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Level 1

How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

I have two Accounts Receivable, one is Design income and another for Editing Income. When I run a report I noticed that some invoices from Editing are on Design income. How can I change the Account on Invoices in QuickBooks Online?

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Best answer 10-15-2018

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Level 3

Hi abadbookkeeping,  I'm glad you asked about changing th...

Hi abadbookkeeping

I'm glad you asked about changing the default Accounts Receivable (A/R) account for invoices. Let me clear this up for you. 

QuickBooks Online allows you to create multiple A/R accounts, however, it's not designed to work with them. In addition, the initial A/R account created will be its default in tracking A/R balances. For this reason, we can't change the default A/R account assigned by QuickBooks.

Alternatively, you can track two types of income with the use of sub-accounts, or Location or Class Tracking. If you're interested, you can learn more about it here: Can I Change the Default A/R or A/P Account in QuickBooks Online?

We'd like to understand more about what's important to you when it comes to having multiple A/R accounts in tracking different types of income. To send your feedback or suggestions, click on the Gear icon at the top right corner, and choose Feedback. Any and all feedback is welcome. The more we get, the more rounded product QuickBooks Online will become. 

 If you ever have other questions we can help you with, feel free to swing by the Community!

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39 Comments
Highlighted
Level 3

Hi abadbookkeeping,  I'm glad you asked about changing th...

Hi abadbookkeeping

I'm glad you asked about changing the default Accounts Receivable (A/R) account for invoices. Let me clear this up for you. 

QuickBooks Online allows you to create multiple A/R accounts, however, it's not designed to work with them. In addition, the initial A/R account created will be its default in tracking A/R balances. For this reason, we can't change the default A/R account assigned by QuickBooks.

Alternatively, you can track two types of income with the use of sub-accounts, or Location or Class Tracking. If you're interested, you can learn more about it here: Can I Change the Default A/R or A/P Account in QuickBooks Online?

We'd like to understand more about what's important to you when it comes to having multiple A/R accounts in tracking different types of income. To send your feedback or suggestions, click on the Gear icon at the top right corner, and choose Feedback. Any and all feedback is welcome. The more we get, the more rounded product QuickBooks Online will become. 

 If you ever have other questions we can help you with, feel free to swing by the Community!

View solution in original post

Level 3

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

This is one of my biggest frustrations with QB online.  I absolutely have clients who use two accounts receivable accounts.  For example, I have a private school that receives tuition payments, grants, donations, and other fees (lunch, athletics, testing, etc).  All of these are due on different schedules and all of these are assigned to a different person for collections.  One person works with the parents who have monthly tuition payments due.  That is a completely different person than the person who does our fundraising and collects on donations.  If the person in charge of donations wants to know who has an outstanding pledge balance I need to run them a report that doesn't have 200 parents with tuition balances.  Once a month the person in charge of tuition payments needs to go through and follow up with any parents who have balances due.  They want to see a report that doesn't have the balances of what people have pledged as donations that aren't due until the end of the year.  In the desktop version I can run a report of Accounts Receivable Tuition separate from a report of Accounts Receivable Donations.  So much simpler than the process I have to do in the online version to see who owes what based upon the income the invoice is assigned to.

 

This is just one of several clients I have this struggle with because the online version doesn't do what the desktop version does.

Moderator

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Hello, @Bamidbar.

 

I appreciate you sharing the complete details of your concern. I'm here to help make sure that this is taken care of.

 

I can see how this option would be helpful for you and your business. I'll be sure to pass along your request to see more customization and options within the program. These requests and suggestions are forwarded to the Product Development Team for consideration in future updates. I also invite you to leave feedback as well.

 

This can be done directly through your account by clicking the Gear icon in the top right corner, then select Feedback or by going to this link: https://feedback.qbo.intuit.com/.

 

Please let me know if I can be of any additional assistance. I'm always here to help. Take care!

Level 2

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

This is ridiculous to have the capacity to create different A/R and then not be able to use them.

Since being forced to use QB online there are downsides compared to the old desktop version.

As a user who has been familiar with a previous feature I've wasted an hour going through all sorts of options to make this work and then searching the web to find what I'm doing wrong, only to find it can't work. That's really bad development on the part of Quickbooks.

Please make these different A/R assignable properly to the products and services.

Level 7

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Looks like you can customize the AR report to filter by several criteria, have you tried doing that?  Think I would try invoice number assuming they use different invoice numbering sequence or maybe payment terms are unique.  Look doable.

