Banking error not resolved until next statement

M_Sylvia_CB · ‎January 14, 2019

My client has a customer whose checks print off-center which causes the bank to mis-read the correct amount. My client scans has checks to deposit electronically. Up to this point, the error has been easy to correct as the bank was depositing for less than the amount of the check. This time it deposited for more than the amount of the check, and in a different statement period. On 11/14/18, the bank read and deposited the check for $632 when it should have been $532.90. The November statement with the overage on the deposit has been reconciled. The debit of $99.10 was posted to the bank account on December 28. How can I make this adjustment? Do I have to undo my November reconciliation then make the correction to the check and the deposit? Or is there an adjusting entry I can do to resolve this? Right now the customer shows a credit of $99.10 due to the bank error.

Kristine Mae · ‎January 15, 2019

Hello there, M_Sylvia_CB.

You don't need to record any adjustment. You'll have to record the transaction since it's posted on the bank statement. This way, when you reconcile the account, you can easily match the transactions in QuickBooks to the statement.

You'll have to create a check, then link it to the customer's credit by receiving a payment. This way, your customer has a zero balance.

Here's how to create a check:

Click the Banking menu.
Choose Write Checks.
Choose the customer, then choose Accounts Receivable under the ACCOUNT column.
Add $99.10 in the AMOUNT field.
Click Save & Close.

Then, here's how you can link it to the credit:

Click the Customers menu, then choose Receive Payments.
Choose the customer, then you can see the check created. Choose it by putting a check mark in the box next to the date.
Click Discounts And Credits.
Under AVAILABLE CREDIT, choose the customer credit, then click Done.
Click Save & Close.

If you need more help, just leave a comment below. Have a nice day!

View solution in original post

Kristine Mae · ‎January 15, 2019

Hello there, M_Sylvia_CB.

You don't need to record any adjustment. You'll have to record the transaction since it's posted on the bank statement. This way, when you reconcile the account, you can easily match the transactions in QuickBooks to the statement.

You'll have to create a check, then link it to the customer's credit by receiving a payment. This way, your customer has a zero balance.

Here's how to create a check:

Click the Banking menu.
Choose Write Checks.
Choose the customer, then choose Accounts Receivable under the ACCOUNT column.
Add $99.10 in the AMOUNT field.
Click Save & Close.

Then, here's how you can link it to the credit:

Click the Customers menu, then choose Receive Payments.
Choose the customer, then you can see the check created. Choose it by putting a check mark in the box next to the date.
Click Discounts And Credits.
Under AVAILABLE CREDIT, choose the customer credit, then click Done.
Click Save & Close.

If you need more help, just leave a comment below. Have a nice day!

M_Sylvia_CB · ‎January 15, 2019

Thank you!

M_Sylvia_CB · ‎January 15, 2019

I just realized I tagged this as QuickBooks Desktop, I meant it to be QuickBooks Online. I use both so sorry for the confusion.

Would the solution be the same in QBO?

JessT · ‎January 15, 2019

Thanks for getting back to us, M_Sylvia_CB.

Yes, the solution would be the same in QuickBooks Online.

Feel free to join us back here if you need anything else.

qbteachmt · ‎January 16, 2019

@JessT

@Kristine Mae

Please learn from the input here. This is Not AR.

Banking errors have nothing to do with AR or AP; they are not related to Names and they are not income or expense.

They are done using Other Liability or Other Asset, like this:

If the bank misreads something and your records are too high compared to what they did, you use Write Check and "park" the amount in Other Current Asset = still yours, just no longer in bank as you thought. Then, when they send the corrected amount as a Deposit, you also make the deposit as repaying you for that Other Current Asset.

If the bank misreads something and your records are too low compared to the bank's records, you make a Deposit as Other Current Liability = not yours to keep. Once they Remove that from your account, you also enter the check expense as Other Current Liability = shows you gave back what wasn't yours in the first place.

Now you took control of the entries, you are ready to reconcile, and you have the right accounting.

qbteachmt · ‎January 16, 2019

@M_Sylvia_CB

Your Customer Paid, the Bank made the error. You process the amount the Customer paid, not the amount you got. The Customer is not part of the Banking error.

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Banking error not resolved until next statement