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What Are the Differences Between A/R Reports In a Multicurrency Environment?

Chief Mechanic · September 13, 2010 ·

In QuickBooks 2009 there are 6 reports to provide information about what customers or clients owe to a firm. They are:

A/R Aging Summary
A/R Aging Detail
Customer Balance Summary
Customer Balance Detail
Open Invoices
Collections Report

These reports are found on the Reports->Customers & Receivables menu selection. Each report is intended to provide certain information, and in a multicurrency environment the information reported may appear to contradict information on financial statements, such as a firm’s balance sheet. The contradiction is only apparent, because by design some of these reports do not include transactions that are included in balance sheet accounts, such as General Journal entries from home currency adjustments.

In the example reports that follow, the company’s balance sheet shows a balance for Accounts Receivable – EUR (the A/R account for the 1 customer reported) of $17,500. This balance consists of a $15,000 invoice and a $2,500 exchange gain recorded as a home currency adjustment. Home currency adjustments are recorded as General Journal entries. For simplicity, we’ve filtered these reports to show a single customer. When comparing the totals on these reports to amounts reported on a balance sheet, it’s important that filter settings for the report match the balance sheet date and include all relevant transactions for a balance sheet A/R account. However, even when filters are set appropriately, the totals on these reports may not match the balance sheet because of filters that are embedded in the reports themselves that restrict the types of customer transactions reported. These embedded filters are part of the report design and can’t be changed.

The A/R Aging Summary and A/R Aging Detail reports show unpaid invoices and statement charges by billing period but do not include General Journal entries. Therefore, these reports do not match the amount reported on the balance sheet.

QuickBooks Premier 2009 Multicurrency A/R Aging Summary

QuickBooks Premier 2009 Multicurrency A/R Aging Detail

The Customer Balance Summary and Customer Balance Detail reports show all transactions related to customers. The detail report is grouped by customer and job, where the Amount column is the original transaction amount and the Balance column is the open or unpaid amount. Because these reports show all customer transactions, they will include currency adjustments posted to a customer’s account as General Journal entries. Therefore, the total shown on these reports does match the balance sheet.

QuickBooks Premier 2009 Multicurrency Customer Balance Detail Summary Report

QuickBooks Premier 2009 Multicurrency Customer Balance Detail Report

The Open Invoices report lists unpaid invoices and statement charges, grouped and subtotaled by customer and job, but it does not include General Journal entries from currency adjustments. Therefore, the total shown on this report does not match the balance sheet.

QuickBooks Premier 2009 Multicurrency Open Invoices Report

The Collections Report lists overdue invoices and statement charges grouped by customer and job, along with the customer’s contact name and phone number. Because this report only includes invoices and statement charges, it will not include currency adjustments posted to the customer’s account as General Journal entries. Therefore, the total shown on this report does not match the balance sheet.

QuickBooks Premier 2009 Multicurrency Collections Report

If your goal is to produce detail or summary reports to substantiate the amounts reported on a firm’s balance sheet, either the Customer Balance Summary or Customer Balance Detail report is the best choice, because it includes all transactions and doesn’t exclude General Journal entries. In a multicurrency environment, where General Journal entries are common, other reports may appear to contradict the balance sheet amounts because they do not include these General Journal entries.

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Why Are Items On Sales Orders Marked Closed Before Invoicing On a Partially Fulfilled Sales Order?

Chief Mechanic · September 13, 2010 ·

In QuickBooks 2009 for releases prior to R6, there was a bug (which has since been fixed) where undelivered items on a sales order that had previously been partially fulfilled had been incorrectly marked closed and could not be unchecked to be invoiced. This bug is discussed in this Intuit knowledge base article.

The bug only affects Sales Orders or Estimates that have partially invoiced line items where Unit of Measure has been enabled or where the Sales Order or Estimate contains a Group Item (with or without Unit of Measure enabled). For more information see our articles on the Unit of Measure preference and Group Items.

This bug has been corrected in the R6 release. Although the bug itself has been corrected, you may have previously entered Sales Orders or Estimates affected by the bug that will need to be fixed.

To correct the problems created by this bug, complete these steps:

Update QuickBooks to the R6 or later release
Run the Verify utility
Identify any incorrectly closed transactions
Repair those transactions
Rebuild
Re-run the Verify utility

Step 1 – Update QuickBooks to the R6 or Later Release

See our article for more information on updating your QuickBooks release.

