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Customers/Clients & A/R

What’s the New Paid Stamp For QuickBooks 2011?

Chief Mechanic · September 19, 2010 ·

For QuickBooks 2011, Intuit improved the Paid stamp to reflect the date the customer invoice was paid, as shown in the screenshot below.

QuickBooks 2011 Create Invoices Window With Date Paid Stamp

Unfortunately, a Paid stamp is also applied to vendor bills, and that stamp does not reflect the date the bill was paid.

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What Is the New History Tab In QuickBooks 2011?

Chief Mechanic · September 19, 2010 ·

For QuickBooks 2011 and Enterprise Solutions 11.0, Intuit added a History tab to several key windows in QuickBooks:

  • Enter Bills
  • Create Purchase Orders
  • Create Item Receipts
  • Create Invoices
  • Create Credit Memos/Refunds
  • Enter Sales Receipts

Unfortunately, it’s not included on the Receive Payments window.

The History tab can be quickly opened and closed, and shows a Summary, Recent Transactions, and Notes for the vendor or customer.

Here’s the History tab in its closed state. To open it, just click on the left-pointing arrow.

QuickBooks 2011 Enter Bills History Tab Closed

With the tab open, you can close it by clicking on the right-pointing arrow.

QuickBooks 2011 Enter Bills History Tab

Each History tab contains intelligent links to functions that allow you to edit the displayed entity, edit notes, and prepare pre-filtered reports. For example, the Open Balance link in the Enter Bills window opens a pre-filtered Vendor Open Balance report, which is a modified Unpaid Bills Detail report for the currently displayed vendor.

By providing an easy way to display recent activity during transaction entry, the History tab will help to reduce the chance of erroneously recording a duplicate transaction.

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How Can I Close Transactions With a Customer Who Is Also a Vendor Who Only Paid the Net Balance On an Invoice?

Chief Mechanic · September 13, 2010 ·

For some businesses, another firm is both a customer and a vendor.  If you’ve invoiced that firm (as a customer) while they have billed your company as a vendor, they may opt to pay the net amount owed for simplicity and to preserve their own cash balance.  In that case, you’ll need to find a way to process the net payment and at the same time close both the customer invoice and the vendor bill.

In QuickBooks, there are 2 methods to accomplish this:

  1. Use a clearing Bank account
  2. Use General Journal entries

We favor the second method because it’s more consistent with normal workflow and it more fully documents the transactions recorded.  To mirror Intuit’s own discussion of these methods in their knowledge base article on this topic, we’ll follow their example transaction, where your firm has invoiced a customer/vendor for $100, and that customer/vendor has billed your company $75.  We’ve given this customer/vendor a name, Newco Llc.  QuickBooks doesn’t permit identical names in lists.  For that reason and to better distinguish between the customer account and the vendor account, we’ve appended “(customer)” and “(vendor)” to the company’s name.

Method 1 – Use a Clearing Bank Account

This method involves creation of a clearing account (if you don’t already have one set up) and recording the vendor credit through the Make Deposits function.  Screen shots that illustrate what takes place in important steps follow the description of the steps.

  1. Create a new Bank type account, which in our example is named Clearing Bank Account
  2. Receive the payment from your customer/vendor to pay the customer/vendor’s outstanding invoice in full, which in our example is a payment of $100, and select Undeposited Funds as the Deposit To account if it’s not already set to that by default
  3. Click on the Banking->Make Deposits menu selection and select the payment you recorded in Step 2 in the Payments to Deposit window and click Ok
  4. In the Make Deposits window, add a new line item and enter the customer/vendor’s vendor account in the Received From field, your Accounts Payable account in the From Account field, and the amount of the vendor bill that the customer/vendor deducted from his payment as a negative number, which in our example is -75
  5. Add a second new line item and enter the customer/vendor’s customer account in the Received From field, the bank account to which you’ll deposit the customer/vendor’s net payment, and the amount of the net payment as a negative number, which in our example is -25
  6. Set the Deposit To account to the clearing account created in Step 1, which in our example is the Clearing Bank Account and click Save & Close or Save & New to record the net deposit
  7. Click the Vendors->Pay Bills menu selection and select the customer/vendor’s bill to be paid
  8. Once the bill is selected, click the Set Credits button, choose the vendor credit that you created in Step 4, and click Done to return to the Pay Bills window
  9. Set the Account from which to issue the payment to the clearing account, which in our example is the Clearing Bank Account, and click the Pay Selected Bills button
  10. QuickBooks will display the Payment Summary window, advising you that the bill was paid by a credit only, so it won’t be associated with a bill payment check; click Done to complete paying the vendor bill

