Uncategorized Income transactions in QBO
Uncategorized income, if it was populated via an invoice using an improperly set up item, can make your ears go back like my friend to the right. The fix can be super time consuming and not an easy task. As I mentioned in this older post, the only way to update is to fix the item and "refresh" each invoice. Yes, one at a time. Imagine if you had an entire year's worth of invoices that point to the wrong income account. Much like my recent customer, it is a tedious task indeed.
Fixing uncategorized income: What the heck is that account even for???
Uncategorized income is an account made up by Intuit (QuickBooks) for the bank feed process. For example, have you ever just clicked away and entered a bunch of banking transaction from the bank feed window? Without opening them or checking out where they go? C'mon, we all have done that, right? Well that account is in place to automatically be assigned to a transaction that had no income account entered. By default, the QuickBooks program assigns this account as well as it's sister account, "uncategorized expense" for any expense or check entries that had no account entered. Sometimes QuickBooks also "guesses" using that account. Or even worse, it uses transfer to "uncategorized asset", which can make an even bigger mess to fix.
Using the tool in Quickbooks Online Accountant version for faster cleanup....
As accountant's we get a special set of tools to do our job. They are all easily accessed in the accountant's briefcase within our program. I use this tool constantly! It is my "go to" function when I review my client's records at month or quarter end. If I find transactions in the wrong categories, I can quickly fix them. But if the problem is item based, ie, an item was not set up properly, the only way to fix it is to refresh the old invoices or a journal entry to sweep the totals into the correct category. Both methods are demonstrated in the video.
A key to the codes you see in the reclassify tool....
|●||Filled green circle||Account and Class can be changed|
|◒||Yellow half circle||Only Class can be changed|
|○||Empty red circle||Transaction cannot be changed|
Other transactions that cannot be changed....
- Item based transactions (Invoices, Sales Receipts, Checks and/or Bills with items).
- Sales Tax transactions (tax payments and tax adjustments are controlled by tax settings)
- Inventory Adjustments (Inventory adjustments always affect inventory shrinkage and Inventory asset accounts)
- Billable Expense transactions income side (company settings for billable expense income controls)
- Payroll transactions (payroll settings control this accounting)
- On Item based transactions, we can reclassify Classes but not Accounts.
I hope this video was helpful in how to update your invoices or create the journal entry required (if you had a ton of invoices to update). If you have any questions or would like to see a future video on another topic, please reach out to me on Facebook.