Step 2 – Run the Verify Data Utility

To run the Verify Data utility, click the File->Utilities->Verify Data menu selection. See our article for more information on running the Verify Data utility. You’ll need to identify and correct any incorrectly closed transactions if the Verify Data utility displays this warning:

Some Sales Orders or Estimates may be incorrectly marked as closed or display incorrect invoiced quantities.

This procedure is discussed in this Intuit knowledge base article.

Step 3 – Identify Any Incorrectly Closed Transactions

If the Verify Data utility indicates that transactions were incorrectly closed, proceed to identify the affected transactions. Open the QBWin.log file in a text editor and search for Invalid Received/Invoiced Flag. Make a list of the Doc# for each affected Sales Order or Estimate. This procedure is discussed in this Intuit knowledge base article.

Step 4 – Repair the Affected Transactions

Using the list prepared in Step 3, find the first affected Sales Order or Estimate. To find a Sales Order, open the Create Sales Order window by clicking on the Customers->Create Sales Orders menu selection. Then, click the Find button and enter the first S. O. No. to be repaired.

QuickBooks Premier 2009 Create Sales Order Find

The procedure to find an Estimate is similar to that for finding a Sales Order except it starts from by clicking on the Customers->Create Estimates menu selection.

On a new blank line after the last line on the Sales Order or Estimate, enter any text at least 3 characters in length in the Description field. Save your changes by clicking the Save & New button and repeat these steps for each affected Sales Order or Estimate on the list prepared in Step 3. When you’ve repaired the last Sales Order or Estimate, you can click the Save & Close button. This procedure is discussed in this Intuit knowledge base article.

Step 5 – Run the Rebuild Data Utility

Run the Rebuild Data utility by clicking on the File->Utilities->Rebuild Data menu selection. See our article on running the Rebuild Data utility for more information.

Step 6 – Re-run the Verify Data Utility

To confirm that these steps have corrected the problem, re-run the Verify Data utility as described in Step 2 above. If the Verify Data procedure displays the warning discussed above, repeat Steps 3 through 6. If no warning appears, proceed to run inventory and sales reports to confirm that inventory data is now correct.

Prior to the availability of the R6 release, Intuit posted a description of this problem on its Wiki. See FAQ 14.

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Are There Restrictions On Making General Journal Entries To A/R and A/P Accounts?

Chief Mechanic · September 13, 2010 ·

Yes, there are a few restrictions on making General Journal Entries to Accounts Receivable (A/R) and Accounts Payable (A/P) accounts.

Normally, the preferred way to change the balance in an A/R or A/P account is by recording transactions, such as customer invoices or vendor bills. However, sometimes it’s more convenient to make a General Journal Entry. A common use of General Journal Entries to A/R or A/P accounts is to set up customer or vendor balances in a new QuickBooks company file.

If you opt to make a General Journal Entry to an A/R or A/P account, such entries are subject to these restrictions:

You can’t use more than 1 A/R or A/P account in a single journal entry
You must enter a customer name for a General Journal Entry to an A/R account and a vendor name for a entry to a A/P account

Here are some of the warnings you’ll see if you attempt to violate these restrictions:

QuickBooks Premier 2009 General Ledger Warning 1

QuickBooks Premier 2009 General Ledger Warning 2

QuickBooks Premier 2009 General Ledger Warning 3

Here’s an example of a General Journal Entry to 1 A/P account that meets the restrictions:

QuickBooks Premier 2009 GL Make General Journal Entries Accounts Payable

While not an absolute requirement, QuickBooks prefers that transactions involving A/R or A/P accounts have that account on the first line of the General Journal Entry. The first line of a General Journal Entry is the source of the transaction. Sources and targets are an important concept in QuickBooks. For more information, see our article on sources and targets.

When you record a General Journal Entry to an A/R or A/P account, the General Journal Entry will appear in the transaction list for the customer or vendor specified in either the Customer Center or Vendor Center – provided that the A/R or A/P account is on the first line of the general journal entry and is therefore the transaction source. General Journal Entries that debit (increase) A/R will be similar to a customer invoice and can be paid in a similar fashion. General Journal Entries that credit (increase) A/P will be similar to a vendor bill and likewise can be paid just like other vendor bills. However, some data fields are not filled in when recording transactions for a customer or vendor via a General Journal Entry. For example, the Terms and Due Date fields on a General Journal Entry for a vendor are left blank, as shown below. (Note: The single screenshot below shows a customized Vendor Center with the separate Pay Bills window placed on top of it to illustrate several of the points discussed in this article.)

QuickBooks Premier 2009 Vendor Center Plus Pay Bills

Beyond restrictions on making General Journal Entries to an A/R or A/P account, there are other restrictions that apply to making General Journal Entries, such as currency restrictions in multicurrency environments.

