Offset old vendor invoice to old payment made

Rose81 · ‎November 03, 2023

Hello,

I have many opening vendor invoices back in 2020. I have constantly made payments but did not apply to vendor invoices. Every time I run the supplier details listing, there will be a long list of opening invoices and bill payments, which I already paid a long time ago.

I want to know how to offset this without affecting my past accounts. When I use the 'make payment' function and select payments back in 2020, my AP figures in the balance sheet will be changed and this affects my current report.

jenop2 · ‎December 13, 2023

Thanks for responding to us with additional details on how the transactions were recorded, Rose81. I'll share details and guide you through the process of clearing out the open bills and applying for the payments.

The payments you have made will appear as unapplied cash bill payments, as they have not been associated with any open bills. This is particularly noticeable when running your Profit and Loss statement, as it may reflect this situation.

Most of the time, you would normally see them when:

a bill payment for a vendor is recorded before entering the bills
if you entered bill payments without matching them to bills

Follow these steps to clear them out and attach the bill payments to the open vendor invoices:

With the Profit and Loss report open, look for the section Unapplied Cash Bill Payment Expense.
Select the total amount. Take note of the vendor and amount for each bill payment in the list.
Click the + New button and select Pay bills.
If you see bills matching the bill payments in the list, select the checkboxes next to them, then click Save.

Repeat the steps for any bill payments left on the list. Let me also share these articles for additional resources when clearing them out:

Just in case you can't see an Unapplied Cash Payment account, the transactions will show as a credit in your A/P ledger. In this case, you can go back use the Pay bills feature and scroll down to the Credits section to apply the existing payment.

Please don't hesitate to reply here if you need any further assistance applying those vendor payments, Rose81. We are always happy to help ensure everything is properly recorded and accounted for in QuickBooks Online.

View solution in original post

RCV · ‎November 03, 2023

I know a way to offset the prior paid invoices of 2020 in QuickBooks Online (QBO), Rose81.

Yes, you are right. Once you apply for the payment and select it back in 2020, your Account Payable figures in the Balance Sheet will be changed and this affect your current report. To avoid this, we can record journal entries in QBO. This is the last resort for entering transactions. It will let you move money between accounts and force your books to balance in specific ways.

We can use this method only if you understand accounting. You can also find an Accountant if you need one. They'll help you on what account you need to use to balance your books. Here's how:

Click the + New Plus icon.
Select Journal entry.
On the first line, choose an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
On the next line, select the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
Enter information in the memo section so you know why you made the journal entry.
Press Save and new or Save and close.

Moving forward, we'll need to record the payment in QuickBooks once your customer makes a payment on the invoice. This connects the payment transaction to the original invoice so your accounts stay balanced. To learn more about this one, check out this article: Record invoice payments in QuickBooks Online.

For tips and other resources, I’m attaching a link to access our Self-help articles. Simply click on the topic to view the detailed list of knowledge-based information.

I'd like to know how things going after trying the steps, as I want to ensure this is resolved for you. Just reply to this post and I'll get back to you. Take care always.

Rose81 · ‎November 05, 2023

Hello, Thank you for your reply,

Sadly I could not resolve this because I have created bill payments under the same supplier without applying it to any of the opening bills in Quickbook in 2020.

My AP Account is balanced but with many opening invoices. I will start to apply the bill payments (made currently) to those opening bills. If you have a better idea, please let me know.

Thank you

DebSheenD · ‎November 05, 2023

Thanks for getting back to this thread, @Rose81.

I'm here to show you other ways to connect an old vendor bill to an old payment in QuickBooks Online (QBO).

First, may I know how you record the bill payment in QuickBooks? If you created a check affecting the AP account, you can easily link it to the open bill through the pay bill. However, if you record it differently, please share some information on how you do it in QuickBooks.

Also, please keep in mind that this can affect your financial statements, so it's best to consult with your accountant before making any modifications.

If you'd like to learn how to give your customers or suppliers their money back, you can read this article: Record a customer refund or supplier refund in QuickBooks Online.

Furthermore, QBO offers dozens of reports to help you obtain an overview of your business. This way, you'll be able to see how your sales and expenses are performing.

Please let me know if there is anything else I can assist you with, @Rose81 and I will be more than happy to help. Stay safe!

Rose81 · ‎December 12, 2023

I created the bill payment by:

1. click to the AP vendor that I am paying

2. click on any opening invoices under this AP vendor that shows 'make payment'

3. remove all the bills applied to this payment and enter the amount that I am paying

4. save and record.

This way, all my invoices are open but my AP is reduced. This is wrong as I realised all the opining invoices accumulated and affects my AP aging.

Please let me know if there is a way.

Thank you

jenop2 · ‎December 13, 2023

Thanks for responding to us with additional details on how the transactions were recorded, Rose81. I'll share details and guide you through the process of clearing out the open bills and applying for the payments.

The payments you have made will appear as unapplied cash bill payments, as they have not been associated with any open bills. This is particularly noticeable when running your Profit and Loss statement, as it may reflect this situation.

Most of the time, you would normally see them when:

a bill payment for a vendor is recorded before entering the bills
if you entered bill payments without matching them to bills

Follow these steps to clear them out and attach the bill payments to the open vendor invoices:

With the Profit and Loss report open, look for the section Unapplied Cash Bill Payment Expense.
Select the total amount. Take note of the vendor and amount for each bill payment in the list.
Click the + New button and select Pay bills.
If you see bills matching the bill payments in the list, select the checkboxes next to them, then click Save.

Repeat the steps for any bill payments left on the list. Let me also share these articles for additional resources when clearing them out:

Just in case you can't see an Unapplied Cash Payment account, the transactions will show as a credit in your A/P ledger. In this case, you can go back use the Pay bills feature and scroll down to the Credits section to apply the existing payment.

Please don't hesitate to reply here if you need any further assistance applying those vendor payments, Rose81. We are always happy to help ensure everything is properly recorded and accounted for in QuickBooks Online.

Rose81 · ‎December 14, 2023

Thank you for your reply.

However there is no unapplied cash payment expenses in my account.

I noted the payment stated it will create additional credit in my AP.

Please see my screenshot below

FritzF · ‎December 14, 2023

Hi, Rose81.

Thanks for getting back to us and for providing a screenshot. I'm here to help fix the issue you're having with the credit in your AP account in QuickBooks Online (QBO).

The steps you've taken will result in an additional credit as no bill has been applied to it. Furthermore, if you apply the payment and select it for 2020, it will impact your AP in the report.

If you prefer not to do the latter, you can generate a Journal Entry (JE). You can follow the comprehensive instructions provided by my colleague RCV above or refer to this article: Create journal entries in QuickBooks Online.

Before proceeding, I strongly recommend consulting with an accountant or accounting professional to ensure you use the correct account for this transaction. You can also find an accountant if you need one by going to this link: https://proadvisor.intuit.com/app/accountant/search?region=sg.

I'm also adding these article that tackles managing bills and bill payments for future reference: Enter bills and record bill payments in QuickBooks Online.

Please leave a comment below if you have follow-up questions about recording bill payments or anything else, Rose81. I'll be here to assist. Take care.

Topics

Training

Community

Resources

Offset old vendor invoice to old payment made