The QuickBooks unapplied cash payment income indicates an account that generates revenue on a cash basis. It does not report this income in the sales form. It is important to make the payment on the payment date rather than making it on the invoice date to clear the unapplied cash payment. Due to accounting purposes, this payment may have to be cleared. The process can be performed on QuickBooks Desktop and the available Online version. Users can apply for the unapplied cash bill payment in QBDT by opting for the Receive Payments button. You can also apply it to the profit and loss in the QBO software by moving through different methods. Following this, the QB unapplied cash payment income can get fixed or cleared.
- What is Unapplied Cash Payment Income in QuickBooks?
- Unapplied Cash Payment Income Account:
- Why does an Unapplied Cash Bill Payment Income in QuickBooks Occur?
- How to Fix/Clear Unapplied Cash Payment Income in QuickBooks Desktop?
- How to Apply Unapplied Cash Payments in QuickBooks Online on Profit and Loss?
What is Unapplied Cash Payment Income in QuickBooks?
QuickBooks unapplied cash payment income/expense can be stored in an account. This account is useful for the reporting of revenue that is based on cash. These revenues may be received but may not be considered as sales. Such revenue can mean that a user has taken the amount and never showed the collected revenue in the form of sales. Also, the date of this payment can be much earlier than the printed one on the applied invoice.
There are two types of accounts for unapplied cash payment income in QuickBooks. These include:
Unapplied Cash Payment Income Account:
An unapplied cash payment income account is a type of account needed for reporting the income based on cash that is collected and not recorded as sales. The product/service can also be mapped to the bank account which can lead this amount to the Unapplied Cash Payment Income even when the real payment has not been received.
QuickBooks Unapplied Cash Bill Payment Expense Account:
The account for QB unapplied cash bill payment expense can record the expense on a cash basis from a vendor or paychecks that have been sent to her/him. These cash/checks may have not been reported to the vendor’s bill. This can take place when a bill has been created for an account balance of a credit card.
Read more: To know how to record a transfer between accounts in QuickBooks, you can click here.
Why does an Unapplied Cash Bill Payment Income in QuickBooks Occur?
Several reasons can arise for the occurrence of the QuickBooks unapplied cash payment income. One of them is that the payment may have been entered without comparing it with the form of sales. The other reasons for the creation of this income in QB can be:
- The item of the product/service may get assigned to the bank account. This, in turn, can allow the total to reach the unapplied cash payment income account without even receiving the real transaction.
- If the amount occurred seems erroneous, then the payment can be made on the invoice date rather than on the payment date.
How to Fix/Clear Unapplied Cash Payment Income in QuickBooks Desktop?
For clearing the unapplied cash bill payment expense in QuickBooks Desktop, users have to make use of the Receive Payments menu. You need to run QBDT and move to its Customers tab. Then press the Receive Payments button and pick the customer. Now, select the amount of credit as it will be included in the section of Existing Credits. Soon after, the expense or unapplied cash payment income will be cleared.
Keep following the below-highlighted steps to finish the process:
- Launch your “QBDT” account.
- Go to “Customers”.
- Tap on the “Receive Payments” option.
- Choose the customer.
- Have a look at the amount of credit.
- Ensure that the amount gets included in the “Existing Credits” section.
- At the bottom area of the page, the check is to be refunded.
- Press the “Apply Existing” button.
- Type the specific amount in the “Payment” column.
- Once you enter it, push “Ok”.
In the end, you can check for the QuickBooks unapplied cash payment income in the Desktop version. The income/expense should get resolved by now.
How to Apply Unapplied Cash Payments in QuickBooks Online on Profit and Loss?
QuickBooks Online users can apply the unapplied cash bill payment on their profit and loss through Open Invoices. You can also match the transactions in the QBO software with the Open Invoice Report by utilizing the Payment Date tab. Additionally, if the transactions do not match, then you may go for the Invoice button to start a procedure.
The methods discussed below will let you know more about applying QuickBooks Online unapplied cash bill payment expense/income.
Method 1: Running the Open Invoices
The unapplied cash bill payment in QuickBooks Online can be applied to profit and loss if the Open Invoices button is chosen. To choose it, first, head to the Reports section in QBO. Then hop to the Find Report by Name field. Now, the Open Invoices tab needs to be selected. Press on the Report Period option to go further in applying the payment.
The remaining procedure for the running of the open invoices for applying this payment are discussed below:
- Move to “QuickBooks Online”.
- Select “Reports”.
- Visit the “Find Report by Name” section.
- Press “Open Invoices”.
- Enter the “Report Period”. See to it that the period has been correctly mentioned.
- Click on the “Run Report” option.
- Go to the column of “Transaction Type”.
- Find the transaction that has been listed as payment.
Read more: We suggest that you read our blog on how to write off bad debt in QuickBooks to see how it can be handled.
Method 2: Matching the Payment Transaction with Open Invoice Report
The unapplied cash payment income in the QuickBooks Online program can get applied when you go for the Payment Date option. You need to launch this program and opt for the Payment Date you want to open. Below the Outstanding Transactions, you will have to confirm the Open Invoice. Then press the Save and Close tab. This is how an unapplied cash payment income in QuickBooks Online can be applied.
- Choose the “Payment Date” that needs to be opened in “QBO”.
- Move to “Outstanding Transactions”.
- Below the option, verify “Open Invoice”.
- In the closing step, please tap on “Save and Close”.
Method 3: Open Invoice Does not Match with Payment Transaction
In QuickBooks Online, the unapplied cash payment can be applied when Open Invoice and the Payment Transaction do not match. To ensure the same, you are suggested to check the Invoice option. You need to access your QBO account and then choose +New. Next, you will find the Invoice tab below the Customer button. Mention the information asked for in the tab and tap on Save and Close.
To find out what more you have to do, these instructions can be checked:
- Run “QBO” as this method’s initial step.
- Reach “+New”.
- Find “Invoice” below the “Customer” menu.
- Enter the details in the form of the customer, date, and amount.
- Press “Save and Close”.
- Then navigate to “Open Invoices Report”.
- Look for “Unapplied Payment” after this.
- Choose the opening date.
- Confirm the “Open Invoice”. You will find this below “Outstanding Transactions”.
- Hit “Select and Close”.
- Confirm the “Open Invoices Report” to check if more transactions are listed as payments.
How to apply unapplied cash payments in QuickBooks Online should now be clearer. The different methods suggested here can be used based on the information available to you.
Users find it better when their unapplied cash bill payments in QuickBooks are cleared. The blog taught you about the ways to clear the QuickBooks unapplied cash payment income or expense. In addition to this, you were able to understand what this type of income account means and what are its kinds.