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How Does an Accountant Work With Client Data In an Accountant’s Copy File?

Chief Mechanic · September 12, 2010 ·

The Accountant’s Copy file in QuickBooks is an easy way for a company to transfer data to a third-party, such as an accountant. In an article on our blog, we’ve described how a company can easily transfer an Accountant’s Copy export file (.QBX) to us using Intuit’s secure servers. This file could be delivered via other methods, such as delivery on a flash drive or other physical media. Intuit uses the terms “export” and “transfer” to describe a .QBX file interchangeably. For simplicity, we’ll refer to this file as an export file because “eXport” serves as a better reminder of the purpose of the file extension, .QBX.

Throughout this article, we’ll refer to different file types with similar names. The function of each of these files is very specific. For more information, see our article describing the different file types in QuickBooks.

Working with an Accountant’s Copy is essentially a 5 step process:

We’ll pick up where our blog article left off: an email has been received advising that a client has sent a file, and it’s ready for download by clicking on a link provided in the email. Clicking on that link will invoke your default web browser, and prompt you to save the file to a location on your local hard disk.

Click Save and be sure to write down the location you specify.

There are 2 ways to work with an Accountant’s Copy export file (.QBX):

Convert it to an Accountant’s Copy working file (.QBA), which allows your changes to be automatically incorporated into the client’s company file, or
Convert it to a company file (.QBW), which will not allow your changes to incorporated into the client’s company file

The method you choose depends on your circumstances. Normally, you’ll want to choose the first method so that you can transmit only your changes to your client, who can then automatically incorporate those changes into his company file. If you opt to convert the Accountant’s Copy export file (.QBX) to a company file (.QBW), you’ll have to replace your client’s company file. This choice is only appropriate when the client will not record any transactions whatsoever while you perform you work. Otherwise, those transactions will be lost when you replace the company file.

Because a company file (.QBW) is the primary file for recording data in QuickBooks for Windows, the file is considerably larger than other file types. You may find that the size of the company file makes electronic transmission, especially via email, more difficult. For example, the company file containing the sample data we used in these examples is 7944 Kb, or nearly 8 megabytes, in size. By comparison, the Accountant’s Copy export file (.QBX) created from this company file to be sent to an accountant is only 328 Kb. The Accountant’s Copy import file (.QBY) containing our 1 journal entry is less than 2 Kb in size, which is about the space required for 1 transaction. If we had recorded 100 transactions resulting in a .QBY file of approximately 200 Kb, it would be easier to transmit that file via email than a file containing nearly 8 Mb of data. The size of the ultimate file to be sent to a client and the ease with which this can be accomplished are very important considerations when choosing how to use a Accountant’s Copy export file.

Method 1 – Convert a .QBX to a .QBA File

This is the preferred method to work with client data because of three principal benefits:

your client can continue to record transactions in the company file after the dividing date,
QuickBooks will record only your changes in an Accounant’s Copy import file, resulting in a much smaller file to be transmitted to the client, and
tools are in place within QuickBooks to easily document changes you made to the file.

From within QuickBooks, click File->Open or Restore Company…, select Convert an Accountant’s Copy Transfer File, and click Next. Alternately, in some editions of QuickBooks you can accomplish the same thing by clicking File->Accountant’s Copy->Open & Convert Accountants Copy Transfer File to bypass the first screen below.

You’ll see an overview of using the Accountant’s Copy export file. Click Next two times. If this task has been performed before and you opted to bypass these informational screens, you won’t see them at this point.

Since the Accountant’s Copy export file (.QBX) was encrypted, you’ll be prompted to enter the password. This password was entered by the company when it generated the export file.

Once you’ve supplied the correct password, you’ll be prompted to name the Accountant’s Copy working file (.QBA). This working file, as its name suggests, will record your changes. Later, when your work is complete, only those changes – not the .QBA file itself – will be transmitted back to the client company. If you need to close QuickBooks or close this file, you’ll re-open the Accountant’s Copy working file (.QBA) to resume your work for this client.

While you work in an Accountant’s Copy working file (.QBA), your QuickBooks title bar will display that you’re working in an Accountant’s Copy working file and the dividing date entered by the client company when the Accountant’s Copy export file was created.

