In this tutorial, Linda Artesani walks through a real‑world QuickBooks Online (QBO) accountant’s file to demonstrate how to locate and resolve the "Unapplied Cash Payment Income" account. She begins by reviewing the client’s file using the Report Tools, then uses the Reclass tool to surface transactions tied to sales of product income, service income, and the problematic unapplied cash payment income. She explains why this account appears—payments entered without an associated invoice—and shows how to correct it by creating or editing invoices, adjusting dates, and ensuring proper item selection (e.g., services vs. widgets). A major focus is on handling inactive customers: she illustrates the QBO rule that a sub‑customer cannot be reactivated unless its parent customer is active, and demonstrates the step‑by‑step process of reactivating the parent first, then the sub‑customer, to clear warning messages. Throughout, she highlights ambiguous error messages, offers practical work‑arounds, and ties the steps back to earlier videos on chart‑of‑accounts cleanup. The video concludes with a clean‑up of the remaining unapplied cash payment entry and a reminder to think through processes when QBO’s messages are unclear.
Chapters
Hi there, Linda Artesani, Artesani Bookkeeping. So I have the camera off this week because I, we had our house painted inside and my office was included and it looks like the bomb went off in my office. Everything's all over the place and basically didn't have a lot of time to, we had to put everything back, didn't have a lot of time to put a blog post together so this is kind of late and I basically just rolled out of bed so this is the answer for why the camera's off. And I worked yesterday and I turned my computer on and saw that I had to take another test so So I just want to show you I passed the test. I better pass this one. I work in this program all the time. It was a little annoying. It had a ton of screens you had to go through. It wasn't quick. They changed it once again. Oh, and I also passed my CPEs. Okay, so getting back to QuickBooks Online. So one of the pet peeves I have is I think sometimes when they make this, the engineers make this program or do changes, sometimes the The error messages aren't really clear, and this actually came out of me working with a customer this week, and we were going through his file, and I'll show you just a couple of steps that I do. So this is a QuickBooks Online accountant's company file. You can tell that by this little briefcase that's for the accountants, and all my tools are in here. So I logged into my own account and then logged into this customer's account in this law firm. So a couple of the steps that I do is I'll come into the tool and I'll go to Report Tools, one of the first places I go when I'm looking at a customer file. We were working on last year, which, you know, the August deadline's coming up for the first wave of extensions. And you can see in here that, you know, I'll look through here, I'm like, okay, he did, you know, they're reconciled on the Chase credit card through March, but they haven't done their 2018 stuff. So that'll be a couple of things I would address with this client. But for purposes of this, this recording, I wanted to show you, we'll just pretend everything's reconciled for 2017. So we're gonna come into the reclass tool, which is one of my all-time favorite tools. It was introduced years ago in Desktop, and I was so excited because it saves so much time. You know, you don't have to go through every transaction. We would just go through some of these accounts and see that, you know, there's some legal services. So it's not showing because it's invoicing. So if I change this to say All, it'll show the transactions that would show on an invoice. And I can't reclass these, so when you see that little red dot, you can't reclass it. I'd actually have to go in and open the invoice to change it. So we come through here, sales of product income. This is going to tie back to last week's video because you can see here the sales of product income. When we cleaned up the chart of accounts, I don't want to see -1. That means there's more than one and the system had to make this -1 to keep it with a different name. So I'd have to go in and clean that up. Service income, these things I would like to see under sales, but they're not subcategories under sales. So this would all tie back to that video and I'll put a link in the post. Coming up to unapplied cash payment income, I wanted to address this because I touched upon it in the chart of accounts, and I wanted to show you in the chart of accounts video, I want to show you why this account occurs and how you can get rid of it. So in here you can see that he's got a payment. The invoice would normally show if the invoice was dated after the date of the payment. This is where you would see this. This, since there's no invoice, this tells me that this payment, if I click on it, There's no invoice, and he would have received a warning on that saying that you're entering a payment without an invoice. Do you want us to create a credit? And that's what happened in this case. So I'd have to have an invoice entered to clear this out because clearly this person paid him. Maybe they paid him a