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Super Contributor *

Clearing old accounts receivable activity

A local Nonprofit uses a specialized donation tracking system to record donations and track pledge receivables. All detail is held in the subsidiary system and a single invoice is entered to Quickbooks through a customer called DONATIONS. Monies received to pay the pledges has been applied as credits as bank deposits were made. The result is a ton of open invoices, credit memos, and payments on account.  I am correcting the processes for posting this stuff but I want to clear activity going back to 2003 for this "Customer".  Obviously, the "invoices" and the "payments/credits" do no line up.  Is there an easy way to apply the credits against the invoices in bulk?

Thanks

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Best answer 12-10-2018

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Established Community Backer ***

"and a single invoice is entered to Quickbooks through a...

"and a single invoice is entered to Quickbooks through a customer called DONATIONS. Monies received to pay the pledges has been applied as credits as bank deposits were made."

They should have been using Sales Receipts, then, if the payments are also already made.

"The result is a ton of open invoices, credit memos, and payments on account.  I am correcting the processes for posting this stuff but I want to clear activity going back to 2003 for this "Customer".  Obviously, the "invoices" and the "payments/credits" do no line up.  Is there an easy way to apply the credits against the invoices in bulk?"

Yes; the Accountant Edition has a tool to "fix unapplied payments" and you simply check all, to get the info cross-posted. This will affect their reports if they are Cash Basis, though, as that would nave been wrong all along.

If you don't have the Accountant Edition, you can set up the External Accountant in this file, and that reveals the Accountant Tools, even if you are using QB Pro.


38 Comments
Established Community Backer ***

"and a single invoice is entered to Quickbooks through a...

"and a single invoice is entered to Quickbooks through a customer called DONATIONS. Monies received to pay the pledges has been applied as credits as bank deposits were made."

They should have been using Sales Receipts, then, if the payments are also already made.

"The result is a ton of open invoices, credit memos, and payments on account.  I am correcting the processes for posting this stuff but I want to clear activity going back to 2003 for this "Customer".  Obviously, the "invoices" and the "payments/credits" do no line up.  Is there an easy way to apply the credits against the invoices in bulk?"

Yes; the Accountant Edition has a tool to "fix unapplied payments" and you simply check all, to get the info cross-posted. This will affect their reports if they are Cash Basis, though, as that would nave been wrong all along.

If you don't have the Accountant Edition, you can set up the External Accountant in this file, and that reveals the Accountant Tools, even if you are using QB Pro.


Super Contributor *

Thank you. I agree they have been booking it using the wr...

Thank you. I agree they have been booking it using the wrong tools. They need to post the invoice and then use RECEIVE PAYMENT to post the checks and direct deposits. Because these are summation entries from the subsidiary donation tracking system, they will never match up to clear. We are just going to apply them against any open item. I don't see another solution.
Active Member

I have a similar issue.  I need to clear the open pledges...

I have a similar issue.  I need to clear the open pledges with out impacting the cash (as it has been entered either via a Journal Entry or downloaded via banking).  How do I clear the open pledges?  There are a lot of open pledges.
Super Contributor *

Hi. It looks like you might be using another program like...

Hi. It looks like you might be using another program like Donation Tracker or Salesforce to manage your donations & receivables and then posting summary to QB. Is that correct?

Could you also elaborate on the entries to A/R made by the banking download? I suspect it is giving you unmatched payments in A/R but not sure.
Active Member

We used journal entries to enter the cash deposits for th...

We used journal entries to enter the cash deposits for the first 9 months, and then we linked the bank accounts and used that feature for the last 3 months.  The main issue is not to impact the cash accounts when we clear the invoices since the cash have been balanced to the bank statements.
Super Contributor *

So, to be clear, ` You book a pledge (receivable) by dono...