Method 2 – Convert a .QBX to a .QBW File

This method is not the normal method for an accountant to complete work that will transmitted back to the client and automatically incorporated into the client firm’s company file. Nevertheless, under certain circumstances this method can provide valuable benefits. If your client will not record any transactions in QuickBooks and you can easily replace the company file in its entirety, you’ll be able to work on the client’s data without restrictions that apply to Accountant’s Copy files. Moreover, if your client’s company file has been damaged and more suitable backups do not exist, a .QBX file converted to a .QBW file can sometimes provide an effective replacement for your client’s .QBW file. Before opting to convert a .QBX to a .QBW, be sure that you have a practical method to replace your client’s company file and that your client will not record any transactions whatsoever. When you replace the client’s company file with your converted file, all transactions recorded by your client will be lost.

To convert a .QBX to a .QBW file, click the File->Utilties->Convert Accountants Copy to Company File (.QBW)… menu choice.

QuickBooks Accountants Copy Convert To QBW

Because this method should only be employed after close coordination with the client regarding who will be working on the company file, you’ll receive this advisory before continuing:

QuickBooks Accountants Copy Convert To QBW Warning

QuickBooks will proceed to convert the Accountant’s Copy export file (.QBX) to a regular company file. You can now use it like any other QuickBooks company file.

Whichever method you choose to work with an Accountant’s Copy export file (.QBX), once your work has been completed, you’ll need to transmit it to the client. If you use an Accountant’s Copy working file (.QBA), QuickBooks users another file type, the Accountant’s Copy import file (.QBY) to send only your changes to the client. In a separate article, we describe the procedures for creating an Accountant’s Copy import file (.QBY) and sending it to a client, as well as considerations to send and replace a client’s company file.

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What If a Client Working With an Accountant’s Copy Import File Receives a Message That the Import Failed?

Chief Mechanic · September 12, 2010 ·

Sometimes, a client working with an Accountant’s Copy import file (.qby) may encounter a problem when attempting to import an accountant’s changes.

In QuickBooks 2009, the import process will successfully import those changes and transactions that can be made, leaving those changes or transactions that produced an error condition. In earlier versions of QuickBooks, processing an Accountant’s Copy import file (.qby) is an all-or-nothing proposition. If any change or transaction produces an error and can’t be successfully imported, the entire import process will fail.

To resolve the import problem, you’ll need to identify the change or transaction that triggered the error, fix it, and re-attempt the import process.

Import problems fall into distinct scenarios:

An account on a check was changed to the Sales Tax Payable liability account
The tax form used by the company was changed in the Accountant’s Copy file
Unspecific problems in QuickBooks 2007 or earlier

Scenario 1 – An Account On A Check Was Changed to Sales Tax Payable

This import error is normally accompanied by a specific error message:

Object '#####-##########' specified in the request cannot be found. QuickBooks error message: Invalid argument. The specified record does not exist in the list.

It’s typically caused by changing an account on a check to the Sales Tax Payable liability account. While QuickBooks will allow an accountant to make this change, the change is accompanied by a warning. An import file (.qby) that includes such an edited transaction will not successfully import into a QuickBooks company file (.qbw).

To fix this problem, the accountant should locate the transaction in the Accountant’s Copy working file (.qba), change the account to something other than the Sales Tax Payable liability account, and generate a new import file (.qby) for the client. Once the client has successfully imported the accountant’s changes, the client can change the account.

As discussed in this Intuit knowledge base article, Intuit considers this an unresolved problem.

Scenario 2 – The Tax Form Used By the Company Was Changed In the Accountant’s Copy File

QuickBooks stores the income tax form used by the company in the Income Tax Form Used setting on the Company Information window. This window is accessed from the Company->Company Information… menu selection.

QuickBooks Premier 2009 Company Information Tax Form

If an accountant changed this setting in the Accountant’s Copy working file (.qba), it won’t match the setting in the company file, causing the import process to fail with the following message:

The 'account Tax Line Id' field has an invalid value '####'. QuickBooks error message: The tax line with the specified ID could not be found.

To resolve this, change the setting in the company file (.qbw) to match the setting that the accountant made in the Accountant’s Copy working file (.qba), which in turn has been included in the Accountant’s Copy import file (.qby). Once the settings match, the import should proceed normally.

This scenario is discussed in this Intuit knowledge base article.

Scenario 3 – Unspecific Problems in QuickBooks 2007 or Earlier

In QuickBooks 2007, an attempt to import an Accountant’s Copy import file (.qby) may produce the following error:

Import Failed. A problem was encountered when trying to import changes. Please restore the back up made before importing changes. Object specified in the request could not be found.

Unfortunately, to resolve this error, the client may need to manually enter the accountant’s changes, as discussed in this Intuit knowledge base article.

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