Adjust Accounts Receivable in QuickBooks Desktop

Accounts receivable are usually created for a short period. You can easily manage AR in QB, but for that, you should know how to adjust accounts receivable in QuickBooks Desktop. Accounts Receivable is a form that states the amount an organization is entitled to from a client or customer. They are created for keeping track of due payments. If you don’t, then no worries, here we will discuss the step-by-step process on how you can exactly do so, all with ease.

What Exactly Are Accounts Receivable in QuickBooks?

In simple terms, accounts receivable are the money you receive from your customers. It appears when you send invoices for your products or services. These balances are paid off as soon as your customers pay you. But sometimes, things don’t go as you planned, and then adjustments need to be made.

When Would You Need to Adjust A/R in QuickBooks?

Let’s take a look at some real-life situations that might require changes to your A/R:

• When a customer has paid too much or too little.
• The payment amount has been applied to the wrong invoice.
• An old debt needs to be written off because it is no longer recoverable.
• When you have issued a credit memo but have not applied it.
• Duplicate invoices or transactions are driving up your A/R.

Before Adjusting the Accounts Receivable in QuickBooks Desktop

Before you do anything major in QuickBooks, make a backup of your company file. It only takes a few minutes, and it can save you hours of headaches later.

Here’s how:

• Go to File > Back Up Company > Create Local Backup.
• Choose Local Backup, click Next, and follow the prompts.

How to Adjust the Accounts Receivable in QuickBooks Desktop

Step 1: Adjusting for Customer Overpayments

If a customer sends you more money than they owe, here’s how to handle it:

1. Go to Customers > Receive Payments.
2. Pick the customer from the drop-down list.
3. Enter the amount they paid.
4. When QuickBooks notices the overpayment, it’ll give you options:
   • Keep it as a credit
   • Refund it
   • Apply it to another invoice
5. Choose what makes the most sense and hit Save & Close.

Step 2: Writing Off an Old or Uncollectible Balance

Sometimes, despite your best efforts, a customer just won’t pay. Here’s how to write it off properly:

1. First, make sure you have a Bad Debt Expense account:
   • Go to Lists > Chart of Accounts > New.
   • Choose Expense, name it “Bad Debt,” and save.
2. Then, create a Credit Memo:
   • Go to Customers > Create Credit Memos/Refunds.
   • Select the customer and item (assign it to the Bad Debt account).
   • Apply the credit memo to the invoice via Receive Payments.

That clears the invoice from your records and reflects the loss accurately.

You may read this: How to Record Expenses in QuickBooks

Step 3: Removing Incorrect Payments

If you entered a payment by mistake or applied it wrong:

1. Open the Customer Center.
2. Find the incorrect payment and double-click it.
3. Choose either Delete or Void.
   • Void keeps a record but zeros out the amount.
   • Delete removes it entirely.
4. Make your choice, confirm, and close.

Step 4: Fixing Unapplied Credits or Payments

Step 4: Fixing Unapplied Credits or Payments

1. Go to Customers > Receive Payments.
2. Select the customer.
3. You’ll see any open invoices and credits.
4. Match the credits/payments to the appropriate invoices.
5. Hit Save & Close.

Step 5: Correcting the A/R Opening Balance

This usually comes up when setting up QuickBooks for the first time or cleaning up old data:

1. Go to Company > Make General Journal Entries.
2. Pick a date and enter the adjustment.
3. Debit Accounts Receivable, credit Opening Balance Equity, or the right account.
4. Don’t forget to enter the customer’s name in the Name column.
5. Click Save & Close.

Always double-check with your accountant when making journal entries!

Also, read this: Opening Balance Equity in QuickBooks

How to Check Your Work

1. Go to Reports > Customers & Receivables > A/R Aging Summary.
2. Review outstanding invoices, unapplied credits, or any balances that don’t look right.

Final Thoughts

Keeping your Accounts Receivable clean and accurate in QuickBooks Desktop isn’t just good practice — it’s essential for maintaining healthy cash flow and clear financial reporting.

Whether you’re cleaning up an overpayment, fixing a mistake, or writing off an old balance, QuickBooks gives you the tools to make the right adjustments. Just remember to back up your data, double-check your reports, and when in doubt, get help from an accounting professional.

Now that you know how to adjust A/R in QuickBooks, you’re one step closer to mastering your business finances.

Frequently Asked Questions