In a typical use of the Make Deposits function where there is 1 entry for the deposit amount from Undeposited Funds as a positive number, QuickBooks credits (reduces) Undeposited Funds and debits (increases) the bank account selected in the Deposit To field.  Positive amounts on the Make Deposits window represent credits; negative amounts represent debits.  Thus, Accounts Payable is debited (reduced) by the amount of the vendor bill that the customer/vendor deducted from his payment, and the regular bank account is debited (increased) by the amount of the net payment received from the customer/vendor.  Intuit incorrectly describes the entry made in Step 5 as a credit; it’s not – it’s a negative amount, so it’s a debit.

After completing Step 6 above, you’ve recorded the net amount of the deposit to your regular bank account.  Note that the Deposit Subtotal made to the clearing account is 0.00, reflecting its purpose to serve purely as a clearing account to close transactions.  QuickBooks will not allow setting the From Account to your Undeposited Funds account when recording the net amount being deposited in Step 5.  If you combine this deposit item with others, you’ll complicate reconciling your regular bank account.  That’s why it’s a good idea to make each customer/vendor transaction processed through the clearing account a separate deposit.  The need to separate deposits is one limitation of the clearing account method.

QuickBooks Premier 2009 Clearing Bank Account Make Deposit
QuickBooks Premier 2009 Clearing Bank Account Checking

After selecting the vendor bill in Step 7, you’ll be able to apply the credit that you created in Step 4 by clicking the Set Credits button.

QuickBooks Premier 2009 Clearing Bank Account Pay Bills 1

In the Discounts and Credits window, select the credit.

QuickBooks Premier 2009 Clearing Bank Account Discounts

After selecting the credit, there are no other credits available.  The total of the bills to be paid is 0.00.

QuickBooks Premier 2009 Clearing Bank Account Pay Bills 2

As described in Step 10, QuickBooks will display the Payment Summary window.  However, because the bill was paid entirely by a credit, it won’t be associated with a bill payment check, even one with a zero amount.  The vendor’s balance will be reduced by the amount of the payment and the bill will be marked Paid, but there won’t be a transaction recording the payment in the vendor’s transaction list in Vendor Center.  The fact that the transaction list in Vendor Center presents an incomplete record of what was recorded is another limitation of the clearing account method.

QuickBooks Premier 2009 Clearing Bank Account Payment Summary

Because there’s no bill payment check to delete or void, if you want to undo this process, you’ll need to start by deleting the deposit from the clearing account.  That will leave funds in the Undeposited Funds account and return the vendor bill to an unpaid or open status.

Method 2 – Use General Journal Entries

This method involves making 2 General Journal entries and then processing the customer/vendor’s net payment in your normal workflow.  Screen shots that illustrate what takes place in important steps follow the description of the steps.

  1. Click on the Company->Make General Journal Entries… menu selection and record a debit (decrease) to Accounts Payable for the amount of the vendor bill that the vendor/customer deducted from his payment, which in our case is $75; in the Name field for the debit, enter the vendor account name
  2. On the same General Journal entry, enter a credit for an equal amount to another account, such as the expense account used on the vendor bill, and click the Save & New button
  3. Enter a second General Journal entry with a credit for $75 to Accounts Receivable, and in the Name field for the credit, enter the customer account name
  4. On the same General Journal entry, enter a debit for $75 to the same account you used in Step 2 and click the Save & Close button
  5. Click on the Customers->Receive Payments menu selection and enter the customer account name in the Received From field; after doing so, you’ll see the message that this customer has available credits
  6. Click the Discounts & Credits… button to apply these credits
  7. In the Discounts & Credits window that appears, select the credit for $75 that you recorded in Step 3 and click the Done button to return to the Receive Payments window
  8. Select the customer invoice being paid and enter the net amount paid by the customer/vendor, along with other payment information such as the Pmt. Method and Check #
  9. Click Save & Close or Save & New to record the customer payment

The account you enter in Steps 2 and 4 doesn’t matter as long as it’s the same account, because the debits and credits reverse each other.  In fact, if you already have a clearing account set up, you can simply use that clearing account in these steps.  These 2 General Journal entries are an effort to post a debit to Accounts Payable and a credit to Accounts Receivable.  Because QuickBooks imposes a restriction that only 1 Accounts Payable or Accounts Receivable account can appear on a General Journal entry, it’s necessary to make 2 entries.

