Schedule Your Appointment

We offer a variety of personalized bookkeeping and accounting services.  Choose an option that is right for you.

Copyright 2018 Reconciled Solutions

What is Unapplied Cash Payment Income?

What is Unapplied Cash Payment Income?

Every month, I meet with my team to review our Marketing Dashboard and KPIs. We always take a look at keywords our small business community are googling when they find our website.  The most un-sexy and unappealing search that comes up with repeated frequency is this: Unapplied Cash Payment Income.

I envision droves of small biz owners sitting at their computers late at night in their pajamas, trying to get their arms around their accounting files, likely spitting mad because they have no idea what these four words mean and why they are popping up all over their QuickBooks Profit and Loss report. My hope is that with the following explanation, I am minimizing the frustration of these late-night googlers, trying to take accounting matters into their own hands and pull their file together for their accountants.   

What is Unapplied Cash Payment Income?

Here is my definition: it’s a specific account used for reporting income on a cash basis. It shows up when income, such as a customer payment, has been received but has not been applied to any sales form. In other words, if there has not been an invoice or sales receipt created yet, then there is Unapplied Cash Payment Income. Often, there IS actually an invoice or sales receipt created, but the date of the payment comes before the invoice date. For example, you may have received payment today and the invoice date is next week. It says “unapplied” until the next week, when the invoice hits the books.  

How to fix it

There is a fix for this mysterious Unapplied Cash Payment Income. Just revise your dates on payments and invoices so that the Invoice always precedes the payment. Ideally, if an incorrect amount shows up in this QuickBooks account, then, you will need to apply that missing payment to a correct invoice dated prior to the payment date. Otherwise, the Unapplied Cash Payment Income will stay as-is. 

There is a less common reason for the appearance of Unapplied Cash Payment Income. A product/service is mapped to a bank account rather than to an income account type. The amount will go into Unapplied Cash Payment Income for the actual payment not being received. If the issue is that a product/service is mapped to a bank account rather than to an income, we simply need to correct the mapping.

The Open Invoices report

The quickest way to find out whether you have any unapplied payments or not is to run a report. It’s named “Open Invoices” and it’s under the Reports section of QuickBooks. You’ll find it in the “Who Owes You” section. In this report, if you see any negative numbers, then payments or credits were not applied properly in the account. 

At Reconciled Solutions, our mission is to help our small business clients find visibility and clarity to their financials.  It sounds like a simple enough thing. But things like Unapplied Cash Payment Income often create a big old roadblock to visibility and clarity. I wrote this article in the hopes that it will help frustrated do-it-yourselfers find visibility and clarity to their financials. I hope it contributes to your success as a small biz owner seeking profitability and sustainability in their entrepreneurial endeavors.

Angie Noll