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how did a new account appear in my P&L after years of posting? I now have "unapplied cash payment income"

I have been using quickbooks online for several business for years. now suddenly one of the companies is showing this new account in the income field. I am making the same transactions I have made for years, with the same customers. what happened?
  • I have the same problem on a HOA I run. I have two members that over paid and it shows up on the P&L as (Unapplied Cash Payment Income.) Before it would show up as liability until I did the next year billings.

The IRS does not require you as Quickbooks the software company to do anything.  Forcing this on us as if you know better than me and my company is ridiculous!  I write off or recognize into income my prepayments when I deem it appropriate, not because Quickbooks forces me to. Get over yourself Quickbooks. You are not an agent of the IRS.

    Do you receive payments dated in advance of invoicing?
      I had contacted them and they did not have a solution. What I did find out is that they are making changes in the way Quickbooks handles Accounts Receivables in companies using cash basis reporting. Switching to accrual basis corrects the way the reports appear and temporarily allows the reports to appear correct, but the underlying changes that Quickbooks made are still there.
        "I guess this might be a good argument to file on an Accrual Basis, huh?"

        Uh, no way.

        Prepayments by customers can be correctly tracked as a Liability and then applied to the actual sale afterwards. This is done using an Item that is linked to a liability account, on sales receipts, when first getting the funds. Then, use that item on a Credit Memo for the same date as the invocie, and apply that credit to the invoice. That way, you do not have an "AR credit" floating around as an unapplied payment.

        AR prepayments should not just sit as credits and you should not be accepting a Payment when no charges exist. Changing the method of processing these prepayments is the correct way to take care of this.
        • Thanks qbteachmt for making sure my "joke" about accrual didn't get misconstrued.
        • That was a joke? Sheesh.
        We never get a payment that is not posted to an invoice already on the books - every payment we receive is applied against an invoice. This situation is a direct result Quickbooks Online has made in the way payments are applied. They are phasing it in with the different  versions of the online packages. 
          ", on new over payments they show up as “Unapplied Cash Payment Income” on the P&L."

          Which is in lieu of the actual income account that would be/will be posted to if/when there was an invoice with an item to control the data flow.

          I teach to never carry AR credits over any significant reporting period and this is why: AR credits are uapplied funds that you really did receive and are in your bank, so funds are in your control. If you post it as a liability, this is resolved.
          • That is what I don't understand.  These overpayments have always showed up on my balance sheet as a negative accounts receivable.  In fact, an overpayment from May still does.  But now, an overpayment from September, does not.  Instead it shows in this new account, as income..  Would have just liked to get a memo from Intuit letting me know of the change, that's all.

          I was able to fix my 'unapplied payment' with the following info: 

          Unapplied Cash Payment Income

          It's used to report cash basis income from customer payments that are received but not applied to any sales form.  Simply put - you took the money in, but never declared the income on a sales form.

          Usually the date of the payment is before the invoice date it's applied to.  Example:  Receive payment today, invoice next week.  It's "unapplied" until next week when the invoice hits the books.

          If an incorrect amount is showing in this account, you'll need to apply the payment to an invoice dated prior to the date of the payment.  Otherwise, Unapplied Cash Payment Income is correct.

            I am suddenly seeing the same new account.  I ran an "all dates" report off this account, and the first transaction is mid June, 2013.  I know before that, if a customer over paid, it did not use this account.  I called Intuit, and they assured me it has always been there.  There is an open bug on it though, opened yesterday 10/1, something to do with an index issue on the database.  I know something is fishy because I have another customer that has had an "unapplied" credit since May, and they do not show in that account.  Lastly, when I look at my chart of accounts, this account shows no transactions.
            • Being a (new) HOA treasurer over payments before were recorded as a minus on the balance sheet
              ( Accounts receivable-dues) until a credit was issued to the next invoice. Now, on new over payments they show up as “Unapplied Cash Payment Income” on the P&L. Income is income and taxes are taxes.
              Now you write the new invoice and the line goes away it you have apply credits automaticaly. .  
              It's a IRS reporting thing as said.   
              Correct me if I’m wrong!
            • So once it is applied in a future month, do I get a negative amount in Unapplied Cash Payment Income?  Or is it double counted?  Or is the some of my monthly P&L's not equal to the yearly P&L?
            • It you have apply credits automaticaly and when you write a new invoice the credit is applied and the Unapplied Cash Payment Income on the P&L goes away
            This is something that cannot be resolved in this forum. You will need to contact QBOE Support as they may have to access your machine to see what the trouble is. Please contact them @800-926-3667 6am – 6pm PT, M–F, Saturday 6am - 3pm Pacific Time.

              I apologize for the confusion there has been with this account.  As Mike stated above it is not a bug, but a change that was made to comply with the IRS requirement.  We've created an article to help better explain this account.  


              • I am seeing this Unapplied Cash Payment when I enter my payroll-from time to time we let the employees order stuff from our vendors. When I pay the vendor I set this up as an AR-Employee.  Then we deduct from their next payroll. On the entry I enter the deduction as a "credit" to AR. This is what I am seeing in the Unapplied Cash Payment. Any suggestions?
              • Hi djssmiley,
                This is happening because you're selecting the A/R account when you record the transaction.  Once the A/R credit is removed the amount should also be removed from the Unapplied Cash Payment account.  

                Let me know if you have additional questions. Have a great day!

              • The employee purchase activities should go in and out through an Other Asset account. The purchase from the vendor is not business expense but Other Asset (loan to employee) and the repayment is the payroll deduction item linked to the same Other Asset account, and is not an AR activity.

                You can read about employee loan and repayments in your Help system.
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