Here are the 2 General Journal entries:

QuickBooks Premier 2009 Vendor Customer 1
QuickBooks Premier 2009 Vendor Customer 2

Here’s the process at Step 5:

QuickBooks Premier 2009 Vendor Customer 3
QuickBooks Premier 2009 Vendor Customer 4

And finally, here’s our completed Receive Payments screen just before saving the transaction:

QuickBooks Premier 2009 Vendor Customer 5

We favor the second method – using General Journal entries – for 2 reasons.  First, after completing these steps, you can process the customer/vendor’s check with other checks in your Undeposited Funds account as you normally would.  You won’t need to make a separate deposit for each payment from a customer/vendor in order to maintain your bank reconciliation process as you would if you used the clearing account method.  Second, because General Journal entries appear on the transaction list in both the Customer Center and Vendor Center, you’ll have a well-documented trail of what took place.  On the vendor account, you’ll see a bill for $75 and a General Journal debit for $75 that pays the bill; on the customer account, you’ll see the $100 invoice, the $75 General Journal credit that reduced the amount owed, and the $25 payment.  In contrast, in the clearing account method, you’ll only see the vendor bill marked Paid.  You won’t see the transaction that actually paid the vendor bill, which can lead to confusion after the details of how the transaction was recorded are forgotten.

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What Are the Differences Between A/R Reports In a Multicurrency Environment?

Chief Mechanic · September 13, 2010 ·

In QuickBooks 2009 there are 6 reports to provide information about what customers or clients owe to a firm.  They are:

  1. A/R Aging Summary
  2. A/R Aging Detail
  3. Customer Balance Summary
  4. Customer Balance Detail
  5. Open Invoices
  6. Collections Report

These reports are found on the Reports->Customers & Receivables menu selection.  Each report is intended to provide certain information, and in a multicurrency environment the information reported may appear to contradict information on financial statements, such as a firm’s balance sheet.  The contradiction is only apparent, because by design some of these reports do not include transactions that are included in balance sheet accounts, such as General Journal entries from home currency adjustments.

In the example reports that follow, the company’s balance sheet shows a balance for Accounts Receivable – EUR (the A/R account for the 1 customer reported) of $17,500.  This balance consists of a $15,000 invoice and a $2,500 exchange gain recorded as a home currency adjustment.  Home currency adjustments are recorded as General Journal entries.  For simplicity, we’ve filtered these reports to show a single customer.  When comparing the totals on these reports to amounts reported on a balance sheet, it’s important that filter settings for the report match the balance sheet date and include all relevant transactions for a balance sheet A/R account.  However, even when filters are set appropriately, the totals on these reports may not match the balance sheet because of filters that are embedded in the reports themselves that restrict the types of customer transactions reported.  These embedded filters are part of the report design and can’t be changed.

The A/R Aging Summary and A/R Aging Detail reports show unpaid invoices and statement charges by billing period but do not include General Journal entries.  Therefore, these reports do not match the amount reported on the balance sheet.

QuickBooks Premier 2009 Multicurrency A/R Aging Summary
QuickBooks Premier 2009 Multicurrency A/R Aging Detail

The Customer Balance Summary and Customer Balance Detail reports show all transactions related to customers.  The detail report is grouped by customer and job, where the Amount column is the original transaction amount and the Balance column is the open or unpaid amount.  Because these reports show all customer transactions, they will include currency adjustments posted to a customer’s account as General Journal entries.  Therefore, the total shown on these reports does match the balance sheet.

QuickBooks Premier 2009 Multicurrency Customer Balance Detail Summary Report
QuickBooks Premier 2009 Multicurrency Customer Balance Detail Report

The Open Invoices report lists unpaid invoices and statement charges, grouped and subtotaled by customer and job, but it does not include General Journal entries from currency adjustments.  Therefore, the total shown on this report does not match the balance sheet.

