I applied the very 1st advice from Jane.  This worked but I had a bill due show up under pay bills because I assigned the deposit to Accounts Payable.  How do I get rid of that???

Hello there, @PinkyK.

I understand how essential it is to maintain accurate records, and I'll guide you through the steps to correct this issue promptly and efficiently.

The bill appearing as due in the Pay Bills section may likely be a result of the deposit not being associated appropriately with the bill. To fix this, let's link the bank deposit to the vendor credit accordingly. 

Here's how:

1. Click the +New button.
2. Choose Pay Bills.
3. Select the bank deposit you created. You'll see the amount of the vendor credit in the Credit Applied field. The Total payment should be US $0.00.
4. Click Save and Close. 

Additionally, I'll be providing the following articles to assist you in managing your bills in QBO:

• Enter and manage bills and bill payments
• Enter vendor credits and refunds.

Please feel free to share any additional information or questions you have about the situation, and I'll be more than happy to assist you further. Let's work together to get this sorted out and ensure your experience with QuickBooks is smooth and hassle-free.

YAY! Worked great! Thank you very much!!!!

Hi there, @PinkyK.

I'm delighted to hear that the steps provided by my colleague, Rubielyn_J, help resolve your concern in QuickBooks Online. It's always rewarding to know that our assistance has been valuable to our users.

Should you have any other inquiries or encounter further concerns related to QuickBooks Online, don't hesitate to reach out. The QuickBooks Community is an excellent platform to seek further support and advice from a knowledgeable and supportive community of users and experts.

I did all this - Created theVendor Credit; Created the Deposit using A/P; and then matched the bank deposit to the Deposit I created. Looked like it solved the problem the bank and QB match 

Hi there, Lina.

It's glad to hear that the guidance offered by my colleague above addressed your concern in QuickBooks Online. Knowing that our support has been of value to our users is truly gratifying. You can always visit our Help articles page for reference. There, you can read some helpful information that will guide you in achieving your future tasks.

In case you need assistance or have questions about using the QuickBooks product, feel free to leave a reply. Our team is always around for you.

I do this and the result is the bank deposits and vendor credits do get linked but then are put in Unapplied Cash Payment expense.

Hello, MPC6. Allow me to provide you with information about the amount in the unapplied cash payment expense.

When managing financial records, the Unapplied cash payment expense account represents a crucial tracking mechanism for unapplied vendor payments. This account functions similarly to cash payment income but on the expense side of accounting. It specifically documents cash payments made to vendors through checks that have not yet been directly linked to specific vendor bills.

Here are potential reasons for the presence of unapplied cash bill payment expenses:

• Recording a vendor bill payment before entering the bills.
• Entering bill payments without matching them to corresponding bills.

Moreover, if an incorrect amount appears in this account, you can resolve the issue by applying the bill payment to a bill with an earlier date. This process ensures accurate financial record-keeping and helps align the bill payment with its corresponding bill.

Additionally, I've included this article as a reference for reconciling your account, which will help you check if your QuickBooks is aligned with your bank and credit card statements: Reconcile an account in QuickBooks Online.

Let us know if you have other concerns with your bank deposits and vendor credits in QBO. We're always here to lend a helping hand.

I understand, but once I enter the vendor credit and go through Pay Bills to link the vendor credit and Bank Deposit should it not move out of Unapplied Cash Bill Payment and into the appropriate Category (in this case Product Sales since it was a return of a damaged item)? Both the bank deposit and the vendor credit are showing in Unapplied Cash Bill Payment Expense. The deposit is dated prior to the vendor credit. However, even changing the dates doesn't remove it from Unapplied Cash Bill Payment Expense.

This seems to be a bug in the categorization.

I appreciate your patience as we troubleshoot this issue in QuickBooks Online (QBO). From what you've described, there is an error in categorizing transactions. Let's resolve this for a smooth transaction.

We need to create Vendor Credit to make sure that we can link together both with the Bank Deposit using Pay Bills. And if we follow those instructions properly, it should not be posted in Unapplied Cash Bill Payment Expense. There are two reasons why there is an amount shown on the Unapplied Cash Bill Payment Expense account.

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

And I recommend redoing the process by deleting and reentering it.

For more details, regarding on Unapplied Cash Bill Payment Expense that shows on your transaction you can check this article to follow some steps on how to fix this: What to do if you see unapplied cash bill payment expense on your profit and loss.

