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#QuickBooks Online #QBO – How to handle zero balances in accounts receivable aging

You have two ways to handle this issue in QBO:

  • Manual Setting
  • Automatic Setting (auto-mode)

You will need to select the one which is right for your business situation. When you create a new company file in QBO, normally this auto-mode is already ON as a default setting.

1zero ar aging

Manual method is commonly used when you have several customers open invoices and need to apply issued credit and received payment against a specific invoice. The credit memo may directly be related to certain specific project or a product return.
For example, you issued several product invoices to a customer. They returned one product and you had to issue a credit memo. They paid that invoice and also deducted for product return. For your business, you want to make sure, transactions (payment and credit) for that invoice is handled correctly. You would want to manually select that invoice; enter receive payment; apply credit and clear that invoice in A/R Aging.

To clear zero balance in A/R Aging:
From the home page screen > left navigation bar > customers > customer page > go to customer invoice > select “Receive Payment” under “Action” column
It will take you to “Receive Payment” screen. “Amount Received” should show zero because clearing “outstanding” and “credit” are for the same amount. Choose Save and Close. It should clear (disappear) zero balance in A/R Aging. Now, on customer page, status should indicate paid (instead of partial) and closed (instead of unapplied).

Click on the screenshots below to enlarge them
2customer page

3clear ar

4clear customer page status

Automatic method (default setting in QBO)
You can also choose “automatically apply credit” setting in QBO. By turning this setting ON, it will automatically apply credits to the next invoice you create for the same customer. General service-based companies (or non-project oriented companies) prefer turn on this setting. They do not deal with product returns. Invoices they issue are not sensitive to any specific project.

To turn on this automatic setting in QBO:
From the home page screen > company gear (upper right corner) > settings > company settings > advanced > automation > Automatically apply credits ON > save

5automatically apply credit setting

Once this automation setting is on, it is automatically take care of payment and credit. You will not see zero balances in Accounts Receivable Aging.

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How to create Accounts Receivable (A/R) Report for each Sales Rep (Salesman Report)

We will be using available Custom Fields, one for Sales Rep on Sales Forms (Invoice, Sales Receipt and Estimates). And, generate customized report to get Accounts Receivable for each Salesman Report. Since there is no way do it from the Customer Detail page. This page has no field for to include Sales Rep.

First, we will enable Custom Fields on. This feature is available in Essentials and Plus, but not in Simple Start.

From the home page screen > company gear (upper right corner) > settings > company settings > Sales > Sales form content > Custom fields > assign “Sales Rep” to custom fields > Check Internal and Public > OK > Done

Go to back to Invoice Form. Create Invoice. Assign Sales Rep on Invoice.

To generate report > From the home page screen > Go to blue navigation bar on the left > Reports > Go to report (magnifying glass) and type/select “A/R Aging Detail” report

Select Customize button (upper left) > Select “Change Columns” blue button inder Rows/Columns > Select “Sales Rep” from Available Columns list > Add > Move down or up to change order > OK

Go to Match > Sales Rep > Enter Name of Sales Person (as you have entered on Invoice)

Go Header/Footer > Change Report Title to: Customer Outstanding Invoices Report for Salesman by name (say Kathy as an example) > Run Report

Go to “Save Customizations” button > Name Custom Report (as you want it, say Kathy’s Report for example) > Add this report to a group by adding new name or selecting from existing list (optional) > Share this report with all company users (optional) > OK

Now, you have created and save Customized Report for Customer Outstanding Invoices Report for Kathy

You can follow the same steps to create customized report for each salesman.

Next time go to Reports and choose “My Custom Reports” and select Report from the list. Edit and Run Report as needed.

Watch Video Tutorial! We highly encourage you to watch the entire video. You do not want to miss a step!

1 Customer Information Page

2 Custom Fields

3 Invoice with Sales Rep Name

4 Customize AR Aging Detail

5 Select and Reorder Columns

6 Change Report Title Name

7 Customer Outstanding Invoices Report

8 Save Report Customizations