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Clearing out old transactions from Accounts Payable?

Forum|Forum|8 years ago
March 29, 2018
46 replies
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We need to clear down the A/R and A/P as there are some very old transactions dating back many years. We wanted to do one journal entry for everything, but I believe QBO only allows payment to specific customers/suppliers – is there any way around this?

Best answer by UKTopQuestions

Clearing old Accounts Receivable (A/R) and Account Payable (A/P) balances can be a little tricky. We can give you the information you need to get these balances taken care of, however, it would still be best to consult with your accountant to make sure what's best for you and your business.

The most efficient way to clear any payables is to pay it off. Aside from making journal entries, this includes creating a clearing account. The steps are similar to setting up a bank account in your chart of accounts, but without an opening balance.

Once you're ready, you can follow the steps below to clear off those A/P balances:

Create the appropriate journal entry:

1) Click the Plus sign (+), then choose Journal Entry.

2) In the Journal Entry window, change the date if necessary.

3) In the Account Field, choose Creditors from the drop-down list.

4) Enter the amount in the Debit field.

5)Tab to the name field and select the Supplier from the drop-down list.

6) In the next row, choose the off-setting or the clearing account in the Account field.

7) The amount in the Credit field should be equal to the amount in the Debit field.

8) Click Save & Close.

Apply the general journal entry to the existing balance:

1) Go to Expenses, and then choose Suppliers at the top.

2) Click on the supplier name, and look for the Bill to pay it.

3) Click the Make Payment button in the top-right corner. When the Bill Payment window opens, the Journal Entrywill be under the Credits section.

4) Select the Bill and the Journal Entry to link them.

5) Click Save & Close.

U

UKTopQuestionsAuthorAnswer

Clearing old Accounts Receivable (A/R) and Account Payable (A/P) balances can be a little tricky. We can give you the information you need to get these balances taken care of, however, it would still be best to consult with your accountant to make sure what's best for you and your business.

The most efficient way to clear any payables is to pay it off. Aside from making journal entries, this includes creating a clearing account. The steps are similar to setting up a bank account in your chart of accounts, but without an opening balance.

Once you're ready, you can follow the steps below to clear off those A/P balances:

Create the appropriate journal entry:

1) Click the Plus sign (+), then choose Journal Entry.

2) In the Journal Entry window, change the date if necessary.

3) In the Account Field, choose Creditors from the drop-down list.

4) Enter the amount in the Debit field.

5)Tab to the name field and select the Supplier from the drop-down list.

6) In the next row, choose the off-setting or the clearing account in the Account field.

7) The amount in the Credit field should be equal to the amount in the Debit field.

8) Click Save & Close.

Apply the general journal entry to the existing balance:

1) Go to Expenses, and then choose Suppliers at the top.

2) Click on the supplier name, and look for the Bill to pay it.

3) Click the Make Payment button in the top-right corner. When the Bill Payment window opens, the Journal Entrywill be under the Credits section.

4) Select the Bill and the Journal Entry to link them.

5) Click Save & Close.

B

Bluewaterbookkeeping66

How can I do it Desktop?

C

Charies_M

Level 9

How do you clear transactions that look like over payments?

The previous bookkeeper credit a payment larger than the bill amount, so it looks like a refund is due. It isn't, so I can only assume either other bills were paid by this check that were not entered in QB, or P&I were included in the payment. It's 5 years later, how to I clear AP and AR?

Hello there, FineCarp.

Thanks for joining this thread. Allow me to share some insights on how to clear old transactions from your accounts in QuickBooks Online (QBO).

If you wish to clear old transactions from your Accounts Payable (AP)/ Accounts Receivable (AR), you can create a clearing account in your QBO. This account is use to move money from one account to another account.

Here's how:

Go to Accounting on the left panel.
Select Chart of Accounts.
On the Chart of Accounts screen, click the New tab.
Choose Cash at bank and in hand an Account Type. You may choose any detail type you want for your clearing account.
Type in the Name for the clearing account.
Make sure you do not type in any amount on the balance before clicking Save and Close.

Once done, you can create a Journal Entry and apply the clearing account. You can follow the steps provided below:

Here's how to create a Journal Entry (JE):

Click the Plus icon.
Choose Journal Entry.
Add the AR or AP from which you are moving money.
Add the Clearing account.
Click Save.

