The following table is the Recipe Reference Card for the keyboard shortcuts included in this article:
Find | Ctrl+F |
Delete the line | Ctrl+Del |
Save and close | Alt+A |
Advance to the next field | Tab |
Regress to the previous field | Shift+Tab |
Customize the report | Alt+M |
When the Undeposited Funds window includes customer payments, which you know have already been deposited, recorded, and reconciled, the Income or Unearned Income and Undeposited Funds accounts are overstated. You can use this recipe to efficiently combine the cleared deposit with the undeposited funds.
Verify that the appropriate bank account is reconciled for the period containing the stale undeposited funds. If not, this can be resolved simply by deleting the recorded deposit and recording the deposit of the undeposited funds.
The only way to directly delete an item added to Undeposited Funds is to delete the underlying customer payment or sales receipt. However, this is not advisable, because these transactions are typically accurate representations of a real-world activity.
Additionally, when the deposit was recorded, the related account duplicated the income or customer deposit from the original invoice or sales receipt.
Therefore, the deposit itself needs to be modified to simultaneously remove the duplicate offset account, and resolve the outstanding Undeposited Funds item.
For a printable and memorizable list of all outstanding items in the Undeposited Funds account, open the Undeposited Funds ledger. Click on Customize Report | Filters | Choose Filter | Cleared | No. On the Header/Footer tab, in the Report Title field, enter Undeposited Funds, and click on OK.
Does your cash basis balance sheet show balance in your receivable or payables accounts? This recipe will take you through the two-step process of resolving these items:
To find out which customers and vendors are responsible for your cash basis accounts receivable or accounts payable balances, respectively, run the following report:
Some of the most likely patterns to scan for include the following:
The most common reasons for a cash basis receivables or payable balance are:
Making a journal entry to write off stale A/R in bulk is easy, but this makes it difficult to trace through the accounting records. The possible uses for more precise information include producing a trail for taxing authorities, internal or independent auditors, or banks. A separate spreadsheet may suffice, but it may be difficult to coordinate. This recipe focuses on straightforward ways to write off these balances in a detailed, but effi cient fashion.
Have your criteria ready for which invoices are to be written off. The A/R Aging Summary report may help (Reports | Customers & Receivables | A/R Aging Summary).
To further analyze your oldest receivables:
To write off a stale receivable:
If an allowance for doubtful accounts is used against bad debt for writeoffs, then set up the Allowance account as an Accounts Receivable account type , and select the Allowance account from the drop-down box at the top of the Customer Payments screen. A set of journal entries can be used later, to remove the amounts from both Accounts Receivable and the Allowance account.
This is the same procedure that can be used to record discounts, but the key is that an income or expense account must always be selected. This procedure is not appropriate for a balance sheet account to be selected, such as debiting a liability account while crediting A/R, or debiting the Allowance account while crediting A/R. This will cause a cash basis balance sheet report to be out of balance.
If that combination of debits and credits is essential, then use a journal entry instead. Then, apply the journal entry to the original invoice, by opening the invoice, and clicking the Apply Credits button.
When this recipe is used to write off receivables, Act. Revenue is reduced in the Job Profitability Summary report , and there is no effect on the Item Profitability Summary report. The same reporting results are attained if a journal entry is used to debit Bad Debt Expense and credit Accounts Receivable.
If a Credit Memo is used instead, Act. Revenue is reduced in the Job Profitability Summary report as well as the Item Profitability Summary report.
In order to increase the Act. Cost column in the Job Profitability Summary report instead, use the Write Checks screen in an unusual fashion: on the Items tab, use an Other Charge item called Bad Debt or Writeoffs. When you create this item, link it to the Bad Debt Expense account. On the Write Checks screen, be sure to enter the Customer:Job name as well as the writeoff amount.
On the Expenses tab, select Accounts Receivable, and enter the writeoff amount as a negative number, so that the total amount of the check equals 0. Be sure that the check bears no check number, and clear it in the next bank reconciliation.
This technique causes both the Job Profitability and Item Profitability reports to show the transaction as an expense, rather than as a reduction of revenue. It works because QuickBooks includes the Write Check transactions in the Act. Cost column of these reports.
Making a journal entry to write off stale A/P in bulk is easy, but makes it difficult to trace through the accounting records. Possible uses for more precise information include producing a trail for taxing authorities, internal or independent auditors, or banks. A separate spreadsheet may suffice, but may be difficult to coordinate. This recipe focuses on straightforward ways to write off these balances in a detailed but efficient fashion.
Have your criteria ready for which bills are to be written off. The A/P Aging Summary report may help (Reports | Vendors & Payables | A/P Aging Summary).
To further analyze your oldest payables:
The advantage of this recipe is that the transaction is created and applied to the bill in a single step. However, the drawback is that it does not appear in the Job Profitability Summary or the Item Profitability Summary reports. For that to occur, create a vendor credit instead, by using the Enter Bills screen, and clicking on the Credit button.
Then, use the Items tab to record the credit, using the same item that was used in the original bill. Additionally, use the Customer:Job field to apply the credit to a particular job.
For a partial writeoff, after the Discount and Credits window is closed, be sure to manually input 0.00 into the Amt. to Pay field. The default is to include the remaining balance in that field, and this recipe assumes that the current action is only to record writeoffs, not payments to vendors.
How can a balance sheet get out of balance in a software program? If you’re reading this recipe, you may have already seen for yourself that the impossible can happen. The following is a procedure to root out the transaction which is causing this phenomenon.
A balance sheet prepared on the cash basis can be out of balance if certain transactions were saved, for example if the Discount feature was used with a balance sheet account.
If the Discount feature was used to reclassify an Accounts Receivable balance to Retainage Receivable, make a journal entry to achieve the same General Ledger effect instead, and apply the transaction to the original invoice, by opening the invoice and using the Apply Credits button.
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