AR Cleanup

Hello @TaFanesamekeya,

To clean up old AR in QuickBooks, here’s a simple process you can follow:

• Confirm payments: Cross-check invoices with bank records or payment processors to verify what's been paid.
• Apply payments: If payments were received but not recorded, apply them to the correct invoices.
• Write off small balances: For any unpaid amounts that are uncollectible or minor, consider writing them off.
• Reconcile regularly: Going forward, ensure you reconcile monthly to prevent this from happening again.

This will give you a clearer picture of your AR and make your books easier to manage.

P.S.: I’m a QuickBooks ProAdvisor with 7+ years of experience. Need help with QuickBooks Bookkeeping?

Google my username, @kabel1657, to see my proven track record!

To clean up your AR from 2018, you'll need to find the payments that haven't been applied and allocate them to Accounts Receivable. Let me help you with this process, @TaFanesamekeya.

First, ensure that all bill payments are applied to bills and all receive payment entries are applied to invoices to clear up balance in your AR. We can locate the unapplied payments by going to the Reports. 

Here's how:

1. From the left menu, select Reports.
2. Enter Customer Balance Detail in the search field. 
3. Review the report and find any unapplied payments.

Next, apply them in the Accounts Receivable.

1. Select the Transactions menu and proceed to the All sales section.
2. From the Type drop-down, choose Money received.
3. Choose a customer from the Customer drop-down and select Apply.
4. To pull up the Receive payment window, select the unapplied payment.
5. Choose the invoice payment in the Outstanding Transactions section.
6. Once done, Save and close.

Additionally, regularly reconciling your accounts will ensure that your bank and credit card statements are always balanced and accurate, helping to avoid discrepancies.

If you need further guidance on cleaning up your Accounts Receivable in QuickBooks, please don't hesitate to post your questions in the thread. I'll ensure you receive the answers needed to achieve your goals. Have a good one.

@ShangY Wow! Thank you so much. Bank accounts changed before I arrived. I was thinking I need to figure out IF payments were ever received to start. For example, if there’s an open invoice from 2018, I would need to confirm we received the payment in our checking account before receiving it in QBO. Let me know your thoughts. Thank you. 

@kabel1657 I’m going to do just as you noted. I spent the first few months making sure I had solid systems in place moving forward before I attacked the backlog. Mucho thanks!

Thanks for coming back to this thread, TaFanesamekeya. Let me chime in to confirm some things.

Yes, you'll need to verify if you received the payment in your bank account through your bank statements. Once you've done that, you can proceed to applying the payments using the steps provided by my colleague above. 

If there are no unapplied payments for an invoice that has already been paid, you can use a Bank deposit transaction to record the payment. Here's how to do that:

1. Go to the +New button.
2. Select Bank deposit.
3. Make sure to pick the right account and enter the correct date.
4. Fill out the form with the necessary details.
5. Click Save and close.

You can also refer to this article for more info on recording bank deposits: Record and make bank deposits in QuickBooks Online.

I'd also suggest regularly reconciling your accounts in QuickBooks to ensure they match your bank statements: Reconcile workflow.

Let me know if you have other questions about managing invoices and applying payments in QuickBooks, TaFanesamekeya. I'll be around to assist you. Take care!

what if you have over payments from previous years? I only just checked my A/R and realised there is invoices that are over paid. Previously I had go to a point where the accounts couldn't be reconciled so the extra funds I transferred out to owners drawings.

Thanks for joining this thread, bigbudoofish.

In QuickBooks Online (QBO), there is a proper way to handle customer overpayments. For more information, please visit this article: Handle a customer credit or overpayment in QuickBooks Online.

Since you have already transferred the extra funds to your Owner's drawings account, if you would like to apply those funds toward your customer's invoice, you can either reverse the transaction or delete the transfer. After that, please follow the steps outlined in the article I provided earlier.

Regularly reconciling your accounts ensures your bank and credit card statements are balanced and accurate, which helps prevent discrepancies.

Moreover, did you know that we provide a complimentary session with our QuickBooks Live Expert Assisted service? Our experts excel at making financial management effortless and offer tailored advice, especially in managing your sales.

Reach out to us if you have other QuickBooks concerns. We’ll be right here to help and make sure you’re taken care of. Have a good one!