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Anonymous
Not applicable

Transferring credit from one customer to another

Hi,

 

I am new to QBO (and accounting!).  I want to transfer credits on one customer account to another customer.  The examples all show journalling the accounts receivable, but I don't have a A/R account (Is this as I am using cash accounting basis?).  How should I do this?  Basically we have a lot of customer payments recorded against what are child customers and a lot of invoices recorded against the parent customer and I want to transfer the credit showing on the child accounts to the parent account.

 

Thanks

 

Chris

 

 

Solved
Best answer 09-20-2018

Accepted Solutions
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QuickBooks Team

Transferring credit from one customer to another

Hello ucsdcpc,

 

Welcome to the Community.

 

You are right you would use a Journal for this transaction. What you would do is debit the debtors account against the sub customer then credit the account against the customer you want to move the balance too. I would advise checking this with your accountant ti ensure this would be correct as we are not chartered accountants ourselves.

 

Please let me know if there is anything else we can help with.

View solution in original post

11 REPLIES 11
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QuickBooks Team

Transferring credit from one customer to another

Hello ucsdcpc,

 

Welcome to the Community.

 

You are right you would use a Journal for this transaction. What you would do is debit the debtors account against the sub customer then credit the account against the customer you want to move the balance too. I would advise checking this with your accountant ti ensure this would be correct as we are not chartered accountants ourselves.

 

Please let me know if there is anything else we can help with.

View solution in original post

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Level 3

Transferring credit from one customer to another

I tried creating a journal entry, and when I click on the customer the debit shows up for the debtor and the credit for the customer I want to move the balance to. The problem is that for some reason it is not calculated into the balance for each customer. The debtor (who has a credit) still has a negative balance (meaning a credit), and the other customer has an open balance with no payment applied.

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QuickBooks Team

Transferring credit from one customer to another

I’m happy to see you in the Online Community, hanky.


Allow me to join the conversation. I’m here to provide some clarification about transferring customer credit and its result on the journal entry.


If you create a journal entry and post the debtor under Credit, the result is a negative value which means there’s a payment that should be applied to an invoice. To get a positive amount the debtor should be entered in the Debit section.


This indicates there’s an open balance that you’ll have to enter a payment to the transaction. Check out this article for detailed information: Transfer a credit from one customer to another.


This information should get you pointed in the right direction.


Stay in touch if you have additional questions about QBO. Please know I’ll be right here to help. Wishing you well.

 

 

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Level 2

Transferring credit from one customer to another

I'm using QB desktop Pro 2017 and when I try to do a journal entry for this using A/R for the account it gives me a warning that I cannot use 2 A/Rs in the same transaction.  Is there a way around this?

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QuickBooks Team

Transferring credit from one customer to another

Hi ProvElect1,

 

I can see that you followed the steps in the article that Rasa-LilaM shared. I already sent feedback for it since we can't use another A/R on one journal entry, as stated in Step 8.

 

You can create two journal entries for this scenario. On the first one, you'll move the A/R balance (tag customer A) to a Wash/Clearing/Barter account. Then, on the second journal entry, move the funds from the Wash account to A/R (tag customer B). After that, you can follow the steps about applying credits in the article.

 

Thank you for pointing this out. You can also click No on the article and type something, like you can't use two A/Rs on one journal entry, to help alert our knowledge team about it.

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Level 2

Transferring credit from one customer to another

This worked for transferring the credit to the other customer.  Now the issue is customer "A" is still showing the journal entry under transactions still due.   In the APPLY CREDIT steps it says to select the journal entry created, but it will not let me do this without putting in an amount received for payment.  

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Level 2

Transferring credit from one customer to another

I realized I wasn't doing this step by step...It all came together once I did.  Thank you for the assistance!

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Level 2

Transferring credit from one customer to another

I cannot complete this with QB 2017 Desktop.  Any ideas why?

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QuickBooks Team

Transferring credit from one customer to another

Hi @mikeshick,

 

For QuickBooks Accountant, Desktop 2018 and earlier versions, you'll have to manually transfer and apply the credit from one customer to another. 

 

Here's how:

  1. Set up a clearing account.
  2. Create a journal entry to transfer the credit from the customer in question to the clearing account.
    • Go to the Company menu, select Make General Journal Entries.
    • Debit the Accounts Receivable with the amount to be transferred on the first line. In the Name column, select the Customer:job you are transferring the credit from.
    • On the second line, credit the Clearing Account.User-added image
    • Select Save & Close.
  3. Link the credit to the journal entry created.
    • From the Customers menu, select Customer Center.
    • Choose the customer you are transferring the credit from, then go to the Transactions tab.
    • From the transactions list, double click the credit memo.
    • Select Use credit to apply to invoice.
    • Put a check mark on the journal entry then select Done.
    • Choose Save & Close.
  4. Create a journal entry to move the credit from the clearing account to another customer. 
    • From the Company menu, select Make General Journal Entries.
    • On the first line, credit the Accounts Receivable with the amount to be transferred. In the Name column, select the Customer:job you are transferring the credit to.
    • On the second line, debit the Clearing account.User-added image
    • Select Save & Close.
  5. Apply the credit to the unpaid invoice.
    • From the Customers menu, select Receive Payments.
    • Choose the Customer:job you are transferring the credit to.
    • Put a check mark on the appropriate invoice, then select Discounts & Credits.
    • Go to the Credits tab and select the credit(s) you wish to apply, then select Done.User-added image
    • Choose Save & Close.

On the other hand, if you wish to do the same for vendors, check out this article: Transfer and apply credit from one vendor to another in QuickBooks Desktop.

 

If you have additional concerns, post them below and I'll be sure to get back to you.

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Level 2

Transferring credit from one customer to another

Thank you.  I'll give this a go.

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QuickBooks Team
QuickBooks Team

Transferring credit from one customer to another

We appreciate you for accepting the steps provided by my colleague as a solution to your concern, mikeshick.

 

 

You can also transfer customer credit from one job to another in QuickBooks Desktop 2019 and later versions.

 

Here's how:

 

  1. Open the invoice you're transferring the credit to.
  2. Click Apply Credits. Credits from another customer job would show under available credits.
  3. Select the existing credits then Done.
  4. On the Confirm transfer window, hit Yes to complete the transfer.

credit01.PNG

 

This is an irreversible action. Cases like this, it would be best to contact your accountant if you need to modify/reverse this action.

 

Once done, QuickBooks will create two General Journal entries to transfer the credits to the required Job. Then, the memo for these entries will state as Transfer of Credits for … to make it easier to understand.

 

Also, the software creates an Other Current Assets clearing account to move the credits( for the first time the transfer credits). It will show as inactive so that it’s only used to transfer credits.

 

Keep me in the loop if you need anything else with transferring customer credits. I'd be glad to help. You have a good one.