How to fix misapplied payments without messing up the reconciliations

pallc · ‎February 26, 2021

Hello,

Client uses QuickBooks Desktop 2018. Currently going through line by line, and I have found that one specific company that we service several locations for, has a bunch of payments that were incorrectly applied to multiple invoices.

From what I can gather so far, the former bookkeeper would open up the deposit window and select the wrong invoices; and when those invoices did not match up to the actual deposit amount , she would manually adjust the "amount applied" column, so there are several deposits that look as though the client underpaid or overpaid, and the invoice balances are incorrect.

I am still in the process of sorting through all of it, but a lot of these transactions are from 3-8 months ago and have clearly already been reconciled. What is the best way to adjust the balances so I don't throw off the reconciliation?

MaryLandT · ‎February 26, 2021

Let's fix those misapplied payments in QuickBooks Desktop, pallc.

You can still edit those payments and allocate to the correct invoices. Just make sure not to change the amount and dates of the transaction.

It won't affect those reconciled transactions as long the Total amount, Date, and Bank Account are the same.

If there's a need to correct all previous reconciliation, here's what you need to do: Reconcile previously deleted and re-entered checking or credit card transactions.

I'm also adding this link to help you with the process: Reconcile an account in QuickBooks Desktop.

Keep me posted if you have follow-up questions by commenting below. I'll be around to provide the information you need.

View solution in original post

MaryLandT · ‎February 26, 2021

Let's fix those misapplied payments in QuickBooks Desktop, pallc.

You can still edit those payments and allocate to the correct invoices. Just make sure not to change the amount and dates of the transaction.

It won't affect those reconciled transactions as long the Total amount, Date, and Bank Account are the same.

If there's a need to correct all previous reconciliation, here's what you need to do: Reconcile previously deleted and re-entered checking or credit card transactions.

I'm also adding this link to help you with the process: Reconcile an account in QuickBooks Desktop.

Keep me posted if you have follow-up questions by commenting below. I'll be around to provide the information you need.

Ritamc · ‎January 05, 2022

How do I fix AR payments applied to the wrong customer or invoice if I have already closed for the month?

JasroV · ‎January 05, 2022

I got your back, Rita.

You'll want to edit the closing date of your book to update it. Then, create a journal entry (JE) to apply the payment to the correct invoice. I'll show you how.

Go to the Company menu in your QuickBooks Desktop (QBDT), and select Set Closing Date.
Select Set Date/Password.
Enter a Closing Date and Closing Date Password.
Click OK to close the window.

You can also see this link for reference: Set or change a closing date and closing date password.

Once done, create a JE to apply the payment to the appropriate invoice. You can check out this article for the detailed steps about the process (though this article is for QuickBooks Online (QBO), the workflow also applies to QBDT): How to fix a payment applied to the wrong customer invoice.

I'd also recommend working with your accountant for guidance. This way, we can ensure the accuracy of your accounts after making these changes.

Furthermore, you might want to utilize this resource for guidance in matching your account seamlessly: Reconcile an account in QuickBooks Desktop.

You can always count on me if you have any other questions about invoices. Please feel free to leave the details in your reply and I'll take care of it for you. Stay safe and have a great day ahead!

KW0996 · ‎March 30, 2022

Hi Mary! Last month someone didn't receive remittance info and closed an invoice that I am seeing was just paid this month. There were two current, open invoices and the vendor paid an older invoice that happened to total the same amount. Is this something I can just fix but unclicking the two (wrong) incorrect invoices that were applied to the payment and clicking the invoice that was actually paid? Or can I not do this because it's in a closed period? I'm not sure of the effect this would have

MarsStephanieL · ‎March 30, 2022

Hi there, @KW0996. I'd be happy to help you with linking the payment to the correct invoice in QuickBooks Online (QBO).

You can manually unreconcile the affected transaction to undo the reconciliation. Then, link the correct payment to the invoice. Let me provide you with the steps below:

Go to the Accounting tab on the left panel.
Under Your Company, select Chart of Accounts.
Choose the account you’re working on, and click on View Register.
Select the transactions you want to unreconcile.
Keep on clicking the R status until it shows blank or cleared (C).
Click on Save.
Choose Yes in the confirmation window.

I also added a link to give more insights about unreconciling transactions. I'd also recommend consulting with your accountant before performing any of the steps. This is to ensure your records are in order.

Let me know in the comment section if you have additional questions about managing your transactions in QBO. I'm here to help. Have a good one.

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How to fix misapplied payments without messing up the reconciliations