I have a new client. The A/R summary shows substantial transactions creating credit balances in A/R from 2003-2005. I have close to $100k in credit balances. In looking at what the prior "accountant" did I can determine the following - A journal would be booked (instead of creating an invoice) debiting A/R and crediting the income account. The customer name was noted in the memo line. When the payment was received a customer account was created and the check was received against the customer account; however, there were no invoices to post these checks against because the invoice was created with a journal entry. I now have hundreds of credit balances for customers whose payments were received against their account but they had no corresponding invoice to post these payments against because a journal entry was used to create the invoice. Any suggestions on how I can clean this up?
