Unapplied Cash Payment Income in QuickBooks Online

If you use cash basis accounting, you may see an Unapplied Cash Payments account in QuickBooks. This account is automatically created by Quickbooks Online for cash basis reporting. You cannot delete or change it.

You’ll never use this account directly on any purchase or sales form. 

The account is required by the IRS for proper reporting of “Constructive Receipt Income.” If you’d like to learn more see IRS Publication 538.

What is Unapplied Cash Payment Income

The Unapplied Cash Basis Income account is used to report income from customer payments that are received but not applied to any sales form (invoices, sales receipts, deposits).

Simply put – you took money in, but never declared the income on a sales form.

Here’s what it will look like on the Profit and Loss Report:

Unapplied Cash Payment Income account on the profit and loss in QuickBooks Online.

Usually, what’s happened is a payment has a date that’s before the date of the invoice date it’s applied to.

Example: Receive payment today, invoice next month. It’s “unapplied” until next month when the invoice hits the books.

Here’s an example of a transaction report showing just that:

Transaction report showing Unapplied Cash Payment Income in QuickBooks Online.

The payment was received on 1/25/23 but the invoice wasn’t created until 2/1/23.

Remove Unapplied Cash Payment Income From Your Profit and Loss

If you don’t like seeing Unapplied Cash Payment Income on your Profit and Loss you can remove it. All you have to do is change the date of the invoice to before the date of the payment. 

☕ If you found this helpful you can say “thanks” by buying me a coffee… https://www.buymeacoffee.com/gentlefrog

Below is a video if you prefer to watch a walkthrough.

If you have questions about Unapplied Cash Payment Income in QuickBooks Online click the green button below to schedule a free consultation.

Need some one-on-one QuickBooks assistance?
Share Now

This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Gentle Frog, LLC does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Gentle Frog, LLC does not warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers and viewers should verify statements before relying on them.

One Response

Leave a Reply

Your email address will not be published. Required fields are marked *

Read similar articles

How to Handle Unmatched Transactions in QuickBooks Online Reconciliation

Learn what to do with unmatched transactions when you're reconciling QuickBooks Online.

How to Erase Your QuickBooks Online Company File Data

Learn how to erase your QuickBooks Online company file data, and what to do it if it's too late.

Rachel Barnett Awarded Insightful Accountant’s Top QuickBooks Author/Educator ProAdvisor Award 2024

Gentle Frog's Rachel Barnett awarded Insightful Accountant's Top QuickBooks Author/Educator ProAdvisor Award for 2024.

Have a QuickBooks / Bookkeeping Question?

Let me know what you’d like to see in future videos, blog posts, and courses.

Review Your QuickBooks

Are you a small business owner struggling to make sense of your QuickBooks data?

  • Discover how to spot costly mistakes in your bookkeeping and fix them quickly and easily.

  • Save time and money by streamlining your bookkeeping process and reducing errors.

  • Learn how to identify trends in your financial data so you can make smarter business decisions.

  • Get organized and stay on top of your finances by tracking expenses, managing receipts, and closing your books effectively.

Sign up now for this free mini-course and start mastering the essential bookkeeping skills that every small business owner needs to succeed!

FREE Mini Course

Sign up now and enjoy the peace of mind that comes with knowing your bookkeeping is accurate, up-to-date, and free from costly errors.

We won’t send spam. Unsubscribe at any time.

Review Your QuickBooks

Are you a small business owner struggling to make sense of your QuickBooks data?

  • Discover how to spot costly mistakes in your bookkeeping and fix them quickly and easily.

  • Save time and money by streamlining your bookkeeping process and reducing errors.

  • Learn how to identify trends in your financial data so you can make smarter business decisions.

  • Get organized and stay on top of your finances by tracking expenses, managing receipts, and closing your books effectively.

Sign up now for this free mini-course and start mastering the essential bookkeeping skills that every small business owner needs to succeed!

FREE Mini Course

Sign up now and enjoy the peace of mind that comes with knowing your bookkeeping is accurate, up-to-date, and free from costly errors.

We won’t send spam. Unsubscribe at any time.