The Accounts Receivable account has a negative balance

You probably specified Accounts Receivable as the account to receive customer payments and then recorded some sales. To ensure that all of your sales receipts are credited correctly, you should allocate them to an income account, not to Accounts Receivable.

If you accidentally allocate your sales to Accounts Receivable, MYOB Premier Accounting both debits and credits your Accounts Receivable account whenever you create a new invoice, and nothing is posted to your Income account. Then, when you receive customer payments on an invoice, your linked cash account (usually a checking account) is credited correctly, and your Accounts Receivable account is debited again. This creates a negative balance in Accounts Receivable. (Sales linked accounts)

If you have allocated only a few invoices to your Accounts Receivable account, it's simple to correct this problem: Simply reverse or delete the invoices and re-enter them. Make sure that you've specified the correct sales income account before you start to reenter any invoices. (To link an account)

If you've allocated numerous invoices to your Accounts Receivable account and your negative Accounts Receivable balance is very large, you'll need to use the Record Journal Entry window to correct your account balances. Make a General Journal entry to debit your Accounts Receivable account so that it shows the correct balance. Then use the General Journal to credit your sales income account with the amount of the Accounts Receivable debit. Continue to record your customer payments using the original, incorrectly allocated invoices, though. As you receive payments, MYOB Premier Accounting will continue to debit your Accounts Receivable account correctly and will also correctly increase the balance in your linked cash account.

This tip applies to: