Cleaning up old A/R from prior "accountant"

Glad to see you here, @batvalil.

I'm here to help walk you through clearing out your customer's old balance in the system. Let's get started!

To start with, let's create a general journal entry to write off your accounts receivables. Here's how:

1. Create the appropriate journal entry.
   1. Go to the Company menu.
   2. Choose Make General Journal Entries.
   3. In the Make General Journal Entries window, change the date and fill in the entry number if necessary.
      1. Go to the Account field.
      2. Select Accounts Receivable.
      3. Enter the amount under Debit column.
      4. Choose a Customer Name from the drop down list.
      5. In the next line, select the offset account.
      6. Type in the amount under Credit column.
2. Apply the General Journal Entry to the Existing Credit.
   1. Click the Customers.
   2. Choose Receive Payments.
   3. Enter the name of the customer in Received From field.
   4. Select the invoice and choose Discounts & Credits.
   5. Under Credits tab, select the available credit.
   6. Click Done.
   7. Select Save & Close.

That should do it!

If you need further help with the steps above, I'd recommend contacting our Customer Care Team. A specialist will be able to access your account in a secured environment and further assist you via remote access session.

Here's how to contact us:

1. Visit: https://help.quickbooks.intuit.com/en_US/contact.
2. Choose your QuickBooks Product.
3. Select your QuickBooks Version.
4. On the Contact Us page, click a topic.
5. Click on the Get Phone Number button to see the support number.

Feel free to drop a comment below if you have other questions about writing off your customer's balance. I'm always here to lend a hand.

You don't create More JE.

@IamjuViel

Please Learn from the input here. JE should be Avoided for anything where Names are involved.

@batvalil

They are not used for AR, AP, you cannot list Items, they are not going to show as sales or allow for sales taxes, not for QB payroll. Worse, you just bypassed Cash vs Accrual Basis reporting. Your income tax reporting in those prior years might be horribly wrong. Let's review.

"I have close to $100k in credit balances."

This is where Cash vs Accrual is the issue; Negative AR does not show as Income for the financial reporting, and if some of that is Sales tax liability, that isn't getting any details about the funds from a corresponding Invoice details, at all.

"In looking at what the prior "accountant" did I can determine the following -  A journal would be booked (instead of creating an invoice) debiting A/R and crediting the income account.  The customer name was noted in the memo line."

QB requires a Name in the Customer Field, if they posted to "AR"; otherwise, you would use your own Generic Other Current Asset.

"When the payment was received a customer account was created  and the check was received against the customer account; however, there were no invoices to post these checks against because the invoice was created with a journal entry."

You would be able to Apply them to each other if there was a Name in the Income JE for the AR line. If there is not a name, they didn't use "real AR" and that means, you can create an Other Charge Type item linked to that Other Current Asset account and put that on an Invoice for the customer now, dated historically for that JE. Apply the Available Credit to the Payment. Now you are Clearing that Other Current Asset Balance and applying the Negative AR from the checks.

I am trying to unravel what the old accountant did.  The A/R balance per the GL is correct only the AR aging is not.  There appears to be a great deal of journal entries booked over a two year period (2003-2005) to adjust A/R to the accurate balance.  I need to adjust the customer detail / A/R aging only.  It appears all the payments were received against customer accounts but an invoice was never created.  They recorded the sales with a journal entry.

"The A/R balance per the GL is correct only the AR aging is not."

JE don't Age. They don't have Terms or Due dates. They just sit there. If they are Applied, they don't show as Open. If they are not Applied, they show as Open. That is All they can do for you.

"There appears to be a great deal of journal entries booked over a two year period (2003-2005) to adjust A/R to the accurate balance."

It's always the Wrong Tool for this.

"I need to adjust the customer detail / A/R aging only.  It appears all the payments were received against customer accounts but an invoice was never created."

Yes, I covered everything I would do if this file was in front of me.

"They recorded the sales with a journal entry."

That isn't Sales. That is a Manual Entry as income.

Here's the First Thing: don't make More JE. Don't make it Worse.

Here's the Next Thing: You cannot adjust AR without using a name, even if that is a generic name.

Here's the Next Thing: You cannot apply anything against anything if the Names Don't match. A JE for a generic customer cannot be applied to a Sale for a Real Customer, if that is AR; or vice versa.

Here's the Final Thing: You would be able to Apply them to each other if there was a Name in the Income JE for the AR line. If there is not a name, they didn't use "real AR" and that means, you can create an Other Charge Type item linked to that Other Current Asset account and put that on an Invoice for the customer now, dated historically for that JE. Apply the Available Credit to the Payment. Now you are Clearing that Other Current Asset Balance and applying the Negative AR from the checks. I gave this info, based on what you told us.

I tried this method.  It did not work.  I deleted the journal entry and now I cannot delete the payment information.  Why does Quickbooks make up that A/R account?  I do not like a piece of software making automatic decisions for me.

I recognize you're dealing with a challenging situation, @jmkatis. I want to assure you that I acknowledge the difficulties you're facing, and I'm here to support you through it all.

To assist you effectively, may I know what steps you follow in this thread? Can you provide more information about the payment information you deleted? Also, what do you mean about the account receivable account is this the default one or the new one? Sharing additional details will help me address your concerns accurately and provide a tailored solution.

Please don't hesitate to provide more information below to help me gain a better understanding of the problem. I'll keep a close eye on your response, @jmkatis.