Incorrectly Applied Payments

Question

Hi,&nbsp;&nbsp;I have just taken over a company file, and have noticed that for the past 12 months, some payments have been applied to incorrect invoices. What is the best way to rectify? The previous bookkeeper suggested undoing all the bank reconciliations to delete the imcorrectly applied payment and apply it to the correct invoice - But this seems very time consuming to me.&nbsp;&nbsp;Could I just reverse the payment with todays date, and then re-apply it to the correct invoice (also todays date)? The reversals and new payments would cancel one another out in the current bank reconciliation, but I'm just wondering if this then leaves the Invoices with reversed payments as outstanding?

tracey_h · Answer

Hi&nbsp;FelicityEvelyn&nbsp;
&nbsp;
Thanks for your post. Whether you delete or reverse the payments the invoice will be reopened and show as outstanding. If you're going to reverse the payments, check the account the original payments were posted to. If they went to the Undeposited funds account, you'll need to process a Prepare Bank deposit transaction for the reversals.
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Please let me know if you need further help and good luck.
&nbsp;
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Incorrectly Applied Payments

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