Now you can apply the JE to the existing balance. Let me share again the steps provided by my colleague above:

Go to Expenses.
Choose Suppliers at the top.
Click on the supplier name, and look for the Bill to pay it.
Click the Make Payment button in the top-right corner. When the Bill Payment window opens, the Journal Entry will be under the Credits section.
Select the Bill and the Journal Entry to link them.
Click Save & Close.

However, I'd still recommend checking with an accountant about this for they can provide recommendations as to what account to use for debit and credit.

If there's anything else I can help you with or additional questions about the process of clearing transactions from your accounts, just let me know. I'd be more than happy to assist you further.

J

john naddour

after paying these old bills, my clearing account has now a negative balance. is that right or should it be 0 balance always?

J

jamespaul

Level 8

Hello, John Naddour.

I'll give a short overview on handling the clearing account's balances. I'm also on the case to assist you in correcting this.

The clearing account should have zero balance after moving the funds and paying the bills.

It's possible that the funds weren't enough or there were bills that aren't supposed to be paid with the clearing account.

First, you'll want to check the transaction that was used to fund the account. Here's how:

Go to the Chart of Accounts page.
Find your clearing account, then click the Account history link.
Locate the transaction used to fund the account (this can be a journal entry or a transfer transaction).
Edit the amount if needed.

Second, check the bills that were paid. To locate them easily, you'll want to pull up the Bills and Applied Payments report. Simply go to the Reports page, then type Bills and Applied Payments in the search box.

Adjust the reporting date when needed. If there's a bill that was incorrectly included in the payments, you'll want to delete the payment transaction to correct this

Here's how:

On the report, open the bill payment transaction.
Click the More menu.
Select Delete.

If multiple bills are included in a single payment transaction, simply uncheck the correct one and adjust the amount.

Since these are old bills and you're using a clearing account, I recommend contacting an accountant. They can guide you with the corrections and ensure your books are accurate.

Do you also use the Online Banking feature? If you need help managing your other transactions, you can check this article for a guide: Categorise and match online bank transactions in QuickBooks Online.

I'll be on the look out for your reply if you have more questions about the processes in QuickBooks. I'll see you around in the Community space.

A

anjum

I have old Accounts Payable balances that I need to clear off using discount received account. I tried using Supplier credit to move it to Profit and loss account into Discount Received A/c and then link the Discount received with the outstanding balances from the bill. The ledger balances shows 0 and my Profit & Loss account is also credited. However, if i check my Balance sheet, such supplier still shows the outstanding balance of exact amount. though the transaction is there but it seems to be having no effect.

I also tried to use journal to move Trade payable balance to discount received and then link the journal with the bill. Again it does reduce my liability and credit my Profit & Loss account by equal amount. Yet it still shows as open balance in Trade payables for the Supplier though the total liability is reduced by such amount.

I desperately need your expertise.

MichelleBh

Level 8

We'll have to investigate this problem safely, anjum.

I appreciate all the steps you've taken so far to resolve the supplier balances. I'll make sure that the opening balance will fix without a moment's delay.

It looks like you've already done the actions to clear off the Accounts Payable in your QuickBooks Online. Based on all the steps you take, you should no longer have an open balance in the accounts payable.

With this, I'd recommend contacting our Customer Care Team. Our experts can initiate screen sharing to view your account securely and help you from there. They are available Monday -Friday, from 8:00 AM to 10:00 PM, and Saturday -Sunday, from 8:00 AM to 6:00 PM. Make sure to contact them within business hours to ensure a swift response.

Here's how:

Go to the Help menu, then click Contact Us.
Type your concern in the box and tap Let's talk.
Choose either Call us or Start a chat.
Complete the required data and submit the request.

For more insights about managing supplier credits in QuickBooks, please refer to these articles below:

Let me know if you have any other questions or concerns by leaving a comment below. I'll be more than happy to help. Don't work to hard, anjum.

A

anjum

Thank You for your response.

After having a nightmare and an almost anxiety attack, here is what I found. so we have two trade payables accounts. While the Invoice is being recorded in, say, Trade payable (1), The offsetting Entry is adjusted in the other Trade payable Account(2). So if i check the Net trade payable (1) for the supplier it is Positive balance and if i Check Net trade payable (2) is shows Negative balance of the same Supplier.
Now i tried to look for location tracking of the supplier but i dont have that feature... Which sucks.

Now i need your expertise in this area as how to reflect the double entry through a single Trade payable account.

Really appreciate your quick response.

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