How do I record it ?? Help!

calandile · ‎July 16, 2020

Hello!

This is probably one of the silly questions but...

How would you do it? Please bear in mind I'm an absolute begginer, I do not have an access to the bank, all I do is posting invoices and recording them on the ledger, then an accountant puts a payment into the account and I need to allocate it to the invoice I raised. Just a bit of backgroud :)

Let's say that there's a company that pays us in advance an automatic payment that they calculate based on rates on their system. We then send them reports of how much we actually delievered during that period and the company takes it into the account and processes adjustments relating to that period with their next automated payments for the next period and so on...

The thing is that for example, one month I invoiced them $1000 and they paid $1500. I allocated this payment to the transaction which left $500 of overpayment/unallocated cash. The next month the same thing happened and just this month, I posted my invoice on the acocunting system for $1000 and the payment we received for this period was $50 and remit advice rightly explained it that this and this was taken back due to previosu overpayment. I just wonder, how do you deal with this in terms of allocation on the ledger so it does not look like the current invoice is underpaid and the adjustments are being reflected on their nominal account?

AddieC · ‎July 16, 2020

Hi calandile,

I'm so happy to see that you've chosen QuickBooks Desktop to help run your business. The Desktop version of QuickBooks is stocked with robust tools to help you manage your business finances easily. Thanks for giving me an idea of the type of task you're trying to complete. I'd be happy to point you in the right direction for support with this.

In this case, it sounds as though you're handling a unique and somewhat complicated set of transactions. In terms of how to allocate the funds in your ledger, that's something I'd suggest first running by your accountant. Accountants are the best equipped to help you figure out the method of entry to ensure proper bookkeeping protocol is in place.

If you're not yet connected to an accountant, you can find one in your area here: Find a ProAdvisor. The great thing about ProAdvisor accountants is that they're trained and certified in QuickBooks, so they'll have all the expertise needed to help.

If you've consulted with an accountant and you're still in need of assistance entering this into your QuickBooks account, our tech support team would be happy to help you. In this case it would be beneficial for an agent to walk you through this one-on-one, as there may be a number of variables that impact how you should record this.

Cheers.

LeithG · ‎July 17, 2020

Hi Calandile

Here's how I would approach it.

When you issue your invoice to the vendor, that becomes an amount owing from the supplier, and then when they 'overpay' you that becomes a credit memo on their account.

Debit Cash:

Credit Accounts Receivable to the customer

Then when the next invoice comes in, the -500 is already sitting there waiting to match up against the new payment, the credit memo, and the new invoice.

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How do I record it ?? Help!

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How do I record it ?? Help!

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