Unapplied Amounts in Customer Payments results in a negative balance in the Accounts Receivable Account as shown below:
1. Invoice amount is for $100.00
2. Payment is for $110.00.
3. Accounts Receivable will be credited for $110.00 which is $10.00 more than the balance of the invoice.
To correct this, users can do the following:
1. Apply the Unapplied Amount can be used to pay other invoices.
2. Create a journal entry to apply to the Unapplied Amount:
· Go to Transactions > Financials > Make Journal Entries.
· Debit Accounts Receivable $10.00 and Credit the appropriate account (i.e. Other Income) for $10.00
· Assign the Customer in the Name column field and save the transaction.
· Navigate to Transactions > Customers > Accept Customer Payments.
· Select the customer in the Customer field.
· Under the Apply > Invoices subtab select the journal entry.
· Under the Apply > Credits subtab select the Payment with the Unapplied Amount.
· Hit Save.