Clear A/R in QB Desktop

I understand the importance of clearing accounts receivable for the customer and properly reflecting the payment in your QuickBooks Desktop (QBDT), MPHarr. I'm here to share insights about this. 

To mark the invoices as paid and deposited, we can link the deposit to the invoice using the Receive Payment function. We can open the deposit and ensure that the affected account is under Accounts Receivable (A/R).

Here's how:

1. From the Homepage, click on Record Deposits.

2. Double-click on the deposit to open it and view the details.

Once done, we can apply it as an invoice payment. 

1. Go to the Customers menu and select Receive Payments.
2. In the Receive Payments window, choose the customer who made the payment from the Received From drop-down menu.
3. Select the invoice that corresponds to the payment you want to link to the deposit.

4. Once done, click Save & Close to link the payment to the invoice.

Another option is to create a Journal Entry (JE) to clear any accounts receivable in QBDT. With this, I'd recommend consulting your accounting professional for additional guidance. They can advise you further on what account to use and ensure your records are accurately balanced.

Moreover, you'll want to visit this reference to guide you in reconciling your accounts: Reconcile an account in QuickBooks Desktop.

Let me know in your reply if you have any other further questions about managing invoice payments in QuickBooks Online. I'd be glad to help you out. Have a good one. 

@MPharr-Huggins 

"I know I can do a JE, and credit the A/R for the customer, but what account do I debit? If I debit the “undeposited funds” account, it adds funds more to that account."

Debit Undeposited Funds (UF).  If the previous bookkeeper made a manual deposit from UF, that would have decreased UF.  This will increase UF by the same amount and zero it out.    

I'm having the same problem with a set of totally messed up books I "inherited" with my new job last July. The previous bookkeeper entered some sort of deposit (that I can't even find on any bank statements). This happened in 2022 so I can't change the account it posted to. The "customer" therefore is showing a credit balance. I tried entering an invoice to that customer, hoping to be able to apply the credit. However, since that credit wasn't posted to A/R, and I can't change it, I seem to be stuck.

Any ideas?

@SueRazz 

The scenario you described is a bit confusing.  You mentioned the customer "is showing a credit balance" but you also mentioned the "credit wasn't posted to A/R".  If it wasn't posted to A/R, what type of credit are you referring to?

Well, it was what I call a fake A/R account that should never have been created or used. I actually figured this out. I posted the "invoice" I created to fix it to this fake account and was able to apply the credit then and clear the account. Thanks!