Dealing with money in without references

We have some customers who annoyingly pay cash or cheque direct into our account. It appears in our account but we don’t know who paid it (many invoices are the same value). We have been crediting it to a customer account called UNALLOCATED. At some point, we chase unpaid invoices and the customer complains they already paid and that;s when we find out who it belongs to. What is the best way to get it out of the UNALLOCATED customer (there are no invoices so QF wont issue a credit note) and credited to the correct customer. Or is there a better way to handle this? I don’t just want to leave the transaction untagged as we sometimes never find out who paid us (yep, they pay, then they forget and pay twice, we are not chasing so we never find out where the money came from!)

The best method is to create a new bank account in qf where these payments go. Then once you track the customer payment down you can tag it to an invoice and then mark the balance as a transfer to your actual account. This solves your problem.

But ultimately it would be good practise to explain to your clients that they need to inform you when they make a payment.

I’d probably leave it until year end and then account for it with a journal somewhere rather than tagging it to a “customer”.

Chase customers that haven’t paid, they’ll get the message if they are being pestered for money they’ve paid. I guess at some point there will be payments that never get allocated, you could then tag this as some sort of miscellaneous income after a set period.

Personally I would create a dummy bank account for suspense items. That way you can simply pay the invoice from the account.

How you deal with a dummy “customer” depends on how you are entering the payments.
If they are prepayments then you will need to delete the original bank account entry and then manually mark the invoice as paid which will create a new entry in the current account.
If you have created a dummy invoice for each transaction (An odd way to do things but an alternative) then delete it which will untag the bank account entry, Tag that to the correct invoice.

I have had the same problem, plus payments for small clubs coming as BACS transfers from personal accounts. Any customer that is a potential risk gets a regular statement as well.

Thanks everyone. I don’t like to leave to the year end as I like to see everything reconciled all the time. The dummy bank account is the way I would have done it except that I have automatic bank feeds. It’s a really great feature for anyone who hasn’t used it and will save you lots of time and improve accuracy, but it also limits what you can do in situations like this…for example, I can’t put the unallocated income to a dummy bank account because its going to show up in my current account due to the automatic feed :thinking:

No, I think the idea is that when you receive an unexplained deposit in your current account, don’t tag it as a pre-payment from a customer, instead you tag it as a bank transfer from the dummy bank account. So at any given time the dummy account will be overdrawn by the total amount of the unexplained deposits.

When you do finally find out which customer it was you can then either untag the original current account transaction (which will remove the matching “money out” from the dummy) and then re-tag it as the correct payment from the customer, or simply “log payment” on the invoice itself to the dummy account (which will create a “money in” to balance the “money out” transfer transaction). Either way you end up with the invoice marked as paid and the dummy account as “less overdrawn” by an equal amount.

Doh! That’s EXACTLY what I should have been doing - thanks Ian, that solves it! :grinning: