Use journal entries to alter Accounts Receivables in QuickBooks Online

There may be times when you have to take a customer’s Accounts Receivables credit balance and transfer it over to another customer’s Accounts Receivables balance in your bookkeeping system, in QuickBooks Online.

The main reason you would ever have to do this is if one of your customers has multiple locations or subsidiaries and thus each is set up as its completely own and independent customer profile within your bookkeeping system.

Here is a popular scenario:

A check payment was received from a customer, but it was for an amount that exceeds the current balance due within their profile; so, the customer just instructs you to apply this overpaid (credit) amount to a different subsidiary’s Accounts Receivables balance.

You can indeed utilize the function of a journal entry to accomplish this in your books (in QuickBooks Onine) and here is how to do this:

1. Open up the journal entry function within your QuickBooks Online software.
2. In QuickBooks Online: Choose the “Accounts Receivables” account for BOTH accounts in your two-line journal entry. There will then be a “debit” for the amount your transfer the (negative) credit FROM and a “credit” to the account you want to transfer TO.  Be sure the name field has the name of the customer you transfer FROM (the debit) and the credit is applied to the name of the customer you transfer the credit TO.
3. Click Save and Close and be sure to process an Open Invoices report or simply review your customers AR balances to be sure you did this right so far.
4. In the future, just simply take that open credit balance now sitting in the new customer’s profile and apply to an open invoice. You can read how to do this in another blog (on this website) I have written about applying customer credits to open invoices.

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.