Accounts Receivable and QuickBooks Online
Accounts Receivable can be a bit confusing. When someone is new to bookkeeping, it can make quite a mess of your records. Especially if you do not follow the appropriate steps. Just like putting two pieces of the puzzle together, it is important to create the invoice and enter the customer payment.
The pain point in this process tends to be the bank feed. People cannot seem wait to go to the bank feed window and clear out the list. I see it all the time. This sometimes creates entries to uncategorized income. Many times I will look at someone's records and see they have a ton of outstanding invoices. Yet their customer's have paid them. This happens when they just downloaded the payments from the bank feed into QuickBooks Online directly. Even though they created an invoice. Often, my customer will tell me that they couldn't get the bank feed to match the transaction in QuickBooks. So they just accepted the bank feed because they knew it was "accurate".
Below you will find a short video that will take you through the process of handling accounts receivable in QBO and in QuickBooks Desktop. It is important to follow the following steps:
- Enter the invoice for your customer (or sales receipt). Make sure you have items set up that point to your income account. Use those in your invoicing.
- With an invoice transaction, you MUST receive the customer payment to clear it. Select it to go to your bank account directly or to undeposited funds, if it is to be grouped with other customer payments.
- If you did select to put several checks together to the bank, you need to then go to + deposit and select them to group them. The total must match the total on your bank slip.
- Then a few days later when the bank sends in the transaction via the online bank feed, you match it. A few things to remember that may trip you up with matching: 1. Be sure the date of the transaction (payment or deposit) is accurate. 2. Make sure the total deposit amount is correct.
If you follow the above steps, everything should run beautifully. Your accounts receivable will be correct and your bank feed transactions will match.
See this other post on how to set up items for invoicing. To request a future video or ask specific questions on this topic or any other topic QuickBooks related, please send me a message on Facebook.