This article contains the common processes and unexpected results that QuickBooks Desktop users might encounter while working with Accounts Receivable. Feel free to check Accounts Receivable 101 for the description and general workflow of A/R transactions. Also, you can visit Accounts Receivable 101.2 Part I if the A/R transaction that you are looking for is not here.
This article will cover the following transactions:
Solution: Assign classes to finance charges
Scenario: You want to assess the finance charge starting a specific date but you don’t want to include the finance charge for the previous months.
Solution: Assess finance charges
Scenario: You create a grace period in Finance Charge settings and then asses a finance charge for a customer with multiple invoices.
Possible reason When you set up the Finance Charge while there are previous assessments for the same customer on different invoices that fall within the grace period you set, then QuickBooks Desktop will not be able to calculate the correct fiance charges.
Because QuickBooks cannot calculate the finance charge in this situation, you will need to manually calculate the correct Finance Charge amount and enter it on the Finance Charge invoice.
Equation to calculate finance charges: number of days past due x balance due x rate/365
Solution: Incorrect A/R account was selected, duplicate names in job list or the option “Do not create statements with a balance less than 0.00” is checked.
Possible reason: Data Damage
Solution 1: Resort List.
Solution 2: Use standard data damage
Scenario: You have customers with open balances that are several months or even years past due. You want to “pardon” that previous finance charge and start assessing the finance charge on January 1st.
QuickBooks Desktop automatically starts assessing the finance charge for entire time it was past due depending on either due date or invoice date. To get around this, you have to create one finance charge that will calculate the previous outstanding time.
Scenario: Use an existing credit memo to partially pay an invoice.
Solution: How to pay an invoice using existing credit memo
Scenario: You need to issue a refund check for a customer with multiple customer jobs.
Scenario: You want to add price rules to your credit memo.
Options 1 and 2 eliminate the steps to manually edit the amounts. if you prefer to edit the amount manually, use this method.
Scenario: Unable to re-print a Credit Memo after the customer overpaid and you choose the option Leave the Credit to be used later.
Scenario: You need to apply a credit that was recorded from one job to another customer job
Solution: Transfer and apply a customer credit from one job to another job
Possible Reason: The Cash Basis Balance Sheet (CBBS) should not show A/R or A/P balances because these accounts track open (unpaid) invoices and bills. Many companies use A/R and A/P accounts and report on the cash basis. QuickBooks Desktop was not designed to be used in this way and reporting anomalies result.
Quick Tip: Find any advanced payment applied to an invoice, or a Journal entry used incorrectly.
Solution: AR balance showing on Cash Basis Balance Sheet
Possible Reason: You created an invoice after receiving advanced payment from the customer and you ran the AR Aging Report as of the advanced payment date.
Quick Tip: Check the date of the AR Aging Reports.
Solution: A/R Aging Reports shows negative or Zero amounts
Possible Reason: The A/R balance on the Balance Sheet shows the balance as of the report date. It is not like the Open invoices report that shows current open receivables.
Quick Tip: Be cautious with the Report dates.
Solution: A/R Total is different on the Balance Sheet report and Open Invoice Report
Possible Reason: Damaged transaction links or transactions do not have a customer name attached to them.
Solution: A/R balance on the Chart of Accounts does not match A/R reports
Possible Reason: The terms were added to the Edit Customer: Job window after you created the invoice, incorrect set up of Terms or Aging Report preference was set up to invoice date instead of due date.
Solution: A/R Aging reports show invoices in the incorrect aging periods
Possible reason:The file was converted from QuickBooks Online Edition or from an earlier version of QuickBooks Desktop.
Solution: Income tracker is blank or shows the wrong number of past due and open invoices
Solution: Open Balance does not match on the Sales by Rep Detail report and the A/R Aging report
Solution: For more information on this issue, click here.
Possible reason: You are trying to enter a transaction using the receivable or payables account but the name associated with the transaction is not a customer or a vendor. This problem commonly occurs on the following types of transactions:
Option 1: Click the drop down arrow in the name field. Verify the name type listed on the right side of the menu.
Option 2: Use the name list
Option 1: Click the drop-down arrow in the account field. Review the account type listed on the right of the menu.
Option 2: Select List, choose Chart of Accounts and find the account. Review the Type column for this account. If necessary, you can right click the account and choose Edit Account to change the account type.
Note: Even if you don't want to use a name, you still need to use one because it is required by QuickBooks desktop in certain transactions. However, you can use a clearing name like General
Important: You cannot change the type for accounts created by QuickBooks Desktop (for example, Accounts Receivable, Accounts Payable, Payroll Liabilities).
Possible reason: An invoice or sales receipt with reimbursable cost was deleted.
Description: Once a reimbursable cost is charged to a customer that item will show as billed in QuickBooks Desktop even after the invoice has been deleted. When deleting an invoice with a billable item charged on it, you will receive a warning "There are reimbursable expenses on this invoice/sales receipt. Deleting it will not change the billed state of those expenses. Do you want to delete it anyway?"
Scenario: The accountant is trying to transfer amounts between receivable and payable or trying to manage bad debt
Solution: Warning: You cannot use more than one A/R or A/P account in the same transaction