So, to be clear,
` You book a pledge (receivable) by donor (customer) within QB so each donor has its own (customer) account in QB?
`You have found using journal entries and then deposits to record electronic payments means you can't clear the donor/customer invoices.
`You want to clear existing donor/customer invoices and set up a process where this will not happen again.

Sorry but I want to make sure I completely understand the problem before I take a shot at an answer.  Thanks.
Active Member

Yes. Exactly.  I want to clear the old open pledges befor...

Yes. Exactly.  I want to clear the old open pledges before moving into the new year.  However, the cash has been entered using journal entries.  And for the new year, the goal is to use the invoice and the bank download features.  And we should be able to generate statements for each customer.
Super Contributor *

QBteachMT is the expert on this but my thought is to a....

QBteachMT is the expert on this but my thought is to

a. Set up a temporary account with type Bank (Temp Banking account)
b. Post a JE to reverse  each of the deposits/JEs and use the temp banking account.
c. Use Receive Payment to repost all payments using the temp banking account as the offset.
d. Reconcile the Temp banking account as you would any other bank account. Balance = zero
e. Validate all your work them suspend the temp banking account

You can set all this up in Excel and use the bulk load features in the Accountant's copy to load them. You should be able to do this pretty quickly if you download some reports to excel.
Make sure you have lots of explanation for what you are doing in the memo sections.
Established Community Backer ***

You don't use JE for AR, now or ever. These people need t...

You don't use JE for AR, now or ever. These people need to fix the Banking, since they have Income twice: Once as the offset of the Banking and once on the Pledge (sales forms). Their Banking Rec is not the issue. Their Credit Side is the issue. They used two different methods for handling Income. Run an Accrual Basis P&L to see it.
Super Contributor *

"since they have Income twice:". I am not seeing that.  T...

"since they have Income twice:". I am not seeing that.  The JE was a DR to cash and a CR to A/R. No income accounts. What am I missing?
Established Community Backer ***

It's right here: "However, the cash has been entered usin...

It's right here:
"However, the cash has been entered using journal entries."..."and a single invoice is entered to Quickbooks through a customer called DONATIONS. Monies received to pay the pledges has been applied as credits as bank deposits were made."

By the way, this is a Common mistake, when having two systems. Over-using the QB functions creates this mess. Doing Too Many things with the same data, in other words.

The banking deposit credits income; so do the Item(s) on the Pledges.
Not applicable

How are the accountants tools accessed in the nonprofit e...

How are the accountants tools accessed in the nonprofit edition?
ProAdvisor

Nope.

Nope.
Established Community Backer ***

"and posting the summarized results to Quickbooks" Which...

"and posting the summarized results to Quickbooks"

Which means not needing to use AR at all, as I keep explaining. Don't use "AR" type; use Other Asset Type and name it AR, for example.


Super Contributor *

LOL, these are my Accounts Receivable.....NOT my Other As...

LOL, these are my Accounts Receivable.....NOT my Other Assets.
Established Community Backer ***

"as it has been entered either via a Journal Entry " JE...

"as it has been entered either via a Journal Entry "

JE should never be used for AR activities.

"I need to clear the open pledges with out impacting the cash "

Your Banking should never show deposits as Income; if so, you double-entered income using two different methods. The Downloads should have been Match to Existing transactions, to reflect that the funds were payments against those open invoices. Remember that the Invoices have charge items on them = your Income, already.

"We used journal entries to enter the cash deposits for the first 9 months, and then we linked the bank accounts and used that feature for the last 3 months.  The main issue is not to impact the cash accounts when we clear the invoices since the cash have been balanced to the bank statements."

The Cash might be right, but the "reason" for that cash needs to be AR by each Name that has open pledge amounts. Invoice = pledge = unpaid sales, and that is already flowing to Income.

Here is how to Fix This, when banking shows income and the data file also is using sales forms listing income (pledge details):

You use Receive Payment now, for each Name that paid you, their amount and their date. Make sure this is flowing to Undeposited Funds.

