Negative Accounts Receivable
Below is a question and answer about negative accounts receivable in QuickBooks.
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When I run a Balance Sheet, there is a negative accounts receivable amount. Do you know why?
This is usually due to customer payments that were not applied to invoices. When I encounter this, I've sometimes seen that there are not any invoices to apply them to. Run an A/R Aging Summary to find the individual, specific amounts that are causing the problem:
Reports > Customers & Receivables > A/R Aging Summary
Adjust the ending date so it matches the ending date on your Balance Sheet.
Double click on each negative amount you see there. This should take you to the Receive Payments screen. Look in the lower half of this screen - are there any invoices this payment may be applied to?
Similarly, there may be some customer prepayments that don't yet have invoices to apply them to. From an "accounting theory" standpoint, many accounting professionals would say that these shouldn't be classified as negative accounts receivable.... they would say that these payments should be classified as an Other Current Liability.
If you work with an accountant for your taxes, discuss this problem with him/her. It may be that the money can stay where it is (as a negative receivable), or it may need to be moved to an Other Current Liability account for tax/reporting purposes. I teach you how to do this here:
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Take care and thanks for writing.
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Negative Accounts Receivable - Need More Help? Contact Jennifer