Payment received in error

Hello Jane

You mentioned in your post  you received a payment into Company 1's bank account that should have been paid to company 1, do you mean that should have been paid to company 2?

Was the receive payment on an invoice in company 1 or was it done as a bank deposit?

We can certainly go through the best way to record this we just need a little bit more information on this.

Thanks

Emma

Hi Emma,

Thanks for your help.

Yes exactly that…. it should have been paid to company 2.

Was the receive payment on an invoice in company 1 or was it done as a bank deposit

Not sure I understand the question? - The invoice was raised by company 2.

Does this help move us forward?

Thanks

Jane

Hi JLR03

You could record the money being received by company 1 in error as a bank deposit. In the add funds to this deposit section, add/create the name of the customer that the payment should have been received from in company 2 in the received from column, in the account column select/enter the debtor/accounts receivable account enter the amount, in the amounts are box select No VAT, ensure the date is the date it was received by company 1 and in the account section at the top of the screen you have selected the bank account the money was received to,save and close.

Then when you are sending the money back to company 1 create an expense. In the payee box select the customer you created above, the payment account is the bank account you paid the money from/back to company 2, enter the date that the amount was debited from your account in the payment date box, in the category column select/enter the debtors/accounts receivable account enter the amount, in the amounts are section enter No VAT, save and close.

Hi John

Thanks for your reply. 

I will attempt this and update the result once done.

@JLR03

Thank you! We look forward to your response.

Hello! I have the exact same situation with a payment meant for company 2 that was applied to company 1.  My issue is that an invoice was also created in company 1 and the payment applied to the invoice.  I wrote a check from company 1 to company 2 to transfer the money, but the original payment is still falsely recorded as income.  How can I fix this?

Thanks.

Hello, Cotton. I can provide a solution that could help resolve this issue.

To manage your transactions effectively in QuickBooks, start by setting up a clearing account. Once done, link this account to the deposit that was mistakenly received for Company 1. Next, use the same clearing account for the payment processed in Company 2. Finally, make sure to record the payment in Company 2 to complete the process.

I would also suggest consulting your accountant for personalized guidance. They can offer specific advice on accurately recording transactions based on your situation. Maintaining up-to-date financial records, and can assist in finding the best methods to achieve this.

Additionally, reconcile an account to ensure it matches your bank and credit card statements.

I’ll make it a point to check in with you if there’s anything more you’d like to discuss regarding banking tasks. Please feel free to click the Reply button to let me know. I’m here for you around the clock.