now you are ready to manage advanced issues regarding reconciling with customers the most
complex type of mistake to find and fix is finding and fixing a miss applied payment this means that
either you or the customer applied one of the customers payments to the wrong invoice there
are specific symptoms or clues that show you that you have a miss applied payment if you see these
conditions then you can have confidence that you know what the problem is and you learned in this
video how to fix it the clues are the customers total balance is correct but the individual
invoice balances one by one are different if this is the condition then you know for sure
the only possible mistake that you can have is a miss applied payment in our first example we are
comparing candies open invoice to our open invoice report this blue box is candies open invoice
report in Candy's computer however this part here is our open invoice looking at the candy section
so you can see candy would call us to complain about the differences between what we think are
the open invoices and what she thinks are the open invoices look very closely at this condition you
may notice that the total balance that we both have for candy is the same and is therefore
probably correct both candy and Holden agree that can-do is 11,000 160 in total however when
you look at the individual invoice balances one by one you notice that the balance that candy has for
invoice number 10 is different than the balance that we have for invoice number 10 if you look a
little more closely you can also notice that what candy has for the balance of invoice number 15 is
different than what we have for the balance of invoice number 15 but even though we have two
invoice balances different the total that can do us is agreed at eleven thousand 160 so what could
have possibly caused this condition well when we look more closely we see that every difference we
compare is different by six hundred eighty dollars think about it the difference between Candy's
number 10 and our number 10 is 680 the difference between Candy's number 15 and our number 15 or 680
in fact if you look at the differences between the invoices themselves you can see the difference is
680 in this case we probably have miss applied one payment in the amount of $680 however we
still have to follow the official procedure for finding and fixing mistakes to fix a miss applied
payment here's what you do first you open up the detail report in our computer that's the customer
balance detail second open each payment one by one start with the latest start at the bottom of the
customer section in the customer balance detail and open only the payments third compare the check
marks and the payments to what the customer is telling you regarding where the payment should be
applied and if the customer disagrees with where you put the check marks and if the customer wants
the payment apply to a different invoice then you have to uncheck the wrong invoices and recheck the
correct invoices to reapply the payment so let's imagine that the two QuickBooks files I have
open are both mine and candies ours are in dark blue and that would be Holden's records and the
title bar of every window in Holden's records will be the dark blue however in Candy's file
or at least the file that we're pretending is candies the title bar will be light blue
now when Holden's file I will open the customer balance detail and adjust it so that we see only
can these numbers and these are candies numbers starting at the bottom I will do the same thing
in the file that we are imagining and pretending is in Candy's computer so that we can reconcile
properly with this customer okay so now we have Candy's customer balance detail open here and
we have our customer balance detail with candy showing here now the procedure says the following
go to the very latest payment double click and observe where the check marks are we can see
the February 17th payment was applied to invoice number 12 in our records so let's close this out
when we go to candies records she also has the payment for February 17 620 when we open it up
we see that in Candy's computer she also has the February 17th payment applied to number 12
so since this payment was applied to the same invoice in our records and the customer records
this payment cannot be the source of the problem we don't have to open an invoice because we know
for sure the problem is a Mis applied payment so let's skip the invoice on February 14th the next
oldest payment is February 10 when I double-click the February 10 payment from candy inside Candy's
computer candy applied the February 10th payment to invoice number 10 now when I switch over to
our records in our computer and we look at the February 10th payment we see in our computer
the February 10th payment was applied to invoice number 15 the February 10th payment is also 680
dollars which is the amount that we saw was different when we compared the open invoice
report so once again we have found the problem our February 10th payment was applied to Feb you was
applied to invoice number 15 but Candy's February 10 payment in her computer was applied to invoice
number 10 if we assume the customer is correct then I am switching back to our records as you
can see dark blue window title bar and I'm going to change what we have to be the same as what
candy has I'm going to uncheck the wrong one and recheck the right one I will uh apply the payment
to invoice 15 and reapply it to invoice number 10 click Save and close save the changes yes now
when I open our open invoice report and look at the section of candy each invoice one by one in
our open invoice report should be the same as the open invoice report for in Candy's computer
but not just the total the individual amounts one by one starting at the top in the section
