Question

Adjusting A/R with a journal entry

Forum|Forum|2 years ago
November 28, 2023
2 replies
0 views

I manage two entities and one received payment for an invoice issued by the other. I am hesitant to use a J/E to adjust A/R because I know that messes up reporting... but if I receive payment in one entity I can't make the deposit because there is no deposit in that entity. How is this typically handled? Is there a workaround to a J/E?

QuickBooks Enterprise Suite

S

SheandL

Welcome to the Community, @rosanna1234.

I can guide you on managing two entities where one has received Payment for an invoice issued by the other. Transferring the credit from one customer to another is necessary to reallocate funds within your accounting records. This process involves creating a journal entry to transfer the credit and applying it to the appropriate invoices.

Please note that you must have access to the Chart of Account to complete this process.

Open the invoices you're transferring the credit to.
Select Apply Credits. Credits from another customer job would show under available credits.
Select the existing credits, then click Done.
Select Yes to complete and confirm the transfer.

Since this is an irreversible action, I suggest consulting your accountant before making any changes.

First, we need to set up a clearing account and create a journal entry to move the credit from the customer to the wash or clearing account. In the next step, we need to link the payment or credit to the journal entry and after linking, we can create a journal entry to move the credit from the clearing account to another customer. Lastly, we can apply credit to the unpaid invoice to manage the entities.

You can also check out this article for more guidance on how to transfer customer credit:

Transfer customer credit from one job to another in QuickBooks Desktop.

For a comprehensive guide on creating customer refunds, please refer to this article: Give your customer a credit or refund in QuickBooks Desktop for Windows.

You can always return to this forum if you have other questions regarding accounts receivables in your QBDT. The Community forum is always here to assist you.

R

rosanna1234Author

Thank you, but I was trying to move the credit between companies, not customers. I think that is what these instructions relate to, right?

M

MelroseV

Hello, @rosanna1234.

Yes, the instructions that my colleague @SheandL provided are for the customers. For the reimbursement company, it's good to hear that we are aligned, and I recommend contacting your accountant for more guidance about reimbursing the company.

Here's a link on how to transfer credits from one job to another: Transfer customer credit from one job to another in QuickBooks Desktop.

If you have any further concerns about reimbursement, please don't hesitate to share them with the community. Keep safe!

Rainflurry

@rosanna1234

Does Co. B (the company that received the payment) intend to reimburse Co. A (the company that issued the invoice)? If not, why not? The proper way to handle it would be for Co. B to reimburse Co. A but I'm guessing that's not what you intend to do or you wouldn't be asking this question. What kind of businesses are these? Sole proprietorships, S-corps, or ??? What is the relationship between the companies?

R

rosanna1234Author

They do intend on reimbursing company A. The issue was more a mechanical one- I did not want to use journal entries to adjust A/R in both companies and mess up the Open Invoices report. I determined that I could use a credit memo to close out the invoices and use an item to code them to the appropriate intercompany balance sheet account, so I figured it out! Thanks!

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