We are using Quickbooks 2001 to manage a small business. The only real issue we have is the difficulty in changing an improperly applied payment. We have many customers with similar names and several clients using a central accounting office for several business. Currently we have to go through a long proceedure deleting and re-entering deposits to fix problems. Does Quickbook 2005 handle these changes any better?
thanks
The problem is not a QB problem it is an internal office problem. You should set up the proper controls when first entering receipts so you do not have to do it all over again.
The answer to your question however is no. There were no new features added to QB that address the issues you present.
How do you think QB should handle the situation? Your office personnel misapply payments. The deposit is created with the misapplied payments. The software requires you correct the mistakes.
I think Quickbooks should let you change how the payments were applied without deleting the deposit and changing the cleared balance. Is there a better way to handle this with credits or a journal entry and apply the credit correctly?
thanks Frank
You can always move the funds into the correct account using a Journal entry, but the original incorrect transaction will remain on the books. When you run financial reports the funs will be in the right places.
-- Vic Roberts Replace xxx with vdr in e-mail address.
I may not have expressed myself clearly. If I do a journal entry can I credit a particular invoice so when I run a statement for this account the affected invoice will clear as paid? Will the one we originally applied the deposit to show as unpaid when we run a statement for this account?
Frank
I think you were clear but I was not reading carefully enough. As far as I know you cannot use a journal entry to correct a mischarged invoice.
-- Vic Roberts Replace xxx with vdr in e-mail address.
No you can't. It also is not the best idea to start doing journal entries that impact A/R or you will cause A/R to become out of balance. You need to correct the way the payment was applied as well as to step up efforts to have them applied correctly the first time.
After entering a Journal Entry to A/R you can go to Receive Payment to apply the entry to an invoice or credit.
I've never seen QuickBooks A/R out of balance as a result of a journal entry.
Nevertheless, I agree that it's not good practice in general; journal entries should be used for things like depreciation, accruals, etc., not as an alternative method for transactions that are specifically provided for by more specialized journals such as "Receive Payment".
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You've asked questions in two different posts in this thread. I've combined the responses here, in-line.
No. It takes a minimum of two actions to credit a particular invoice using a journal entry. You can create a journal entry that debits Accounts Recieveable. By putting the customer:job name onto the journal entry, the customer:job will have a credit balance. In order to apply the credit to the appropriate invoice, you are required to go back to the Recieve Payments window. Note that in order to balance your A/R you will need an additional transaction(see below).
No. You applied a payment to the invoice - it is now paid.
If you debited your A/R for additional funds (using journal entry or credit memo) to credit the invoice belonging to the customer who paid, you must now balance that entry with a second transaction (journal entry or invoice), to increase the A/R to reflect the incorrectly applied credit to the customer who did not pay. To have the records accurately reflect "the one we originally applied the deposit to show as unpaid", you must find the payment improperly recorded, and edit it so that it applies to this second transaction and not to the original invoice. Any statement for the customer accounts will show two invoice entries and, when paid, two credit entries.
To answer your post from above:
No. There is no better way. Each misapplied payment affects TWO customers - the one who should have had the payment applied and the one who received an improper credit. So, EACH mistake requires TWO corrections - a debit to A/R (credit memo) for the person who paid, and an increase in A/R (invoice) for the misapplied credit.
Whether you use journal entries, credit memos and invoicing, debits/credits entered directly into customer registers OR any combination of methods - you still need to correct the misapplied payments by using the Receive Payments window to credit the correct invoice(s).
Statements run after these corrections will show the journal entries for the credit and debit corrections. IE Customer 1 Inv #124 $252.00, Balance $252.00 JE credit misapplied payment, $252.00 Balance $0.00
Customer 2 Inv #123 $500.00, Balance $500.00 Payment #999 $252.00, Balance $258.00 JE debit misapplied payment, $252.00 Balance $500.00 Payment #123 $500.00, Balance $0.00
The problem is not in the software. There is a saying in the programming industry - Garbage in, garbage out. No software program is immune to user error.
The fact is *SOMEONE* has the ability to find/correct the misapplied payments. The folks who are entering the payments incorrectly need to be properly trained by that someone. Alternately, you can minimize errors by having only that one person responsible for payment entry. Having 'several clients' in 'several businesses' entering data into your QB file is a recipe for disaster.
Our accountant did a zillian JEs to A/R to adjust the monthly maint fee (we're a condo association). He did not direct the entry to a specifc customer. As a result the Aging report did not match the Balance sheet. We finally did one last JE to fix the balances and told the accountant to stop doing journal entries to A/R and to fix the original entry instead.
QB 2005 has improved the payment posting procedure. When you enter the first 3 letters of a customer name a window will pop up which displays all possible choices for that name. This helps to choice the correct one. If you still find you have misapplied a payment after you have posted the deposited try this: record the payment to the correct name in "receive payments". then go to the original deposit record with the payment posted to the incorrect customer. Pull in to that deposit the payment that you just recorded to the correct customer then delete the line with the payment to the incorrect customer. Then save this deposit. This way the deposit has not changed and your banking is not effected.
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