of candy on the open invoice report she has seven sixty one thousand two thousand two thousand 5400
and in our computer in our records starting at the top of candy we have the exact same thing
seven hundred sixty one thousand two thousand two thousand and five thousand four hundred so now we
have the total matching candies total and we also have each individual open invoice balance one by
one matching each individual open invoice balance and Candy's computer one by one now
Candy's records are correct sometimes the customer will call you to complain that the statement you
sent is very very very different than what they have in their computer and their records however
they still notice that the total balance that they believe they all holdin in their computer
is the same as the total balance indicated on the statement why why is it that the records are such
a mess but the total balance is correct well in a case like that it must mean that you have
several miss applied payments have confidence if the total balance is correct that the only
thing you have to do is find and fix miss applied payments for example customer Alain called you
and complained that the statement you sent was not only inaccurate but totally different let's
take a look imagine on Allan's computer when he looks at the invoices that he believes are unpaid
and owed to Holden they look like this however on the statement we sent him from our computer
Holden's open in Allan's open invoices for what he owes Holden looks like this now it may look like
all three invoices have the wrong however you must have confidence that the only problem is
several Mis applied payments you know this for sure because the total balance of your records
and the total balance in Alan's records are the same so execute the procedures one by one until
the individual invoices on the open invoice report match exactly now again for this demonstration I
have two QuickBooks files open let's imagine the file with the red theme and all of the red title
bars are Alan's computer and let's imagine that the normal color with the normal theme
is our computer hold on we open the customer balance detail on our computer and make sure
Alan's records are showing and when you are on the phone with Alan Alan will open his detail report
and make sure every transaction since the last statement is showing on the screen the procedure
tells us to start at the very latest payment and open it up February 22 a payment to five
hundred dollars in Alan's computer was applied to the January 11th invoice number nine so the
February 22 payment of $500 Alan has applied to invoice number nine however in our computer the
February 22 payment for five hundred dollars as you can see is also applied to invoice number nine
therefore the February 22 payment is not a problem I'm going to close it out in our computer and Alan
on the phone with you will close it out in his computer the next oldest payment is February 16th
for $1000 the February 16th for $1000 in Alan's computer is applied to invoice number 13 however
that same payment the February 6 payment of $1,000 an hour computer is instead applied to number nine
aha we found a difference we have February 16th apply to number nine but Alan has February 16th
applied to number thirteen now again we have to assume the customer is correct so that means we
have to change our February 16th payment from number nine to number thirteen let's go back to
our computer and uncheck number nine and recheck number thirteen now our payment on February 16th
looks just like Alan's payment on February 16th so Alan doesn't have to save his he didn't change
anything we have to save our change and click yes now that we fixed a miss applied payment
let's compare the open invoice reports and see if they're the same I open my open invoice report in
Holdens computer and of course we'll come back to Alan's computer and open his open invoice report
and unfortunately the numbers are still a little different he has five hundred fifteen hundred and
two thousand but we have a thousand fifteen hundred and fifteen hundred it must be that
there is another miss applied payment somewhere we know that for sure because the total balance
in both sets of records is still four thousand dollars so let's close out the open invoice
report and simply continue from where we left off we check the oldest payment we check the second
oldest payment now let's check the third oldest payment the February 13 payment to five hundred
dollars for Alan when we open it up we see that Alan's five hundred for February thirteenth was
applied to the oldest invoice number five in our records the February 13th payment also the third
from the bottom was instead applied to number 13 boom there's our difference again we put the $500
that Alan gave us on February 13th towards invoice number 13 but the customer put the $500 that he
gave us on February 13th to invoice number 5 if we assume the customer is correct then we have to
go back to the payment window in our computer and uncheck the wrong one which is invoice number 13
and recheck the right one which is invoice number five when we click Save and close and yes for the
change we can now see that our open invoice report for Alan matches Alan's open invoice report on his
computer take a look invoice number five is five hundred and in our records invoice number five is
five hundred in our records invoice number nine is 1500 and in Alan's records invoice number
nine is 1500 in Alan's records invoice number thirteen is 2000 and in our records invoice
number thirteen is two thousand so have confidence that no matter how messy it looks if the total
balance is correct you can definitely fix it by finding the Miss applied payment and reapplying