How to cleanup Unapplied Cash Payment Income & Expenses in QuickBooks Online

In this video, I'll talk about how to clean up Unapplied Cash Payment Income and Expense in QuickBooks Online.
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[@nickgardner6146]

OMG ! No one at QB's customer service knew what I needed, one video here and problem all gone, Fantastic teacher, Thank you

[@5MinuteBookkeeping]

Glad to help!

[@angeladavis9272]

I had looked at countless articles and couldn’t figure it out. I didn’t even realize the dates were off. Not one article discussed that. Thanks so much for your video. I finally got my account corrected.

[@5MinuteBookkeeping]

Glad I could help!

[@SeanFarrington]

What a simple solution! Changing dates of the invoice. Thanks for showing me how to clear that up. Very helpful.

[@5MinuteBookkeeping]

Glad it was helpful!

[@emilyjohnson8763]

So helpful! I have been having issues with this for months. Feels great to get it off my to-do list.

[@5MinuteBookkeeping]

Glad it was helpful!

[@sarakh3928]

Perfect. Exactly what I needed. Many Thanks.

[@5MinuteBookkeeping]

You're welcome!

[@gloriamartstudio]

This is so helpful thank you

[@5MinuteBookkeeping]

Glad it was helpful, Gloria!

[@rishabhjain3594]

Very helpful! Thank you!

[@5MinuteBookkeeping]

You're welcome!

[@joanharder2124]

Very clear - thank you!

[@5MinuteBookkeeping]

You're welcome.

[@gilyanabambueva5029]

Thank you so much!

[@5MinuteBookkeeping]

You're welcome!

[@bremoravec8954]

Thank you!!

[@5MinuteBookkeeping]

You're welcome!

[@alicjaszafranski7185]

Thank you for this video. Very helpful. I had a problem applying payment to the invoice because the service in the invoice wasn't connected to the Income account!

[@5MinuteBookkeeping]

You're welcome.

[@DivinityGroup]

You are awesome I was able to change the invoice and boom chacka Locka it was fixed. This video is awesome....:)

[@5MinuteBookkeeping]

Glad I could help.

[@israelalvarado9720]

Amazing

[@5MinuteBookkeeping]

Thank you!

[@israelalvarado9720]

I commented , I liked and I subscribed.

[@5MinuteBookkeeping]

Thank you so much!

[@jewelisleta]

Thank you! Your videos helped a lot. Question, what if the unapplied expense that exist is an expense type not invoice nor payment. What is the right way to check and resolve it?

[@5MinuteBookkeeping]

If you see an amount in Unapplied Cash Bill Payment Expense, you need to look for a Vendor Bill or Bill Payment. Normally the Bill Payment is dated before the Vendor Bill.

[@jewelisleta]

Thank you. I checked and no bill was entered related to that expense. But I'm also not sure because I'm thinking if this for a bulk bills.

[@COreliableElectric]

How will this effect the sales tax? For example, we received the deposit for a job at the end of Q3. We invoiced in Q4, if I change the invoice date to a Q3, that would affect our sales tax reporting for the quarter.

[@5MinuteBookkeeping]

Yes it would. You would need to follow a different method for recording an invoice for the deposit.

[@dannymendez7474]

Thank you for the video, however I do have a question. What if the payment is reconciled already?

[@5MinuteBookkeeping]

I believe I say in the video that you would want to change the date of an invoice (or vendor Bill) and not the date of the payment. You would not want to change the date of the payment.

[@kellisizemore1478]

Veronica, this was very helpful, however, what if the payment was in the year prior and the year has been closed and reported to the IRS already? For example: the payment to the vendor in 2020 was $89 over the invoice and now that over payment has been applied to an invoice in 2021.

[@5MinuteBookkeeping]

If the transactions are in separate years, unfortunately, there is no way to clean up the Unapplied balances in QBO. Normally, we leave those transactions on the books since they can't be removed.

[@user-km6kh9hi9y]

Issue a credit memo and apply on invoice. It will bring the invoice to zero.

[@clairserkland9350]

What if changing the date doesn't work at all. Ex: customer makes a payment, that payment is returned NSF, so I followed instructions from QBO to create a check and apply those payments to that check and when I change all the dates to match, it's still there. Any help would be GREATLY appreciated.

[@5MinuteBookkeeping]

I am not familiar with the instructions provided by QuickBooks, so I can't provide any insights on this.

[@israelalvarado9720]

What happens if you see invoice under I applied cash payments but not deposits to match those to?

