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Level 1

How do we clear out the zero balance from the Open Invoices report?

We have a deposit that was entered in 2012 using our accounts receivable GL.  An invoice was never created for the deposit so the item shows up as a negative on our Open invoice's report.  Our accountant gave us an adjusting journal entry for the amount so AR would zero out.  How do we clear out the zero balance from the Open Invoices report?

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Best answer 12-10-2018

Best Answers
Level 15

"Our accountant gave us an adjusting journal entry for th...

"Our accountant gave us an adjusting journal entry for the amount so AR would zero out"

Your Accountant is not someone who really understands QB well. They are directing you to use a function that isn't used for AR: instead of JE, you use Receive Payment, for funds. Or, you use a Credit Memo to clear the AR balance against income or expense.

Journal Entries are not processed by the program as to be applied to invoices and bypassed Cash Vs Accrual Basis and don't Age properly.

You can point out: I will make the entries to get the accounting that you want, but I learned I should be using Customer Transactions for Ar activity and not JE.

"We have a deposit that was entered in 2012 using our accounts receivable GL.  An invoice was never created for the deposit so the item shows up as a negative on our Open invoice's report."

Then you had Unapplied Cash income all this time; you wanted an Invoice, not a JE. You can imagine how that impacts the accuracy of sales and tax reporting, too.

Deposits to AR manually = Use Receive Payment. And if there is no invoice, then you use Sales Receipt, because there is no AR involved at all.

View solution in original post

8 Comments
Level 15

"Our accountant gave us an adjusting journal entry for th...

"Our accountant gave us an adjusting journal entry for the amount so AR would zero out"

Your Accountant is not someone who really understands QB well. They are directing you to use a function that isn't used for AR: instead of JE, you use Receive Payment, for funds. Or, you use a Credit Memo to clear the AR balance against income or expense.

Journal Entries are not processed by the program as to be applied to invoices and bypassed Cash Vs Accrual Basis and don't Age properly.

You can point out: I will make the entries to get the accounting that you want, but I learned I should be using Customer Transactions for Ar activity and not JE.

"We have a deposit that was entered in 2012 using our accounts receivable GL.  An invoice was never created for the deposit so the item shows up as a negative on our Open invoice's report."

Then you had Unapplied Cash income all this time; you wanted an Invoice, not a JE. You can imagine how that impacts the accuracy of sales and tax reporting, too.

Deposits to AR manually = Use Receive Payment. And if there is no invoice, then you use Sales Receipt, because there is no AR involved at all.

View solution in original post

Level 1

Thank you!

Thank you!
Level 6

Go to customer>receive payment and click the adjustment a...

Go to customer>receive payment and click the adjustment and the payment to clear each other out.  It will be a zero transaction.  Date it in the current fiscal period.  

Level 1

Re: "Our accountant gave us an adjusting journal entry for th...

I'm new to QB and came into a company that has a few Accountant Adjusting entries in the General Journal for 2016/2017. I'm trying to get them out of Open Invoices.  Do I need to make additional General Journal entries to get them out of Open Invoices?  I'm just not sure if that will screw anything up for prior years.

QuickBooks Team

Re: "Our accountant gave us an adjusting journal entry for th...

Thanks for joining this thread and welcome to the QuickBooks Community, @LisaO45

 

I'll share some information about removing your open invoices from 2016 to 2017 period. 

 

You don't need to make additional journal entries since we can use the customer transactions for A/R activity in the program. This is what @qbteachmt suggested above and I'm here to guide you through the steps. 

 

First, you'll need to create a credit memo for each customer. Please keep in mind that you'll need to date it in the current period. By doing so, it will clear the open balances due for prior years. 

 

Here's how: 

 

  1. Go to the Customers menu at the top.
  2. Select Create Credit Memos/Refunds.
  3. Choose the appropriate customer from the Customer: Job drop-down.
  4. Set the Date in the current year.
  5. Enter the returned items in the line item area, then click Save & Close.
  6. On the Available Credit window, choose Apply to an invoice. This will open the Apply Credit to Invoices window where you can select an invoice to which you want to apply this credit.
  7. Click OK.

 

If there were no deposits created for the open invoices, you can use the Receive Payments feature. You'll have the option to apply the credit memos to these open invoices. 

 

I’m adding this helpful article to learn more about the Accounts Receivable Workflows in QuickBooks Desktop

 

This will get your books in order, @LisaO45

 

Please drop me a line below if there’s anything else you need.  I’ll gladly help. 

New Member

Re: Go to customer>receive payment and click the adjustment a...

@lyndaartesani's advice is a bit scary because it works, but there is no obvious trail.  I used it, but are there ways to track what I've done?  I can't find that I applied these discounts in the current period.  I can't find that I applied these discounts/credits at all. Can you please assist me in tracking my work, so I can show others what I have done?

Moderator

Re: How do we clear out the zero balance from the Open Invoices report?

Good to have you here,  TheresaD0327.

 

We can pull up the Transaction Journal report that shows the debits and credits for each transaction. I'll show you how:

  1. Locate the name of your vendor/customer.
  2. Locate the transaction you want to track the applied discounts.
  3. With the transaction open, select Reports.
  4. Choose Transaction Journal.

Now, you can track the transaction that you've applied for the discounts/credits. 

 

I've added an article about viewing the transaction journal report to learn more information and serves as your reference: View the Transaction Journal report in QuickBooks Desktop

 

Let me know if you need more help with navigating QuickBooks. I'm here to help.

New Member

Re: How do we clear out the zero balance from the Open Invoices report?

Thanks but the transaction journal did not show that I added the discounts to the 2016 payments so that they were 0'd out. I tried to look yesterday when I was on that computer, but it was not there. Here were my exact steps:

My issue was that there was a payment showing on the open invoice report with an accompanying general journal entry equaling it out in 2016 and 2017. 

 

Customers tab -> Recieve Customer Payment

Customer:Job -> Search for customer on my open invoice report

-- This would pull up the customer with the payment(s) in 2016. I didn't have to add anything to it (point of fact I couldn't if I tried, unless I added an amount in the 'amount' box under the customer box)

-- You could also see by the bottom of the screen the "Available Credits"

Clicked on Item

Clicked on the Box marked "Discounts and Credits"

-- Brought up a dialog box to apply credits

-- Here was where my General Journal Entries showed.

Checked the appropriate "Available Credit" box

Clicked Done.

(At this point it didn't matter if I clicked the 'X' to close the window or if I clicked 'Save and Close/New")

I have tried to put in in photo below. Since it's not a test system I wanted to make sure the company name and customer name were hidden.  The rest of the information seems oblique enough.

step 1.JPG

 

step 2.JPG

 

step 3.JPG

 

I can't see to find a transaction entry for these steps, but it certainly cleared my "Open Invoices" report and seems to have connected the JE with the Payment.

 

 

 

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