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Mildi20
Level 1

Accounts Receivable Year End

My mother-in-law has a small manufacturing business and just recently she decided to switch from Peachtree desktop to QuickBooks Online. I am helping her to set up the QB and transfer all data starting January 2021. She is using accrual accounting and we have a few invoices that she issued in December 2020 but were paid in January 2021. Payments came directly into her business bank account and we already linked the bank account and imported all transactions starting January 1, 2021. I am new to QB and I am not an accountant. I presume we need to create a chart of accounts for AR and post a journal entry for each invoice and payment...? not sure... Also since the invoice was created last year do I still need to enter it in QB? Could you please explain step by step process and include some. Thank you!

3 REPLIES 3
KlentB
QuickBooks Team

Accounts Receivable Year End

Thank you for choosing QuickBooks Online, Mildi20.

 

I'm here to assist you in handling those transactions.

 

You'll need to record the invoices since they have been paid this year. In addition, you don't need to set up an AR (Accounts Receivable) account. QuickBooks Online automatically creates this account for you.

 

You can record those transactions as a journal entry in the program. Take note that this process can be tricky if you're not familiar with accounting. That said, I suggest consulting your accountant to ensure that the paid invoices will be recorded correctly.

 

Once done, it's time to match the journal entries to your imported/downloaded online banking transactions. I'll show you how:

 

  1. Select Banking or Transactions from the sidebar menu.
  2. Go to the Banking tab, then choose the appropriate bank account. 
  3. Find a downloaded transaction and then click it to expand the view.
  4. Select the Find Match option and review the matching records found in QuickBooks. 
  5. Locate the journal entries you've created.
  6. Tick the checkbox of the correct match, then click Save.

To learn more about this process, you can visit this article: Categorize and match online bank transactions.

 

Since you're new to QuickBooks Online, I encourage checking our Getting Started Guide to help set up your company and learn product basics.

 

We're open here 24/7, so please don't hesitate to visit us again if you need more help in managing your other transactions. Have a pleasant day ahead.

Mildi20
Level 1

Accounts Receivable Year End

Thank you for your response. We have contacted our accounting and trying to schedule a phone call but in the meanwhile could you please explain the process of a journal entry to the AR account to zero out December invoices. Also, I have been reading a lot about how to post a payment to the invoice and to add or match a bank transaction to an invoice. But I am still a little bit confused. Do I need to post a payment first or can I just go to a bank transaction (we have our bank linked and transactions are downloaded on weekly basis) and add it to the corresponding invoice? What is the correct process? I don't want to have duplicate entries. 

Rasa-LilaM
QuickBooks Team

Accounts Receivable Year End

Thanks for adding more information about your concern, Mildi20.


Let me provide some information to keep your transactions in tiptop shape.


As mentioned by my peer, record the invoices that were paid this year. After setting up the bank feeds, you can now bring the data into the company.


Once these entries are downloaded into the program, QBO reviews them.  As you check the data, you can match the bank feed transactions to the existing ones.


Here’s an article that provides more insights into the process. It includes a video for visual reference: Add and match downloaded bank transactions.


In regard to the journal entry, I still suggest consulting your accountant. They can recommend how to handle the situation, especially for your December invoices.


We also collated resources to get our customers acclimated to QBO features and processes. Tap here to access our self-help articles. They’re arranged by topic and you can view each one easily.


Keep in touch if you have other QuickBooks concerns. As always, I’m only a post away for help. Have a great rest of the day.

 

 

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