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Payment received, deposited to bank account but not applied to invoice - how to correct afterwards?

Forum|Forum|8 years ago
January 18, 2018
4 replies
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Hello, we're working in QBO and have a situation where a customers check was received by a partner and remotely direct deposited into our bank account. However, that check was incorrectly added to QBO via an electronic download from our bank and was never applied to the customer's invoice. Months have gone by and we need to figure how to apply the now reconciled deposit against the customer's outstanding invoice? Do we simply create a credit memo and apply it or is it necessary to create some type of journal entry? Any advice would be appreciated. Thanks!

Best answer by MichelleT

Hi there, KSK,

You've come to the right place, I'd love to help apply the deposit to the invoice to remove the outstanding balance.

Let's first locate the deposit, here's how:

Click Accounting on the left panel.
Locate the bank account where the payment was direct deposited into, then click View register.
Locate the deposit and click it.
Click Edit.

After that, let's link the deposit to the invoice. I'll walk you through:

Select the customer from the Received From column.
Select Accounts Receivable from the Account column.
Click Save and close.
Click the plus (+) icon.
Select Receive Payment.
Select the customer.
Place a check next to the invoice and deposit.
Click Save and close.

Now, the invoice is marked as paid. I've added this article for your future reference: Linking a Deposit to an Invoice

Thanks for giving me the opportunity to help. I'm here anytime to need further assistance with QuickBooks Online.

M

MichelleTAnswer

Hi there, KSK,

You've come to the right place, I'd love to help apply the deposit to the invoice to remove the outstanding balance.

Let's first locate the deposit, here's how:

Click Accounting on the left panel.
Locate the bank account where the payment was direct deposited into, then click View register.
Locate the deposit and click it.
Click Edit.

After that, let's link the deposit to the invoice. I'll walk you through:

Select the customer from the Received From column.
Select Accounts Receivable from the Account column.
Click Save and close.
Click the plus (+) icon.
Select Receive Payment.
Select the customer.
Place a check next to the invoice and deposit.
Click Save and close.

Now, the invoice is marked as paid. I've added this article for your future reference: Linking a Deposit to an Invoice

Thanks for giving me the opportunity to help. I'm here anytime to need further assistance with QuickBooks Online.

T

TWH

Thanx for the answer. I have a follow-on question. We pay sales commission based on the cash receipts. In the above scenario let's assume an invoice is dated in January, the cash was ACTUALLY received in March, but not credited to the invoice until July. I am concerned that the system will (despite the books being long closed for March) record this as a cash sale in March. How do I get this 'fix' to show the cash sale in July; the month the issue was resolved?

M

MichelleT

Hi there, @TWH,

I’m glad to share how QuickBooks Online (QBO) reports the sales once you receive the invoice payments.

QBO reports the sales based on the accounting method of the company. If you’re set up for Accrual method, the sales are recorded at the time you enter the invoice regardless of whether it’s paid or not.

Cash method reports the sales at the time you receive payments. It doesn’t matter whether the payments have been deposited to the bank account or not.

In the scenario above, the cash sales will be reported in March if you select Cash method. You’ll see the sales posted in January when you select Accrual.

You can check Choose between cash and accrual accounting methods in reports for more information.

To show the cash sales in July, you’ll have to set the payment date to this specific month. Then, run the sales report in Cash accounting method.

I’ve added some examples in the screenshots below.

I also recommend consulting an accountant before making any changes to the invoices or payments. We need to ensure the books are still accurate since they were already closed last March.

Don’t hesitate to let me know if there’s anything else you need. You can mention my name (@MichelleT) if you have additional questions, and I’ll be sure to get back to you.

M

missymarykay55

How do you do this in Quickbooks desktop? A payment was received from a client and it shows on their account but it is not applied to any Invoice I need to get this payment off the books how do I do that?

MaryLurleenM

Hello there, missymarykay55,

The received payment should be applied on the invoice. If the period where the invoice is created not yet reconciled, delete the payment tagged to the invoice and apply the received one.

If it's already reconciled, you'll either have to delete the payment or apply the payment to future invoices.

Check these article for reference:

I recommend reaching out to your accountant for additional advice on how to go about this. If you have other questions, don't hesitate to post here in the Community.

W

WIP2013

I have about fifteen invoices that are incorrect. There is an entry as accounts receivable and an entry for deposit. Will this work for all of them. I need to get rid of the duplicate deposits.

Thanks so much.

W

WIP2013

Do I go into the Accounts Receivable Register? I already marked each invoice Received Payment in the Sales/Invoices section. Is that correct? Obviously, it isn't because the payment wasn't applied to the invoice.

S

StacyLabrada

So im new in my current role and know some about QBO and i am experiencing the same issue. My invoices that are open are from 2022. Will this effect the already completed reconciliations for this year? . i am trying to clean up a huge mess from someone that wasnt sure how to properly receive. Im nervous to adjust.

Adrian_A

Hi, Stacy.

Yes, it will affect your reconciled account. I'm here to discuss more about it.

Changing the reconciled account can cause discrepancies in your previous and next reconciliation balances. We can un-reconcile the account and link the 2022 invoices to their payments. You can only un-reconcile one transaction at a time. If you need to start over, I'd suggest contacting your accountant. They can undo the entire period at once using QuickBooks Online Accountant.

If you prefer to do it by yourself, follow these instructions to undo reconciled transactions one at a time:

Go to the Accounting menu. Then select Chart of Accounts.
Find the account and select View register.
To help you focus on this task, filter the register to only include the last 60 days of transactions.
Review the check column. If the transaction is reconciled, you'll see an "R."
Select the box and keep clicking it until it's blank. It removes the transaction from the reconciliation.

From there, you can reconcile the account again. Here's an article for the detailed steps: Reconcile account.

If you encounter issues reconciling accounts in the future, this article will help you fix it: Fix issues at the end of a reconciliation in QuickBooks Online.

Feel free to get back to this thread if there's anything that I can help in reconciling the transactions. I'll be around to help you some more.

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