[@5MinuteBookkeeping]

The customer payment is likely entered in another period or perhaps entered in the prior year.

[@romagen6]

Hi Veronica, I've cleaned up the Unapplied Cash Payment Income report for the most part. What remains is a pair of transactions with the same date: "Payment" (overpayment by customer) and "Check" (refund check issued by the business); the payment is applied to the check. Why are they still showing on the report, and how can I clean them up? Thank you in advance for your expertise.

[@5MinuteBookkeeping]

They are still showing up in unapplied because they are 2 different types of transactions. If they net to 0 in the same year, I would not do anything further.

[@user-pu6xe5pt1j]

How to fix Unapplied cash income without invoice date changes? Its possible to make in QB...plz given your advice

[@5MinuteBookkeeping]

The only way to fix it is to change the invoice date. As an alternative, you could enter a invoice to a deferred revenue account and record the amount received as a "deposit" from a customer.

[@user-pm6vq9sv3z]

I have done this. The one question I have is why does the total amount of the unapplied cash payments reflect once the transactions are cleared?

[@5MinuteBookkeeping]

Hi. Could you be more specific? Where are the transactions being cleared?

[@chucktrotter9699]

5.21.21 I liked the video however the print was very small and hard to read. Thanks for the explanation.

[@5MinuteBookkeeping]

Hi Chuck. Perhaps you're watching on your phone, if so, yes the print is small. You may want to watch on a larger device or on your computer.

[@chucktrotter9699]

@@5MinuteBookkeeping 5.22.21 I was watching on my desktop 32" screen in HD.

[@5MinuteBookkeeping]

@@chucktrotter9699 Thanks for the feedback.

[@mrsc9193]

This video was so helpful thank you! I have a question I was hoping you could help me with. I had a customer over pay amd we had to give a partial refund for the over payment amount. Everything I know says to create either an expense or a check for the refund. I have done that but the expense (refund) and the original over payment are still showing in Unapplied Cash Payment Income. The customer's account is $0 the month was reconciled with no issues. Do you have any advice on why the transacrions are still showing as unapplied?

[@5MinuteBookkeeping]

It sounds like the customer overpayment and the Expense are not applied to each other. You might see if you can apply them to each other in the Customer Payment screen.

[@mrsc9193]

@@5MinuteBookkeeping Thank you. It was actually that the payment processing company had already corrected the transaction amount and the business owner went in and changed the $$ amounts in QBO. Once I realized the amount discrepancy I was able to correct the amount and there was no need for a reimbursement transaction in QBO. 🤦‍♀️

[@5MinuteBookkeeping]

@@mrsc9193 Glad you figured it out.

[@user-ho2hg6uq9l]

I have a journal entry, negative balance in there... how do I satisfy this? Please!

[@5MinuteBookkeeping]

Hi. I don't have enough details to be able to answer your question.

[@relaxedclub9425]

What report period did you run the reports at?

[@5MinuteBookkeeping]

I'm not sure that I understand your question. Can you be more specific?

[@sarahchan8658]

Hi Veronica, What if I entered the transactions in Journal entry? How do I match the Unapplied Cash Billpayment expense with the Journal entry? I tried to click "Add" after I found the matching transaction, but it didn't do anything. Can you help with this?

[@5MinuteBookkeeping]

Hi Sarah, you can't use a journal entry to fix Unapplied transactions in QBO. Unapplied transactions are cash basis only. Journal entries affect both cash basis and accrual basis.

[@sarahchan8658]

@@5MinuteBookkeeping Thanks for your reply, It was entered as a Journal entry from the beginning. Now, I need to match the unapplied cash billpayment to the correspondent journal entry to clean it up. Correct?

[@5MinuteBookkeeping]

@@sarahchan8658 I believe we are talking about two different things. Unapplied Cash Bill Payment is the name of an account used by QBO to balance itself on a cash basis. Can you specify what types of transactions you are referring to and can you use the transaction names used in QBO so that I can answer your question?

[@jyotipatel1319]

I have unapplied cash payment income transaction type is deposit so please navigate me how to clean up.

[@5MinuteBookkeeping]

Hi. I can't help you since I don't have enough details as to why that amount is in Unapplied cash payment income. I tried to explain the various reasons why you see Unapplied cash payment income in the video.

[@BlazingStarEnergycom]

Thank you for this. No books I have showed this 😊

[@5MinuteBookkeeping]

You're welcome.