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Level 2

Unapplied cash payment income

Hey, 

 

I've been trying to fix an unapplied cash payment income expense for 2 days and feel I'm missing something but can't figure out what it might be.

 

Here's the scoop: we have a customer who overpaid an invoice so I put in the entire payment (including the overpayment) in the payment amount. Now I want to apply the credit to an invoice that came a month later but whenever I apply it, the credit reverts back to the overpayment thus indicating our customer paid for an invoice that wasn't yet created at the time of the overpayment and creating the Unapplied Cash Income Expense account.

 

Does this make sense? Thanks.

Solved
Best answer April 28, 2020

Best Answers
Highlighted
Moderator

Unapplied cash payment income

Thanks for getting back to us and providing detailed information about your concern, Jonathan07.

 

QuickBooks Online (QBO) does have an automatic feature such as automatically applying payments to an invoice. If you receive payments that are creating an overpayment, then you can apply the credit to the future invoice.

 

To turn on this feature, here's how:

  1. Go to the Gear icon at the top.
  2. Select Account and Settings.
  3. Choose Advanced on the left of the screen.
  4. Hit the Pencil icon in Automation.
  5. Put a check-mark in the box next to Automatically apply credits
  6. Click Save and select Done.

To apply a credit to a new invoice, follow the below steps:

  1. Click the + New icon.
  2. Pick Invoice, then create.
  3. Select + New icon again.
  4. Choose Receive payment.
  5. Select the credit.
  6. Hit Save and New or Save and Close.

Once the credit is applied, the payment date will be the date where the actual payment is created. Right now, changing the date to the new invoice date is actually not an option. 

 

You can take a look at this article for more information: Handle a customer credit or overpayment in QuickBooks Online.

 

Post again in the Community if you have additional concerns. I'm here to keep helping. Have a good one!

View solution in original post

6 Comments
Highlighted
QuickBooks Team

Unapplied cash payment income

Hi there, Jonathan07.

 

I'll provide you information credit reverts back to the overpayment thus indicating our customer paid for an invoice that wasn't yet created at the time of the overpayment and creating the Unapplied Cash Income Expense account.

 

If you report on a cash basis, you'll see two accounts for unapplied cash payments. These accounts are default and automatically created by Quickbooks Online for cash-basis reporting. And, cannot be deleted or changed.

 

The purpose of this account is to report cash basis income from customer payments that are accepted but not used to any sales form. Usually, the date of the payment is before the invoice date it's applied to. If you don't want to show the Unapplied Cash Income Expense account, I suggest changing the date or you'll need to make sure that the date of the invoice and the payment applied are the same.

 

For additional information, you check this article: What's Unapplied Cash Payment?. This provides details about the Unapplied Cash Bill Payment Expense.

 

Please refer to these articles on how to receive and categorize invoice payments and how your customers can pay their invoices online.

 

 

Please know that you're always welcome to post if you have any other concerns. Wishing you and your business continued success.

Highlighted
Level 2

Unapplied cash payment income

Thank you ChristieAnn.

 

However, this solution isn't working but it was something I hadn't tried yet.

 

I don't know what to do. I have changed some of the dates on the invoices so that the payment comes in within it's inception date but I can't do that forever.

 

I just want to show the over-payment on the invoice it was paid for and then apply that extra (credit) to an invoice down the road WITH the date of the new invoice and not the old payment date.

 

For example, Invoice #1 was for $1000 but we received $1100. I want to show on the payment of Invoice #1 that we received $1100 and then when I make an invoice later, say Invoice #2, which is for another $1000, I can immediately apply that $100 to it on the day of it's inception ie the date of that application of $100 is the same date as Invoice #2. By doing this I will have gotten rid of the Unapplied Payment Income Expense account and have recorded what happened most accurately.

 

Is this clear?

Highlighted
QuickBooks Team

Unapplied cash payment income

Allow me to explain unapplied cash payment income to you, @ Jonathan07.

 

 

It's to report cash basis income from customer payments that are received but not applied to any sales form. QuickBooks will automatically create a credit for the customer you wish to add a cash payment for, so this could be used at a later time. 

 

Check out what's unapplied cash payment? for more details. 

 

The unapplied cash payment income will show based on the filtered dates of the Profit and Loss report. When you run the report at the same time as the invoice created, it will show the unapplied income. Once the amount is already applied to another invoice and you run the report for the same period it implemented, then it won’t show in the report.

 

Also, you can check this article about the difference between Cash and Accrual methods for QuickBooks Online: Choose between cash and accrual accounting methods in reports.

 

Please let me know if I can be of more assistance. You can always reach out if you have further questions. 

Highlighted
Level 2

Unapplied cash payment income

Thanks 

 

 

 

 

 

Highlighted
Moderator

Unapplied cash payment income

Thanks for getting back to us and providing detailed information about your concern, Jonathan07.

 

QuickBooks Online (QBO) does have an automatic feature such as automatically applying payments to an invoice. If you receive payments that are creating an overpayment, then you can apply the credit to the future invoice.

 

To turn on this feature, here's how:

  1. Go to the Gear icon at the top.
  2. Select Account and Settings.
  3. Choose Advanced on the left of the screen.
  4. Hit the Pencil icon in Automation.
  5. Put a check-mark in the box next to Automatically apply credits
  6. Click Save and select Done.

To apply a credit to a new invoice, follow the below steps:

  1. Click the + New icon.
  2. Pick Invoice, then create.
  3. Select + New icon again.
  4. Choose Receive payment.
  5. Select the credit.
  6. Hit Save and New or Save and Close.

Once the credit is applied, the payment date will be the date where the actual payment is created. Right now, changing the date to the new invoice date is actually not an option. 

 

You can take a look at this article for more information: Handle a customer credit or overpayment in QuickBooks Online.

 

Post again in the Community if you have additional concerns. I'm here to keep helping. Have a good one!

View solution in original post

Highlighted
Level 2

Unapplied cash payment income

Thank you so much.

 

I will mark this as the solution since in the end I can't do what I was hoping to do since QuickBooks doesn't work that way.

 

Thank you all who responded to this query.

 

Have a wonderful day.

 

P.S. I have another post coming y'all's way.

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