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faratun
Level 1

Realized that ALL invoices to customers hitting the loan to director accounts (default), instead of Trade Receivables. How to change this setting?

 
Solved
Best answer February 24, 2020

Best Answers
Jen_D
Moderator

Realized that ALL invoices to customers hitting the loan to director accounts (default), instead of Trade Receivables. How to change this setting?

Great to have you back, @faratun,

 

I can share further insights about the Accounts Receivables posting of your invoices.

 

AlexV is right. QuickBooks is using one default Accounts Receivables (A/R) account for customer invoices. It looks like the GL Code 1215 (Due From Director) is set as the default A/R register for transactions after the conversion.

 

While we can't set 2 receivables in the program, we can merge the two accounts and rename it as GL Code1200 (Accounts Receivable /TradeDebtr). Don't worry, none of your transactions will be deleted when doing this process.

 

Follow this step-by-step process:

 

  1. Go to the Accounting section and select Chart of Accounts.
  2. From the list, locate the director's loan account (GL Code 1215).
  3. In the View Register drop-down, select Edit.
  4. Use the same name for the GL Code 1200 - Accounts Receivable /TradeDebtr in the name field and number on the Description. To merge accounts, one must use the same name for both registers.
  5. Click on Save and close.
  6. You will see the merge option, click Yes on the prompt.
  7. The transactions posted on the GL Code 1215 will be combined to the winning account.

Now that you have only one A/R account, all the transactions will post there moving forward. While the balance of the second account is merged together with the default register, create a new account for GL Code 1215. Once done, transfer the funds using journal entries. Here's how:

 

  1. Click the (+) New icon and select Journal Entry below the Other section.
  2. Credit the account you want to remove the balance. 
  3. Debit the A/R you want to transfer the balance to. 

 

Here's a sample screenshot:

 

If you have any questions, let me know in the comment. I'll be right here to provide further assistance and insights. Have a nice day!

View solution in original post

4 Comments
AlexV
QuickBooks Team

Realized that ALL invoices to customers hitting the loan to director accounts (default), instead of Trade Receivables. How to change this setting?

Let me clarify something about accounts receivable, faratun.

 

QuickBooks Online has a default Accounts Receivable account (A/R). All invoices will be posted into that account regardless if you created a different A/R. If you'd like to transfer the balance to a different account (Trade Receivables), you can create a journal entry.

 

The most possible reason why the invoices are posting in your "director accounts" is that you've selected it as your income account when setting up the item. We can change it by editing the product/item.

  1. Go to the Sales tab and select Products and Services.
  2. Locate the product/item and click Edit.
  3. Change it from the Income account drop-down. Select Save and close.

If the products/items are either Service or Non-inventory type, you'll see the Also update this account in historical transactions option when updating the Income account. By checking this option, the changes will affect the old transactions, including invoices.

 

I'll be glad to help if you have more questions. Please comment again if you need more help.

faratun
Level 1

Realized that ALL invoices to customers hitting the loan to director accounts (default), instead of Trade Receivables. How to change this setting?

Hi Alex,

Thank you for guiding us and clarify the function of Account Receivable.

 

For your information, previously, we used QuickBooks Pro and such problem never occurred, e.i when we issue invoice to our customers, it is automatically Debiting the Trade Receivables (GL Code:1200)

Apparently, we are using QuickBooks online for 2 days and we have recently issued 2 invoices to our existing customers using the same method of posting but they were  automatically hit to this (GL Code:1215). 

 

Herewith, I attach the chart of accounts maintenance for your good reference.

Appreciate if you could assist us to solve this technical problem.

faratun
Level 1

Realized that ALL invoices to customers hitting the loan to director accounts (default), instead of Trade Receivables. How to change this setting?

Hi Alex,

Thank you for clarifying the AR function.

However, we don't have any issue on preparing invoices to our existing customers through our previous Quick Books Pro. It was automatically will debit to the GL Code of 1200.

Apparently, we have migrated our accounting systems to Quick Book online last week. We have noticed that all invoices that we issued to existing customers do not debit to GL Code1200 (Trade Receivables), but they were debited to Loan to director GL Code 1215 (Account Receivables).

Please assist us.

Jen_D
Moderator

Realized that ALL invoices to customers hitting the loan to director accounts (default), instead of Trade Receivables. How to change this setting?

Great to have you back, @faratun,

 

I can share further insights about the Accounts Receivables posting of your invoices.

 

AlexV is right. QuickBooks is using one default Accounts Receivables (A/R) account for customer invoices. It looks like the GL Code 1215 (Due From Director) is set as the default A/R register for transactions after the conversion.

 

While we can't set 2 receivables in the program, we can merge the two accounts and rename it as GL Code1200 (Accounts Receivable /TradeDebtr). Don't worry, none of your transactions will be deleted when doing this process.

 

Follow this step-by-step process:

 

  1. Go to the Accounting section and select Chart of Accounts.
  2. From the list, locate the director's loan account (GL Code 1215).
  3. In the View Register drop-down, select Edit.
  4. Use the same name for the GL Code 1200 - Accounts Receivable /TradeDebtr in the name field and number on the Description. To merge accounts, one must use the same name for both registers.
  5. Click on Save and close.
  6. You will see the merge option, click Yes on the prompt.
  7. The transactions posted on the GL Code 1215 will be combined to the winning account.

Now that you have only one A/R account, all the transactions will post there moving forward. While the balance of the second account is merged together with the default register, create a new account for GL Code 1215. Once done, transfer the funds using journal entries. Here's how:

 

  1. Click the (+) New icon and select Journal Entry below the Other section.
  2. Credit the account you want to remove the balance. 
  3. Debit the A/R you want to transfer the balance to. 

 

Here's a sample screenshot:

 

If you have any questions, let me know in the comment. I'll be right here to provide further assistance and insights. Have a nice day!

View solution in original post

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