I've been using quickbooks online for nearly this whole financial year and I've been increasingly puzzled as to why quickbooks thinks that i'm making loss after loss. My bank account that is linked to quickbooks has circa £1500 in (which is correct) but the "In Quickbooks" states that i'm £-31,000 in debt!!!
I've scoured through the settings, chart of accounts and report pages to see what might be amiss but can't for the life of me work it out. The only thing that seems to put me more into debt is when I create an invoice for a customer and send it, it then appears as a payment/debt. This makes sense I guess as I am at that point in debt with my customer until paid in full. When I am paid by the customer, I record the payment against the invoice as you would expect but this simple cancels out the debt putting it to £0 and does not then show as a profit. So for every invoice I create, I get nothing and every business expense I make, I'm put into debt again.
Any help or insight would be greatly appreciated!
Let me help you fix the incorrect bank balance, Andrew.
It won't decrease the bank balance when creating an invoice, instead it will only increase the Accounts Receivable (A/R). Once you've recorded the payment, it will decrease your A/R. Then, it will increase your Undeposited Funds account if you haven't deposited it to the correct bank. It will be added and increase your bank balance once you make a deposit.
We need to make sure that we deposited the payments so that your bank account and QuickBooks will be in balance. You can follow these steps on how to do it:
Once done, let's check again your bank balance. Also, you can take a look on your Undeposited Funds account to check if there's a payment that needs to be deposited. Simply go to Accounting tab and select Chart of Accounts.
I also suggest checking this guide on how to properly categorize and match your downloaded bank transactions.
I'll always be here if you need more help with this. Have a great day and take care!