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How do I clear out the negative amount on the A/R Aging report?

I have negative amounts that keep showing up on my A/R aging report from previous bookkeepers.

A customer over paid on an invoice and it was marked to leave for use at a later time. Then a credit memo was created for the over payment and a check was cut. Now it keeps showing up as a negative on the A/R aging report and on the customer account. I am not sure how to clear this up. This was from a previous year so I am not sure how to go about taking care of this without it changing the financials for 2015. Can someone tell me how to clean this up?

Thank you

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Best answer 12-10-2018

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Established Community Backer ***

"A customer over paid on an invoice and it was marked to...

"A customer over paid on an invoice and it was marked to leave for use at a later time. Then a credit memo was created for the over payment"

That is the error. The overpayment already created negative AR. They just Doubled the negative.

"This was from a previous year so I am not sure how to go about taking care of this without it changing the financials for 2015. Can someone tell me how to clean this up?"

You need an Invoice for this. Whatever was used on the credit memo, use that same Item for the Invoice and then apply the credit to this invoice. Date it current.


4 Comments
Established Community Backer ***

"A customer over paid on an invoice and it was marked to...

"A customer over paid on an invoice and it was marked to leave for use at a later time. Then a credit memo was created for the over payment"

That is the error. The overpayment already created negative AR. They just Doubled the negative.

"This was from a previous year so I am not sure how to go about taking care of this without it changing the financials for 2015. Can someone tell me how to clean this up?"

You need an Invoice for this. Whatever was used on the credit memo, use that same Item for the Invoice and then apply the credit to this invoice. Date it current.


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That worked. There is only one problem with that. It is g...

That worked. There is only one problem with that. It is going to overstate our actual income for this month / year by creating an invoice like that.

Is there anyway to do a journal entry to fix this without affecting the income?
Active Member

Thanks!   This worked perfectly

Thanks!   This worked perfectly
Established Community Backer ***

"Is there anyway to do a journal entry to fix this withou...

"Is there anyway to do a journal entry to fix this without affecting the income?"

Never use a JE for AR. You can do what you need on a Credit Memo or Invoice, and you use the ITEM there that meets your need.

"There is only one problem with that. It is going to overstate our actual income for this month / year by creating an invoice like that."

This person left Funds on hand = negative AR. That is income to you. Their Credit Memo already reduced Income that year, or by whatever account their Item is linked to. That is why I suggested using that Same Item on your invoice.

Run all of this past your CPA. You can control this by which Item you put on the invoices. Don't use JE for AR, AP, Sales Taxes, Inventory or QB Payroll.