How to Delete Unapplied Payments in QuickBooks?

QuickBooks is an essential tool for bookkeepers, especially when dealing with customers who make payment entries without applying them to their accounts payable. This guide provides a comprehensive overview of unapplied payments in QuickBooks and outlines the steps to delete them.

What are Unapplied Payments in QuickBooks?

Unapplied payments occur when a payment is received but not attached to a specific invoice. For accountants, this happens when a client enters a payment without applying it to their accounts payable.

Why Does QuickBooks Display Unapplied Payments?

QuickBooks may show unapplied payments even when credit memos, journal entries, and other payments are in place. This can happen due to:

1. Credit memos not linked to specific invoices
2. Unlinked journal entries
3. Other payments not connected to particular invoices

To avoid this, always link invoices with credit memos, journal entries, and other payments.

How to Delete Unapplied Payments in QuickBooks

After removing the invoice for which the unapplied payment was made and creating a sales receipt for the payment, follow these steps:

1. Open QuickBooks desktop
2. Go to the Sales menu
3. Select the Customers tab
4. Choose the customer name for which the payment needs deletion
5. Find the Transaction List tab
6. Click on Payments
7. Click the More option at the bottom of the page
8. Select Delete and confirm by clicking Yes

Applying Unapplied Payments in QuickBooks

To apply an unapplied payment, you need to create an invoice:

1. Under Customers, create an invoice
2. Enter all required details to match the invoice and unapplied payment
3. Click Save
4. Select Receive Payments from the top right corner
5. Locate the Credit section
6. Click on Unapplied Payment
7. Save changes and click Close

Handling Unapplied Payments After Fixing

Once you’ve found and fixed unapplied payments:

1. Run the report where these payments might be causing issues
2. Check for any problems in the report associated with unapplied payments
3. Address any other issues in the report
4. Contact Dancing Numbers for assistance if needed

Deleting Unapplied Payments via Chart of Accounts

To delete unapplied payments using the Chart of Accounts:

1. Open QuickBooks desktop
2. Click Accounting from the left-side menu
3. Select Chart of Accounts
4. Search for “Unapplied Payment”
5. In the Action column, click Run Report
6. Specify the Report period
7. Use Group by to filter and select Transaction Type
8. Click Run Report
9. Find the required transaction and click the Payment link
10. Click More at the bottom of the Receive Payment window
11. Select Delete and confirm

Understanding Unapplied Payment Income in QuickBooks Online

QuickBooks Online automatically creates two accounts for unapplied payments when reporting on a cash basis:

1. Unapplied Payment Income
2. Unapplied Bill Payment Expense

Unapplied Payment Income represents income received from customer payments on a cash basis that isn’t applied to any sales forms. It refers to situations where income remains undeclared on the sales form even after receiving payment.

Frequently Asked Questions