QuickBooks Premier 2009 Multicurrency Open Invoices Report

The Collections Report lists overdue invoices and statement charges grouped by customer and job, along with the customer’s contact name and phone number.  Because this report only includes invoices and statement charges, it will not include currency adjustments posted to the customer’s account as General Journal entries.  Therefore, the total shown on this report does not match the balance sheet.

QuickBooks Premier 2009 Multicurrency Collections Report

If your goal is to produce detail or summary reports to substantiate the amounts reported on a firm’s balance sheet, either the Customer Balance Summary or Customer Balance Detail report is the best choice, because it includes all transactions and doesn’t exclude General Journal entries.  In a multicurrency environment, where General Journal entries are common, other reports may appear to contradict the balance sheet amounts because they do not include these General Journal entries.

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Why Are Items On Sales Orders Marked Closed Before Invoicing On a Partially Fulfilled Sales Order?

Chief Mechanic · September 13, 2010 ·

In QuickBooks 2009 for releases prior to R6, there was a bug (which has since been fixed) where undelivered items on a sales order that had previously been partially fulfilled had been incorrectly marked closed and could not be unchecked to be invoiced.  This bug is discussed in this Intuit knowledge base article.

The bug only affects Sales Orders or Estimates that have partially invoiced line items where Unit of Measure has been enabled or where the Sales Order or Estimate contains a Group Item (with or without Unit of Measure enabled).  For more information see our articles on the Unit of Measure preference and Group Items.

This bug has been corrected in the R6 release.  Although the bug itself has been corrected, you may have previously entered Sales Orders or Estimates affected by the bug that will need to be fixed.

To correct the problems created by this bug, complete these steps:

  1. Update QuickBooks to the R6 or later release
  2. Run the Verify utility
  3. Identify any incorrectly closed transactions
  4. Repair those transactions
  5. Rebuild
  6. Re-run the Verify utility

Step 1 – Update QuickBooks to the R6 or Later Release

See our article for more information on updating your QuickBooks release.

Step 2 – Run the Verify Data Utility

To run the Verify Data utility, click the File->Utilities->Verify Data menu selection.  See our article for more information on running the Verify Data utility.  You’ll need to identify and correct any incorrectly closed transactions if the Verify Data utility displays this warning:

Some Sales Orders or Estimates may be incorrectly marked as closed or display incorrect invoiced quantities.

This procedure is discussed in this Intuit knowledge base article.

Step 3 – Identify Any Incorrectly Closed Transactions

If the Verify Data utility indicates that transactions were incorrectly closed, proceed to identify the affected transactions.  Open the QBWin.log file in a text editor and search for Invalid Received/Invoiced Flag.  Make a list of the Doc# for each affected Sales Order or Estimate.  This procedure is discussed in this Intuit knowledge base article.

Step 4 – Repair the Affected Transactions

Using the list prepared in Step 3, find the first affected Sales Order or Estimate.  To find a Sales Order, open the Create Sales Order window by clicking on the Customers->Create Sales Orders menu selection.  Then, click the Find button and enter the first S. O. No. to be repaired.

QuickBooks Premier 2009 Create Sales Order Find

The procedure to find an Estimate is similar to that for finding a Sales Order except it starts from by clicking on the Customers->Create Estimates menu selection.

On a new blank line after the last line on the Sales Order or Estimate, enter any text at least 3 characters in length in the Description field.  Save your changes by clicking the Save & New button and repeat these steps for each affected Sales Order or Estimate on the list prepared in Step 3.  When you’ve repaired the last Sales Order or Estimate, you can click the Save & Close button.  This procedure is discussed in this Intuit knowledge base article.

Step 5 – Run the Rebuild Data Utility

Run the Rebuild Data utility by clicking on the File->Utilities->Rebuild Data menu selection.  See our article on running the Rebuild Data utility for more information.

Step 6 – Re-run the Verify Data Utility

To confirm that these steps have corrected the problem, re-run the Verify Data utility as described in Step 2 above.  If the Verify Data procedure displays the warning discussed above, repeat Steps 3 through 6.  If no warning appears, proceed to run inventory and sales reports to confirm that inventory data is now correct.

Prior to the availability of the R6 release, Intuit posted a description of this problem on its Wiki.  See FAQ 14.

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