Level 2

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

I don't want to search on it by some other mysterious means. I have allocated products to different 3 accounts receivable - that works. But then when invoices are actually done and payment is received every  single transaction, no matter what ends up being assigned to the first default account receivable, so when I look at my 3 A/Rs 2 are always empty and one has everything.

QuickBooks Team

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Hi @jaffakatie,

 

QuickBooks will always use the default Accounts Receivable (A/R) account to organize your books.

 

In order for you to transfer the amounts, you’ll need to create a Journal Entry.

 

If you still have other concerns feel free to post here. Have a wonderful day!

 

 

Anonymous
Not applicable

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

This is a silly "fix" to the issue.  Journal entries are unable to be coded as an "accrual basis only" transaction, so the journal entry will then create a cash transaction when it shouldn't.

QuickBooks Team

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Hello there, @danhuhn79.

 

Allow me to share additional information on how QuickBooks Online handles recording of your Accounts Receivables. 

 

As mentioned by my colleagues, @IntuitJill, QuickBooks Online uses one default Accounts Receivables account in recording your invoice transactions. When you create an Invoice, it means you’re creating an Unpaid Sales. Thus, it is something you’re about to receive.

 

Once the payment is received, the invoice (Account Receivable) is cleared and you record an Income. Now, the income may be associated or recorded on a specific Income account. 

 

Here’s the workflow in recording your transactions:

  1. Create an Invoice => recorded to default Account Receivables account.
  2. Receive Payment => Recorded to the specific Income Account selected for each line item on the invoice. At the same time, payments are still recorded under Undeposited Funds.
  3. Record Deposit => Just select the correct Deposit To account when receiving the invoice payments.

You can pull up the Transaction Journal report of an invoice for you to see how the transactions are recorded in the system.

 

On the other hand, you can group your account receivables by using the location tracking feature of QuickBooks Online. This will allow you to run reports for all the transactions assigned to a specific location or Business type associated with an Accounts Receivable. 

 

 

By using the location tracking feature, you can generate the Customer Balance Detail report and filter it to show customer balances per location or business type.

 

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That should do it! Stay in touch with us here in the Community if you have other questions about tracking your Account Receivables in QuickBooks Online. I’m always here to help.

Level 7

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Accrual-basis accounting would require these entries on the last day of accounting period:

DR AR Unbilled

CR Revenue/Income

 

Then on the date that invoice is submitted to customer, these entries:

DR AR Billed

CR AR Unbilled

 

Then on the date you receive payment for that invoice:

DR Cash

CR AR Billed

________________________________________________________________________________

 

For small businesses who are able to do customer billing ON the last day of period (like 3/31), they can combine the first two entries to record revenue and billing on that exact same date.

Level 7

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

jaffakatie -

 

I totally agree,  I hate workarounds on any system, but I work on many different accounting systems with large and small businesses and can tell you that most use single AR account on Balance sheet tied to one AR Aging report.  Any breakdown of AR is typically on the Revenue/ Income side of entry since AR is a pass-through account that equals zero in the end.  So as I suggested, normally you'd split AR by customer, customer type, project or project type, etc. to split as your company needs. 

Level 7

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

danhunh79 - 

 

No entries are "coded" as accrual-basis or cash-basis and no journal entry "creates" cash entry.

Entries are made on cash or accrual-basis by a person who inputs the transaction, based on the timing of business activity and the date and account used on the actual transactions as posted.

 

Easy example, cash-basis sales, entry is made to DR Cash and CR Income the day cash moves.  Accrual-basis, DR AR and CR Income when earned, then payment is received at a later date.

 

QB cannot do accrual-basis accounting for you, all it can do is allow you to run reports that are set up to EXCLUDE entries posted to AR and AP accounts, thus NOT counting them in reports that are Cash-basis.  So if that is not really doing cash or accrual-basis accounting, but is a mix.

 

 

Level 3

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Exactly.  I have to go and do a plethora of journal entries to correct AR balances each time I receive payment.  So time consuming when I could just use different AR accounts in the desktop version.

Level 3

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

So moving from QB desktop to QB online means I have to go into hundreds of customers and add a "customer type"???  How about those who pay me for donations and for tuition?  In the desktop version I assign their invoice to the appropriate AR account.  Which customer type do I use now?  Or do I have to have a customer for a family paying tuition and then create another customer for the same family when they are making donations so that they each have a different customer type.  That means I'm then adding hundreds more duplicate customers to be able to run a report by customer type...  A report I can run on desktop without having to make any adjustments.

