You know you have invoiced, received the payments, and deposited the money but, when you go into the “Record Deposits” form; you get a long list of customer payments to be deposited. You review a couple of deposits you recorded and see that the “From Account” recorded was the income account.
What has occurred is that, rather than cleared the undeposited funds to the bank account, you have recorded a double entry to income. Here’s an easy fix to clear the payments to be deposited and the duplicated entries to income.
First, create a new “bank” account and name it “Clearing”. The open the “record deposits” form and select all customer payments to be deposited that you know have already been recorded as deposited. Select the “Clearing” as the deposit to account as shown below.
Click “Save and Close” to record the deposit. This will clear the customer payments to the clearing account we set up. Finally from the QuickBooks main menu at the top of the screen select Company/Make General Journal Entries. This entry will zero out the clearing account and remove the duplicate entries to Sales income. It will credit the clearing account and debit income for the balance in the clearing account. The entry is shown below.
When you are done, make the clearing account inactive so you don’t accidently record transactions to it.
It‘s important to note that the come will be corrected at a summary level but not by customer. If you want to correct income at a customer level you will need to record a single line debit to the income account for each customer payment.
Robert Guild designs specialized reports and automated analysis tools for QuickBooks clients to make decisions they can trust. He is a member of Intuit DeveloperNet and an Advanced Certified QuickBooks ProAdvisor. Visit www.ReportsUWant.com to see pre-designed analysis tools ready to buy or contact him about developing applications for your specific needs at rguild@ReportsUWant.com. You can also follow him on twitter at QBPro