My client, Veronica, had some accounts receivables issues recently.

  1. One accounts receivable issue was a customer was many months past due on payment on her invoice, which was still completely outstanding. Veronica instructed me to go ahead and write off this invoice to Bad Debt expense in the chart of accounts, which is exactly what I did in her QuickBooks Online company file. However, about a month later, this client, out of the blue, sent a check payment to partially pay for this invoice. The main problem was this check payment was received after the new tax year (January) had begun, and thus the previous tax year had already been closed out. To handle this situation, I simply left the previous invoice closed (to Bad Debt) and just booked the new check payment receipt directly to an income account, thereby completely avoiding accounts receivables, especially since we did not know if this client ever planning on sending any more check payments.
  2. Another accounts receivable issue involving another one of Veronica’s customers was one of her overseas (foreign country) customers did indeed send a wire payment to pay on an open invoice; however the payment was not for 100% of the total amount owed. Veronica applied this payment; however, many months later, Veronica asked my advice on what to do with the remaining open balance. After reviewing this open balance issue, I discovered the customer’s short pay was for exactly 3% of the total invoice. I advised Veronica that most likely this customer short-paid her because of the wire transfer fees the customer was probably charged and therefore probably wanted to pass on the costs to her, without telling her about it (to my knowledge). So, I advised Veronica just to close out the remaining balance of this invoice to Bank Fees, in which I eventually did.

Note: AccuraBooks is a bookkeeping firm only, so please consult with your C.P.A. for verification and clarification about the contents of this article.

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