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When working in Quickbooks, have you ever seen “negative A/R” on the balance sheet? And what could this mean?
Where can you find some information to help explain this balance? The first thing you should do when you see negative A/R is run an Open Invoices Report to investigate this odd balance. To run this report, go to: Reports–>Customers & Receivables–>and Select the Open Invoices report. Select the appropriate date range and run it. This report will show you the problem areas. These issues show up in red negative amounts.

What does this balance mean? How can I correct it?
1. Payments were “received” and posted to a customers account - but not against any particular invoice - and they show up as “unapplied payments”. To Correct: First find out if the customer has overpaid you or not. If you have not been overpaid - then you must figure out if you failed to create an Invoice and then create the invoice -using a date prior to the date of the payment. Then apply this credit against the invoice.
2. Payments were “received” and posted to a customers account - and there are no invoices created for this customer to receive against. (See correction for item # 1 above)3. An invoice was create for a customer and a payment was received - but these two transactions were not linked up. On the Open invoices report, you will see an invoice amount and a payment receipt - with a “Net balance of 0″. However, since these two transactions were not cleared against each other, this will create a “negative amount” in A/R. To Correct: Apply the open invoice against the payment.

Note: If payments are being posted to a customers account as unapplied cash or “overpayments” - the revenue from that transaction is Not being recognized on the income statement. The creation of an invoice is the trigger for generating revenue on the Profit & Loss.

If you are the accountant that is working off of the Accountants Copy - you will not be able to correct this for the client in some older versions of QuickBooks. I would recommend recognizing that negative A/R as revenue on the tax return and having the client fix these issues in QuickBooks.

Here is the scenario - It is the end of the year and you have not reconciled any of your bank statements yet. So you have the entire year to reconcile in your QuickBooks Online company file. You begin your reconciliations and everything seems to go fine. Then — you get to the month of September and realize that you have made some mistakes back in the month of May and need to correct them. These could be various mistakes. For example: You deleted reconciled transactions and now your cash balance does not equal the reconciled balance in the reconciliation reports.

But how do you “fix” this problem? — If you go to the Online Help screen- you will not see much there. And if you have ever worked in the Desktop version of QuickBooks you know how easy it is to “Un-do” reconciliations. However, QuickBooks Online is a different animal all together. That same fix will not help you here.

Here is what you can do and it really works! I had to do this a few days ago - so you will not get messed up.

1. Go to the Bank Register and select the account that you are reconciling.
2. You will need to Un-do all reconciled items back to the point where you made the Errors. (Ex: If you are currently working in the September reconciliation screen and need to go back to May you will need to Un-Do: September,August, July, June, and May.
3. In the Bank Register, you will need to replace all “R”s in the Reconciled Status column - denoted by a Check Mark - with “C”’s. This means that you are reclassifying all transactions from Reconciled to Cleared but not reconciled.

Once you have done this - you have completed the “Un-Do” Reconciliation and are now ready to fix your errors and reconcile again. It is that easy!

I was not able to find this simple explanation in the QuickBooks Online Help screen. They make it sound much more complicated than it is and explain the concept in very vague terms.