Discover the Best Sales Receipt Sample for R&D with airSlate SignNow

Sales receipt sample for R&D

hey everyone it's AJ Stockwell and in this video I'm going to talk through another common Pitfall that I see in QuickBooks which is when people do not apply payments to invoices properly and there are a few different ways that this can happen and it can also apply to both customer invoices and vendor bills or vendor invoices so whether it's accounts receivable or accounts payable I often see that on both sides people are not recording these payments correctly and at best it can lead to somewhat messy books because you have these open transactions and loose ends but at worst it can lead to misstatements on your financial statements because you can be recording extra Revenue extra expense or inventory and things like that there are a handful of different examples that I'm going to go through and show you so let's jump right over to QuickBooks so the first thing that I want to look at is the accounts receivable aging summary and there are a few different ways to get there we can go to reports we can also just search up here I'm going to type AR and I'm going to open AR aging summary now we see a few things here we have three customers listed and two of them have a zero total balance this one even just has a zero balance in the 1 to 30 days section now as a quick overview of the accounts receivable aging summary and AP aging summary if you're not already familiar basically what this shows you is if your customers have past due invoices and how past do they are so if we had current invoices outstanding that means that they are not yet past due we would see those amounts in here and then we have these columns for 1 to 30 days past due 31 to 60 days past due Etc so it just lumps our open invoices into certain buckets ing to how past due they are or not now let's talk about this one that has zero open balance and doesn't have a balance in any of these time periods except for this zero dollars that's in here we see that we can actually click this and go into it and when we look in this we see we have a customer invoice and we have a customer payment so that's why the balance is zero but why is it showing up here if a customer doesn't have any open balance we don't need to see them in the Aging report so I'm going to go back to that and I'm going to click on the payment and what we see when we open this is there is a two hundred dollar payment that's being recorded as received but it's not being applied we see that there's a two hundred dollar credit amount that's being left here so this is effectively just creating a credit on the customer's account the effect of this is that the invoice is still open but the payment is also in here as a credit and it's open and because those net to zero technically there's zero balance but this period has activity that's not closed out so that's why it's still showing on the AR aging report if we go to this customer's page we see Zero open balance but when we click in there what we end up seeing is that they have a two hundred dollar overdue balance or overdue invoice and if we look at the status within here we see overdue invoice and unapplied payment the fix for this and I'm gonna go back to they are aging first the fix for this is to click on the payment and now select the invoice that this 200 is paying so now we see 200 payment applied I'll go ahead and save and close and now both of those are cleared out of the AR aging and if we go back to the main report that web customer is no longer listed in here because that payment has been applied correctly now the next one and this is very similar is this John Smith so this is going to be the same issue but what happened here is the invoice is aging longer than the period that we recorded the payment as coming in so to fix that it's the exact same thing we go into the payment and we match it to the corresponding invoice we go ahead and save and close now those are cleared out we go back to the AR aging summary and we see that we only have this one customer left with an open balance but we see that it's 31 to 60 days past due and we think hmm that's kind of weird we'll click in there we see that it is just one individual invoice for 2100 but we're pretty sure that we received payment for that so what's going on why is this invoice still open I don't see any payment received I'll go to the customers page and there's no payment here but I know that I got that payment from the customer so what I might do is go look at my banking activity and I might do that by looking at the bank register for my main checking account and what I see here is I see a deposit for the amount of that invoice see twenty one hundred dollars deposit but it's manually posted to income it doesn't have a customer's name on it or anything like that it doesn't really have any information and this is where we went wrong this is something that I see very commonly and it's a really important Pitfall to make sure that you don't fall into because what this is doing is duplicating Revenue a lot of businesses who do this their tax accountant might not catch that this is being done and you could end up paying taxes on additional income that isn't valid so to illustrate this I'm going to go to this p l report so here is a monthly p l for April and May and you see that in April we have forty two hundred dollars of Design Services income recorded and if I click in there what I see is we have this manual deposit for 2100 and then we also have that customer invoice because the customer invoice is recording Revenue when we create an invoice for a customer generally it's posting to revenue because that's where we have this Web Design Services item post this means that we are duplicating this income and we are way overstating our income for that month so what is the best way to address this one solution would be to just delete this deposit and record the payment and record it as being deposited and that's a perfectly fine solution especially if you have not yet reconciled your bank account if you've already reconciled your bank account for this April period Then deleting this deposit will throw off that reconciliation so I want to try to fix this deposit issue this duplicate Revenue issue without deleting the deposit and throwing off the bank reconciliation although if you look under this cleared column we see that these transactions are not yet reconciled what I'm going to do is go ahead and record receiving a payment from that customer and if you've already reviewed my videos about undeposited funds or now it's recently been renamed payments to deposit then you know there are generally three steps that money flows through in the customer invoicing process which is first you create the invoice then you receive the payment and then you record the payment as being deposited I'm going to go ahead and receive payment for this customer it's going to go into payments to deposit I'm going to record it as of that same date and then I'll go ahead and save and close so now if I quickly jump to this other tab where I had an AR aging and I refresh it you'll see that we no longer have any AR aging now going back to the bank register I'm going to open up this deposit and edit it and we see our 2100 payment there so what I want to do is Select that payment and delete this manual line item so this is a payment to be deposited and what we're doing here is indicating that we've now deposited it to the bank now I'll go ahead and save and close and that deposit is now updated if I go look at the p l and I'll refresh this we see now that only 2100 of income is recorded here and that's correct that's going to just be that customer's invoice we're no longer duplicating that Revenue by recording their payment deposit as a separate Revenue item in the next video I'm going to show this same process for vendor payments being applied to bills because there are similar pitfalls that can happen there and we want to make sure that we are applying those payments correctly if you aren't clear what I was talking about regarding accounts receivable and recording payments against invoices in that process make sure to check out my other videos about undeposited funds and making sure that those are recorded properly I'll link to them right here thanks for watching the video if it was helpful please make sure to give it a thumbs up which will help more people see it and don't forget to subscribe to the channel and turn on notifications