Writing off an A/P balance

@Rachel_S  

To make sure I understand your process, can you confirm these are the journal entries:

1) JE #1 - To record the award as A/P:

2) JE #2 - Reimbursement:

3) You then apply the $14,000 credit created by JE #2 to the $15,000 bill created by JE #1, leaving $1,000 due to grantee, correct?

4) JE #3 - To create credit to write off the remaining $1,000:

5) It's at this point, when you go to New > Pay bills, you don't see the $1,000 credit created by JE #3 in order to apply it to the $1,000 remaining A/P balance from JE #1, correct?

If I'm understanding that correctly, the credit should show up when you go to New > Pay bills.  If it's not there, the only thing I can suggest is to run an A/P aging detail report and you should see both JE #1 and JE #3 under the vendor (grantee).  Do you see them?  If not, then the vendor (grantee) must not be the same for the JE #1 and JE #3.  

@Rainflurry Thank you for this response! You are SO amazing at understanding these long written descriptions of Quickbooks things, and I deeply appreciate your willingness to take the time to help!! 

Okay, I can confirm that Journal Entries #1 and #4 are as you described. What happens with steps #2 and #3 is not in a journal setting - I just write a check, and when the "Apply to Bill" option pops up on the right-hand side of the screen, I select it and complete the check as a bill payment. Looking at the General Ledger, I can see that this transaction is then being logged as a debit to the A/P account and a credit to cash. 

And yes, after all that, when I go to New/Pay Bills, the A/P account is not showing up as having an open balance (let alone a credit,) but the Vendor shows an overdue payment (screenshot on page 2 of the document linked below).  

From my ledger, I clicked on the Bill Payment (screenshot on page one of the document linked below). I am seeing that there's a space at the bottom of the screen to enter a credit. Should I enter the write-off amount in that box? 

The A/P Aging Summary is showing only the write-off amount (page 3 in document below). 

What am I missing here? I feel like I know just enough to get myself into trouble, but not quite enough to get myself out of it!! 

Thanks again. 

 https://docs.google.com/document/d/1sNCa8kTij_u53P9ZksfHCc7KJXsyrl57RTz8_4elzJM/edit?usp=sharing

@Rachel_S  

"I am seeing that there's a space at the bottom of the screen to enter a credit. Should I enter the write-off amount in that box?"

You should be able to click the box to the left of the available credit "Journal Entry # Write-off SP24-25" on Bill Payment #3703.  That will apply the $200 credit and make the amount paid $15,000.  It will close both the "bill" from the original JE and the credit created by JE #3.    

@Rainflurry Thanks again for your help with this. I tried checking the box next to the $200 credit in the bill payment and saving, and all that did was add an open balance to the overdue payment . . . 

@Rachel_S  

The bill payment amount changed on your screenshots.  The first screenshot shows a bill payment amount of $14,800, and this new screenshot shows $14,600 - that's why you have $200 overdue.  Change the bill payment amount back to $14,800 and you should be good to go.

Oh, good catch! Unfortunately, when I made the suggested correction, it takes me back to my original issue: the A/P account is zeroed out, but the vendor is showing an overdue payment of $200, without a credit available to apply on the "Pay Bills" page.  

@Rachel_S  

You gotta type $15,000 in the 'AMOUNT' box if you're editing the bill payment.  Your screenshot shows a payment amount of $14,800, which still leaves $200 overdue.    

@Rachel_S  

One other thing: this thread started with the credit not showing when you go to New > Pay bills:

"To address this in the past, I've been able to navigate to the "Pay Bills" screen in the Vendor Center and apply the available credit from the journal entry and that clears it all out. But for some reason, the credits are no longer showing up there."

The screenshots you're posting show the available credit when you edit the bill payment.  Are you saying that same credit is still not showing when you go to New > Pay bills?

Thank you for sticking with me in this! I am tearing my hair out over here trying to figure out where I'm going wrong. 

So I tried updating the bill payment (see page one of the linked document below), changing the amount to $15,000 and then applying the payment of $14,800 and the journal entry of $200. But then it totals this to be $15,200, with a $400 credit amount, and the result is that I now have an "open balance" of -$200 and an "overdue payment" of $200 (page two in the linked document below). And nothing has ever showed up as an available credit in the New/Pay Bills area of the Vendor Center. (I linked screenshots of every entry in pages 3-4 of the linked document). 

https://docs.google.com/document/d/1fr5IvpB-xTjFTQ3oFurfuy07Kb_3pKbII7bNvVwnCmQ/edit?usp=sharing 

@Rachel_S  

Oops, my mistake!  I'm not sure I'm being much help.  I may be creating more work for you.  My apologies.

The amount needs to be $14,800, not $15,000 as you discovered.  At that point, you should be back to where you started - the vendor should show an open balance of $0 and an overdue payment of $200.  Is that what you see?  

One of your original screenshots shows an A/P Aging report with the $200 balance 91+ days overdue and the -$200 credit 1-30 days overdue.  That's what you should see and it indicates that the entries are hitting A/P properly.  I would be very surprised if you can't go to New > Pay bills and apply the credit to the overdue balance at this point.  Your most recent screenshot of the available bills and credits doesn't show the $200 open A/P balance because I incorrectly told you to change the bill payment amount to $15,000, which overpaid the bill, hence no open bill. 

In the future, it's strongly suggested that you don't use journal entries.  Journal entries are a last resort in QB and often don't work as intended.  Use bills to increase A/P balances (bills create a journal entry behind the scenes that debits the category selected on the bill and credits A/P).  Use credit memos to write off any open A/P balance (credit memos create a journal entry behind the scenes that debits A/P and credits the category selected on the credit memo).  QB is designed to work best with their transaction types: bills, bill payments, invoices, payment receipts, sales receipts, credit memos, vendor credits, etc.

No worries! Thanks so much for hanging in here with me! You are truly the very best. 

I changed it back, but, frustratingly enough, it's STILL not showing up in the Pay Bills list.  This has happened with one other grant write-off as well. I'm just scratching my head. Here's a screenshot of the current AP Detail and the Pay Bills screen. You'll note a couple of $15,000 grants in there - they're not the one we're dealing with here. 

https://docs.google.com/document/d/1kW-I6D2iuqoZr8R523ZULg2PpKdMz6Gu9fdOmO8-axQ/edit?usp=sharing

@Rachel_S  

I think I see what's happening.  When you go to Pay bills, it defaults to bills with due dates over the last 12 months.  None of your bills over a year old are showing in Pay bills.  Go to New > Pay bills, click the 'Filters' drop-down, and under 'Due Date', scroll to the bottom and select 'All dates'.  You should see it now.  

This is another reason why you shouldn't use journal entries.  They are considered due as of the date of the journal entry.  When you use a Bill, it allows you to enter a different due date and bill date.