QuickBooks Team

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Hi Bamidbar,

 

I also like the idea of using Customer Type, but it's only good if each your donors will only donate for one particular thing.

 

You can achieve the report you need by using the Class tracking feature. You will track all transactions as donations, tuition, etc, even from the same customer. Then, you can run a sales report for one class, filter the unpaid donations, and share it with the collector.

 

To turn on the Class tracking feature:

  1. Click the Gear icon and choose Accounts and Settings.
  2. Click on Advanced and click the Categories section.
  3. Put a check mark in the Track Class checkbox.
  4. Choose whether you want to assign classes on the entire transaction or in the line items (row).
  5. Click Save and click Done.

You will then see a CLASS field on your transactions. Just click on the empty field, and the down arrow. Then, click Add new to create a class name (as shown in the screenshot), and use it on other transactions.

 

 

When you need to see the balances of the donors from each class, you can run the Sales by Class Detail report and filter the unpaid sales.

  1. Go to Reports.
  2. In the search box, enter Sales by Class Detail and click the result.
  3. Click on Customize, and expand the Filter section.
  4. In the Class drop list, select Specified or only select a specific class for a collector.
  5. In the A/R Paid drop list, select Unpaid.
  6. Put a check mark in the Customer checkbox.
  7. Click Run Report.
  8. Click the down arrow beside Sort and sort the transactions by Customer.

 

You can export the report to Excel to get the total amount for each customer using the Excel functions.

 

We'll be happy to help you again if you have more questions.

Level 7

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

My guess would be that multiple AR accounts probably caused problems for users on QBDT.

Level 7

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Sounds like you more likely would want to your split to be between tuition and donations, which you already said you split between accounts.

Level 3

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Hello JessT.... 

 

I appreciate you trying.  We're a non profit so we already use the class feature for admin/fundraising/programs.  Thanks though.

Level 3

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Teri...  Yes we split income between donations and tuition but that doesn't help me in running a receivable report by donation versus tuition.

QuickBooks Team

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Let me step in for a moment and clear this out for you, @Bamidbar.

 

QuickBooks Online (QBO) only accommodates one Accounts Receivable account. Splitting income between donations and tuition' A/R subcategory will require you to create a journal entry.

 

I have a suggestion for modifying the income account of your items, so you can run the Profit and Loss report. This will help identify the amounts for donations and tuition.

 

Here are the steps in editing the setup of your products and services:

  1. On the left menu, click Sales.
  2. Go to the Products and Services tab.
  3. Select the item and click the Edit link under the Action column.
  4. Update the Income account associated to the item, either donations and tuition.
  5. Click Save and close.
    2.PNG

For additional reference, you can check this article: How to create and use a products and services list.

Another options are setting up or assigning Customer Type or Projects.

 

Let me know how it works for you. You can just click the "Reply" button. I'll be around to help you more. 

Level 7

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Bambidar - Yes, sorry did not explain that very well. Meant to say you could setup Customer Types or Classes or Jobs or whatever else the AR can be sorted on.  Then call them Donations and Tuition.

Level 3

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

 

Level 3

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Thanks Teri... Now I understand what you're saying.  We already use classes but I could add a customer type.  This just means I have to go into hundreds of customers and add a type.  Also, most of the families pay a tuition and also make a donation so I can't just assign a person to one or the other.  In QB desktop I can have one customer and assign their tuition invoice to a tuition receivable and their donation invoice to a donation receivable.  I don't know how to do this in QBO if I have to assign a customer one type.

QuickBooks Team

Re: How do you change the Accounts Receivable Account on Invoices in QuickBooks online?

Thanks for getting back to us for additional support, @Bamidbar.

 

The suggestion I provided about modifying the income account of your items is just a workaround to track the amounts for donation and tuition. You'll need to pull up the Profit and Loss Detail report and add the A/R column to identify if it had been paid or not. Please see my screenshots below:

 

Also, just want to add what Teri suggested above, if you'll be going to use the Customer Type, you can pull up the Sales by Customer Type Detail report. You can still add the A/R column. Please see the screenshot below:

 

 

For projects, you can go to the left menu and choose the Project tab. It will show you the list of projects and will visualize the current income and costs.

 

That should do it! Let me know if you need further assistance. I'm always happy to help.

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