deposit, and that's a whole other issue you'd want to do and create an item for a deposit, put it in your deposit, your deposit customer deposit account. Which would be a liability account. You now owe this customer the work, and then you would clear that out later when you've actually earned the income. So you can see here, you don't— you didn't select any invoices. Maybe you should have created a sales receipt. So this is a pretty clear warning that you're going to save it as a credit. But you'd want to address that at year-end because I don't want to see this hanging in this unapplied cash payment income. And you'd only see this if you put this on the cash basis view. And this customer uses cash basis reporting for his books. So let's come down to the other one, and here's Joe Smith. So we went into Joe Smith's invoice. He's like, oh wow, what's Joe Smith's invoice in there? 7/10 and received the payment. Oh no, no, that should have been— I didn't put the right date. So we'll come into the invoice and we'll change the date, which is what we did. I'll just change this to a 3. And then we came in here and he goes, oh no, no, I don't want it to be widgets. I got rid of that. That was made in error. This should just be services. So I'll just type in services here. And then hit Save. And I'm changing an invoice. Something's not quite right, and this is where I wanted to get into the warning label that's a little unclear. One of the list elements assigned to this transaction has been deleted. Oh yeah, I noticed Fred Smith is deleted and Joe Smith is deleted. Fred Smith's a sub-customer of Joe. And you— before you can modify this transaction, you must restore Joe Smith, Fred Smith, Okay, I get that. That's pretty, pretty clear, right? So I'm just going to go back here and revert my invoice back to what it was and get out of that box. So now I need to go over to the sales and I can see they're not here because I deleted them. So I come over to this gray gear, which is kind of hard to see, and say include the inactive. Back over here, I'm going to go to Fred Smith because it was Fred Smith's invoice. I'm just going to make him active. So now he's active. I'm going to come back over to— I'll come back over here, come back over to this, and now I can come over here and change this invoice to say services. This is what happened actually with my customer. I tend to fly through things, so save. Transaction you linked is linked to others. Yes, I know that. Oh, I need to change the date to make it 3/10. Save. What the heck? There's that warning again. Now I know I made Fred Smith active, right? You saw that I made Fred Smith active and it's giving me that same warning. So why is that happening? So it became like a vicious circle, right? I know I fixed it. I was in here, I made him active, I hit Make Active and it says is now active, right? Says it. Joe Smith, Fred Smith, now active. So why is it not? I can hit Make Active all day long. The problem is Joe Smith is inactive as well, and he's the parent. You can't reactivate a sub-customer with the parent customer not active. So let's go back here. And this has probably happened to other people and they couldn't figure it out. So I'm going to go back to that little gray gear. I'm going to include inactive, and I'm going to start with Joe. So even though Joe wasn't the customer on that invoice, I'm going to make Joe active first. Okay. Now I'm going to go back to my sales list again. Joe is now active. I can see it. There's no deleted after his name, and I'm going to make the list back. And now I'm going to make Fred active, and I'm going to make him active. Now I'll go back to my other tab that I have open. I'm just going to recycle it so that I can refresh the screen. Come back to my unapplied cash payment income. Come back to my invoice. Change the date of the invoice to 3/10 because that's when he should have put it and not 7/10. And also he wanted to change widgets. So let me see if this will let me just save this. And it did. So he wanted to change widgets because the widgets were supposed to be services. Let's change this now to services. And when I changed it, as you see, it changed it to a zero amount because services Didn't have an amount added to it as a default, so now I have to make it back to the actual invoice amount. So that now makes it paid. You can see paid now in this corner. Hit save. Go back. Go back to my unapplied cash payment income, and all I have left is Joe Ingalls. So I just have to make an invoice for Joe Ingalls for three thirty-two to clean that one up. That's there. It was fairly easy to clean up as long as you understood where the deleted was, and it was pretty clear in the message that it was coming from. Deleted Fred and deleted John, but I wanted you to see that you had to reinstate the parent customer before you did the sub. I hope this was helpful in this video. I will be making some more videos like this, but I just wanted to put this together because it happened this week and just show you that sometimes you have to really stop and think through the processes. And that's really basically how you clean up that unapplied cash payment income account. Thank you for watching. I hope it was helpful, and, um, we'll be seeing you soon on more videos. Thanks. Bye.