You open a deposit screen that has "income" showing, and you select from UF. Remove the Lines that have Income here, and you end with the same total deposit for that date. This deposit will not even unreconcile.

Think of the deposit screen as the worksheet for what is Inside an envelope. You need to trade out the contents for each date of deposit, for each real name on an open pledge that really paid you.
Active Member

Thank you "JE should never be used for AR activities." So...

Thank you
"JE should never be used for AR activities."
So true.

"You use Receive Payment now, for each Name that paid you, their amount and their date. Make sure this is flowing to Undeposited Funds."  
How do I verify that is where it's flowing?
Established Community Backer ***

Let's return to this statement: "Obviously, the "invoices...

Let's return to this statement: "Obviously, the "invoices" and the "payments/credits" do no line up. Is there an easy way to apply the credits against the invoices in bulk?" Yes, the Accountant Edition has a "Fix Unapplied Payments" tool. You can apply AR to AR up to the point that this clears available credits against debits. That won't change Banking and any banking entry that shows as Income means the Invoicing process was bypassed.
Established Community Backer ***

"How are the accountants tools accessed in the nonprofit...

"How are the accountants tools accessed in the nonprofit edition?"

It depends on which Year you are asking about. In older years, you could log in to that data file as the External Accountant user. In newer years, you log in as External accountant and are validated for either being a Pro Advisor or owning the Accountant Edition, from what I understand. I haven't tried all the ways this works since they made this change.


Established Community Backer ***

"Since all the detail is in the donation tracking softwar...

"Since all the detail is in the donation tracking software and not in Quickbooks, all we really need do is post to the general ledger. "

Then, stop using AR.

"which posts to QB's A/R system"
Why are you tracking this to Both places?

All you need is Generic inflow as other Asset, for payments to clear that balance, and Pledges to create (debit) other asset and credit Income. You can do this with a Sales Summary = sales receipt method. Have you seen this:

Daily Sales Summary for Retailers by Long

There is no reason to use "real AR" for this. Managing the same details in two places makes no sense, and since these pledges might or might not be paid in full, and are over time, then trying to use QB AR, which is very Name-specific and required to be exact matching, makes no sense.
Super Contributor *

I am not "tracking" in two places. I am tracking in the s...

I am not "tracking" in two places. I am tracking in the specialized donation sub system and posting the summarized results to Quickbooks as that is my ledger of record.  I don't post to "other assets" because it is 99% of our Accounts Receivable. I can't use Sales Receipt because it would require that the funds received match the donation amount and they will never match.
Established Community Backer ***

" I can't use Sales Receipt because it would require that...

" I can't use Sales Receipt because it would require that the funds received match the donation amount and they will never match."

If you look at the Blog example, it explains how to use a Sales Summary to control all the data flowing, ending at $0, because you controlled every piece of info on it.

Yes, you Can Use a sales receipt for this; I can use a Z-out tape from a POS and one Sales Summary for that date, even with Other Asset activity in the data mix.
Super Contributor *

Or, I could post a journal entry for month's pledge incom...

Or, I could post a journal entry for month's pledge income, cash payments on pledges, and the difference reflects the change in A/R.
Established Community Backer ***

"They need to post the invoice and then use RECEIVE PAYME...

"They need to post the invoice and then use RECEIVE PAYMENT to post the checks and direct deposits."

You use Receive Payment because you didn't use Sales Receipts, if the Payments are the same date as the invoice. If they are the same date as the invoice, you don't need Invoices.

"Because these are summation entries from the subsidiary donation tracking system,"

Which typically means these also were Paid, right? These integrated systems send Paid Donation info, so you never needed invoicing.

"they will never match up to clear. We are just going to apply them against any open item. I don't see another solution."

You don't have to do this as AR, either. You can use Other Asset with generic values, and not try to manage as any customer name at  all. You don't need a customer name on sales receipts, at all.

Don't get wrapped up trying to use AR when there is no actual Customer and not AR at all.