Tag: journal entry

A case may occur when a customer wants to apply credit balance to an affiliated company’s open invoice.

EXAMPLE:

Customer (Mark) has a $500 credit balance. Customer (Martha) has a $500 Open Invoice. They like to clear the accounts by applying $500 credit from Mark’s account to $500 Open Invoice of Martha’s account.

One easy way to handle transfer credit from one customer to another customer is to write a Journal Entry in QBO.

Click on the screenshots below to enlarge them

 

To create a Journal Entry

From the home page screen, click Create+ sign

• Click Journal Entry tab under Other heading.
• Enter the date.
• On the first line, from the Account drop down list, select Accounts Receivable (A/R).
• In the Debit field, enter the unapplied amount being transferred. Example:$500.
• In the Memo field, note the reason for the Journal Entry. Example: credit transfer to Martha’s account.
• From the Name drop down list, select the customer name that credit is being transferred from. Example: Mark
• On the second line, from the Account drop down list, select Accounts Receivable (A/R) again.
• In the Credit field, enter the credit amount (same as debit amount). Example:$500
• In the Memo field, note the reason for the Journal Entry. Example: credit transfer from Mark’s account.
• From the Name drop down list, select the name of the customer that the credit is being transferred to. Example: Martha
• Click Save.

 

The final step is to Receive Payment on both customer accounts so that it will show “Paid and Closed” customer status

From the home page screen, click Create+ sign

• Go to the Customers tab and click Receive Payment.
• Select the customer (example: Mark).
• Make sure that the credit and Journal Entry are checked at the left (make no other entry on the Receive Payment form.)
• Make sure “Amount received” show zero amount.
• Click Save.

Follow the same “Receive Payment” steps as above for the customer (Martha).

Receive Payment (Customer Mark)

Receive Payment (Customer Martha)

Customer Mark’s Page with Paid and Closed Status

Customer Martha’s Page with Paid and Closed Status

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#QuickBooks Online