How to use amount due to XXX inn current liability as a payment method

Hi there, 112783.

To better assist with your question about the liability account in QuickBooks Online (QBO), could you please provide some additional details? Specifically, is this an account tracking a loan or another type of liability? Getting more information about the exact type of account will help ensure we provide relevant steps and recommendations. 

Please reply back to us to share more details. Thanks. 

Please refer to the photo that I attached. For example, the receivable from subsidiary (current asset) can be used as a payment account. However, the payable to subsidiary (current liability) can't be used as a payment account. These two accounts are used to record the payment on behalf of the subsidiary.

Thank you for dropping by the Community. I see that you want to use the amount due to XXX in current liability as a payment method to settle the bill or expenses. You have arrived at the right place. I'll share information and guidelines to help you with this.

In QuickBooks Online, you cannot directly use a liability account as a payment method to settle bills or expenses. This is because liability accounts represent debts owed by the company and are not intended for use as payment accounts.

To work around this, you can create a new asset account and transfer the amount due to XXX from the current liability account to the new asset account. It will allow you to use the new asset account as a payment method to record the payment on behalf of the subsidiary. Here's how:

1. Go to Settings ⚙ and select Chart of Accounts.
2. Pick New to create a new account.
3. In the Account Type ▼ dropdown, choose an account type.
4. In the Detail Type ▼ dropdown, choose the detail type that best fits the transactions you want to track. Learn more about detail types.
5. Give your new account a name. 
6. If this is a subaccount of an existing account, select Is sub-account and then enter the parent account. Learn more about parent accounts and subaccounts.
7. Now let's ensure the account in QuickBooks matches your real-life bank or credit card account. Choose when you want to start tracking your finances. In the Balance field, enter the amount in the account, and determine the as of date. Enter today's date if you want to start tracking immediately.
8. Click Save and Close.

You can use a journal entry to transfer the amount from the current liability account to the new asset account. Debit the current liability account and credit the new asset account with the same amount. I also suggest seeking guidance from your accountant to assist you with the process of creating Journal Entries.
 

I'm adding these articles you can use in the future:

• Add an account to your chart of accounts in QuickBooks Online.
• Create subaccounts in your chart of accounts in QuickBooks Online.

By creating a new asset account and transferring the amount, you can effectively use it as a payment account while still maintaining accurate accounting records for the liability owed to XXX. If you have further QuickBooks-related concerns, I'll be around to answer them ASAP! Have a great day ahead!

I have reclassified the amount due to current assets. But I still can't choose the account when I pay the invoice.

Hello again and welcome back to the Community, 112783. I understand you are trying to use a current asset account to pay invoices to suppliers in QuickBooks Online. 

Please know that the account should be recreated as an asset account before it can be used as a payment account. 

Sometimes though, browser-related issues can cause certain functions not to work properly in QBO. This can be the reason why you're unable to use it when paying your invoices. 

Let's try some troubleshooting steps to resolve browser-related issues when working in QBO:

• Clear your browser cache and cookies to reset any outdated files or settings.
• Try a different browser like Chrome or Firefox to see if that fixes the problem.
• Disable any browser extensions that may conflict with QuickBooks.
• Ensure your browser is updated to the latest version.
• Refresh the page or reboot your computer to clear up any stuck processes.

Once you've gone through those troubleshooting steps, try going back to the supplier invoice and see if you can now select the current asset account to pay it.

Allow me to share these articles in case you need more guidance when managing supplier-related transactions in QBO:

• Manage Outstanding Balances For Customers And Suppliers In QuickBooks Online
• Enter Supplier Credits And Refunds In QuickBooks Online

 Please don't hesitate to visit us again if you have other questions for us, 112783. We want to make sure you have the tools and knowledge to smoothly manage vendor payments and record business expenses in QBO.