
  4. Select + New. Then select Receive payment.
  5. Select the credit and then Save and New or Save and Close.

Tip: Set up customer credits to apply to future payments by default.

  1. Go to Settings ⚙ and select Account and Settings.
  2. Select Advanced.
  3. In the Automation section, select Edit, and select Automatically apply for credits.

 

You can also check on how to create and apply credit memos or delayed credits in QuickBooks Online.

 

Get back to me if you have any additional questions about giving credits. I'm just a post away.

J
jamespaul
May 16, 2021

Hello, vitanovabookkeeping. 

 

Let's go back to square one so we can trace where the issue is coming from. A negative balance is caused by excessive credit memos and other transactions that affect the Accounts Receivable account (deposits and journal entries). 

 

Before we create any other transactions, I'm more than happy to work with you and dig a little bit deeper to find out the cause of the negative balance. 

 

You'll want to check the customer's profile and review the transactions under the Transactions List page. Look for Unapplied Payment or open Credit memos. 

 

If there are such transactions, there might be an invoice that was deleted. In this case, recreate it with the correct details then apply the credit memo as a "payment" to it. The Audit log can help you trace the deleted invoice. 

 

To effectively make use of the Audit log: 

 

  1. Go to the Gear icon, then select Audit log. 
  2. Click the Filter button.
  3. Check Transactions.
  4. Under the Show drop-down menu, select Deleted/Voided Transactions.
  5. Click Apply, then look for the deleted invoice. 
  6. Click the View link to see original invoice details (before being deleted). 

 

 

Also, if there are transactions that were recorded incorrectly, you can adjust the amounts or delete them (if necessary). 

 

If there are any other things you need to take care of in your client's books, feel free to visit our articles from the articles list page. 

 

Do you have more questions about managing your customer transactions? Lay down the details below and I'll work with you again. I'm also open to any other concerns you might have. 

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