Is your QuickBooks double counting income? Many users have reported that in their profit and loss report, QuickBooks shows double of the income there should have been. This can happen if QuickBooks counts the Invoice and Payment of the invoice (direct deposit into the checking account) as income. In this blog, we will go into detail about why is QuickBooks double counting income. Moreover, we will see how to correct this issue.
|Although this blog will guide you on how to prevent QuickBooks from double counting income, an expert can provide a faster resolution. Therefore, we recommend that you dial 1(800) 580-5375 and speak to a ProAdvisor without further delay..
Why is QuickBooks Double Counting Income? Know Here
Let’s say you receive the invoice payments from the customer. Then, you create deposits and QuickBooks counts them on the top of the invoice payments. This is the reason for QuickBooks double counting income in profit and loss reports.
This primarily happens because the deposits you created weren’t linked with the payments you received from the customers. This makes QuickBooks think they are separate payments and count them both. How can you prevent QuickBooks from double counting income?
We will walk you through the steps you should carry out to fix QuickBooks double counting income issue, depending on the QuickBooks product you use. Therefore, if you use QuickBooks Desktop or QuickBooks Online, scroll to the section that best fits your product description.
Case 1 – QuickBooks Desktop is Double Counting Income
If you create the deposit without matching it to the payment, it creates a duplicate transaction entry. This might be the reason why you see duplicate transactions in the bank register during QuickBooks reconciliation.
Here is how you can delete duplicate transactions:
- Tap on Lists.
- Select Charts of Accounts.
- Double-click on the bank account in question. This will open the register.
- Locate a duplicate deposit. Double tap on it to open the transaction.
- Press Ctrl + D keys on the keyboard or the Delete button.
- When you see the message “Are you sure you want to delete this transaction?” select Yes.
This will create duplicate entries, which were a result of QuickBooks double counting income. If you want to know how to prevent QuickBooks from double counting income in the future, scroll down.
To fix QuickBooks double counting income, you will need to edit the payments you received in QuickBooks Online.
Here is how you can edit the payments:
- Click on Sales and tap on Select All.
- Locate the payment you want to edit and click on it.
- You will see a Deposited to drop-down menu. Select Undeposited Funds.
- Choose Save and Close.
Now, run the Deposit Detail report and adjust the date range. This will help you review the details easily. Finally, edit the deposit and link it to the payment.
- Tap on the Search icon on the top right side of the window.
- Enter Deposit details in the search bar. Click on Deposit Detail.
- Tap on the Report period drop-down, and select This Month or Custom to adjust the time.
- Tap on the Run report button.
- Now, locate the correct deposit and click on it.
- Choose a suitable bank account in the Account field. Enter the date.
- In the Select payments included to this deposit field, mark the suitable checkboxes.
- Finally, click on Save and close.
This will resolve the issue.
Undo a Transaction that’s Automatically Uploaded
In case you manually entered a transaction that was already uploaded, you will need to undo the process. Once done, you can match it to the manually added one.
- Go to the Banking page and find your bank account. Navigate to the Categorized column.
- Find the sales receipt that was added and click on the Undo button under the Action column.
- This will send the transaction to the For Review column.
- Ta on Find Match, followed by Find other matches.
- Now, select the manually entered sales receipt from the search results.
- Finally, tap on Save.
Do this for all the duplicate transactions to resolve the QuickBooks double counting income issue.
How to Prevent QuickBooks from Double Counting Income
It might be a hassle to correct the duplicate entries that spawn because of QuickBooks double counting income. This is why you need to create the right default settings and make your work easier.
Let us see how you can prevent QuickBooks from double counting income. This can be done with the help of Undeposited Funds. You can use this method in both QuickBooks Desktop and QuickBooks Online.
Have you ever noticed the Undeposited Funds in the Charts of Accounts? The Undeposited Funds is a temporary account that QuickBooks uses to store payments until you deposit them into the bank account. Thus, if you don’t deposit money in your bank account right away, Undeposited Funds might be a crucial account for your business.
Receive Payments in the Undeposited Funds
When you receive invoice payments from the customers, they should be deposited in the Undeposited Funds if you haven’t deposited the money into your account. Now, when you move the money to your bank account, you will have the option to create a deposit and link it with the payments in real-time.
Let us guide you on how to receive payments in the Undeposited Funds account to avoid QuickBooks double counting income issue.
QuickBooks is, by default, set to receive the payments into an Undeposited Account.
First, you’ll need to modify the preferences so that you can choose the account to put payment into. If you want to set the Undeposited Funds account as the default account to receive the payments to, you can mark the checkbox for it. Leave it unmarked if you want to choose the account you wish to receive the payment to when you create a sales receipt for a customer.
- Tap on the Edit menu. Choose Preferences.
- Now, choose Payments from the menu. Head to the Company Preferences section.
- Mark the checkbox for Use Undeposited Funds as a default deposit to account. (You may unmark it if you want to choose the account to receive payments during the time of creating the sales receipts.)
- Select OK.
In case you have unmarked the checkbox for Use Undeposited Funds as a default deposit to account, you will need to choose the account when you create the sales receipt.
Here is how you can choose the Undeposited Funds account when creating the receipt:
- Tap on Create Sales Receipt on the Homepage.
- Click on the Customer drop-down menu and choose the customer.
- Choose Undeposited Funds in the Deposit to drop-down menu.
- Fill out other details.
- Click on Save & Close or Save & New.
Important: Check the Deposit to field and make sure the payments are routed to the right accounts.
After receiving the payments in the Undeposited Funds account, the next step is creating the bank deposit. While doing so, make sure to match it with the right payments to combine the payments instead of giving way to duplicate entries.
Here is how you can link the payments and the deposit:
- Click on the + New button, and choose Receive payment.
- Tap on the same customer.
- Now, choose the Outstanding Transactions and the Credits.
- Finally, select Save and Close.
The Undeposited Funds account is a temporary account that is often unaccounted for in the reports. Therefore, you should check it every once in a while, and clear out any pending payments.
Frequently Asked Questions
Ans- Do you notice that QuickBooks payroll is double counting the wages? It might be possible that you see duplicate entries – an expense from your bank statement (QB transactions) and another transaction that was automatically created by QuickBooks.
Let us see why QuickBooks is double counting expenses:
● Payroll transactions should have been matched, but instead, they are added over
● An Expense transaction was created.
Here is how you can exclude duplicate transactions from the Banking menu:
● Tap on the Banking menu and choose Banking.
● Click on the For Review tab.
● Select the duplicate transaction.
● Now, click on the Batch action drop-down menu.
● Choose the Exclude selected option.
This will move the transaction to the Excluded tab.
Ans- Reach out to your POS provider and ensure that when the invoices are imported to the program, it is done in a way that no transaction is double counted. This is the only way to prevent double counting your sales revenue.
Ans- If you use an e-commerce website and are receiving payments using PayPal, stripe, etc., you should make sure that the payments go to the undeposited accounts by default. Now, you can create a deposit and link it with the correct payment to ensure your revenue is not double-counted. Scroll up to the blog to go through the detailed steps for the same.