In addition, you can explore these articles to learn how to track your cash flow and how to view and edit transactions with your vendors in QBO:

• How to view and edit vendor transactions in QuickBooks Online.
• Use reports to track cash flow in QuickBooks Online.

I'm here 24/7 to assist you with your Banking Transactions or any QBO-related concerns. Have a great one!

I did the whole Bank Deposit/Vendor Credit and the are linked. To help reproduce the error for you bug report here is what happened.
1) Client ordered several items totaling about $3000. Bill and Bill Payment to the vendor was all done fine and properly recorded.
2) 2 months later items arrived and one was damaged and needed to be returned. Client opted to not chose another item and get a refund. Vendor issued refund for $65 and a deposit was made to out bank.
3) Entered bank deposit per QBO instructions, categorized as AP.
4) Entered Vendor Credit, Did Pay Bills and "Paid" by linking to the deposit.

In my PnL Unapplied Cash Payment Expense says 0.00 but has both the $65 deposit and $65 vendor credit. This has nothing to do with a Bill or Bill Payment. However, when I look at the Vendor transaction log I can see QBO internally generated a Bill Payment to link the Deposit and Vendor Credit. Apparently it didn't generate an internal Bill to match. I can't create one manually and I think that is why it's putting all these things into Unapplied--due to an internal QBO error.

I've never understood why a cash or credit from a vendor has a different workflow than when they issue a credit on a credit card transaction. It's essentially the same process but made over complicated when it involves cash.

Hi there, @MPC6.

I appreciate you providing detailed information about the issue you're facing. The Unapplied Cash Payment Expense in the Profit and Loss report is due to floating bill payment transactions that aren't applied to a vendor bill.

In your scenario, you have created a deposit to an Accounts Payable account and a vendor credit. Since the deposit is categorized as an A/P account, it will offset the balance after entering the vendor credit. This will also cause your P&L report to show the Unapplied Cash Payment Expense account with a $0 amount after you paid the deposit. Here's a visual reference:

There are two options to correct this, ensuring the Unapplied Cash Payment Expense won't display in your P&L report.

The first option is whether you want to retain the vendor credit and have your future bill deducted from your current credit. You'll need to delete all transactions after paying the $3,000 bill and create a vendor credit the same as the one you created. A vendor credit transaction is enough for this situation.

The next option is whether you want a full refund of the $65 amount and deposit it to your bank. You'll also need to delete all the transactions after paying the $3,000 bill and create a deposit transaction. Ensure you categorize the deposit to an income account, such as Refund to Customer. The deposit transaction is enough for this situation and you'll never see the Unapplied Cash Payment Expense account in your Profit and Loss report.

It's also best recommended to consult your accountant to categorize your transactions to their appropriate accounts.

After categorizing everything successfully, you can consider reconciling your account to match every single record from your bank statement to your QBO records.

You're doing an excellent job keeping your transactions matched and accurate. Feel free to keep us updated with your business needs, as we are always here to assist you.

None of this works properly for accounting purposes. It still ends up in Unapplied Payments Expense. To be clear. There is no outstanding Vendor Credit. I don't want it on the books. The Vendor gave me back my money and I deposited in my bank. I just want to record that and have it apply to the appropriate Chart of Accounts.

It's a simple process. However, since you guys are "behind the scenes" creating phony bills and bill payments to accomplish this and apparently you are doing it wrong your system creates a bill payment with no corresponding bill so you then auto classify as "Unapplied". Your system is doing it wrong. The only reason I created a deposit to an Accounts Payable Account  that's the way you force me to do it so I can link it to the Vendor Credit.

I'll just do it as a journal entry for now so I don't get written up in an audit for this screwed up process for a simple concept. Case in point, you guys do it correctly for a refund going back to my credit card. I don't know why you can't do the same for a cash or check refund. It's the exact same type of transaction except of going back to a credit card it goes to a bank account. However, have a simple way for one and a convoluted way for the other--and your convoluted way is wrong from an accounting stand point.

Your statement " Ensure you categorize the deposit to an income account, such as Refund to Customer. The deposit transaction is enough for this situation and you'll never see the Unapplied Cash Payment Expense account in your Profit and Loss report." Doesn't apply here. I'm not at the point of refunding the customer yet because I'm still trying to get the refund from the vendor to ME entered correctly. Your process for refunding to a customer is also broken but that's a whole other thread.

If I only do the vendor credit and don't map it to a bank deposit it shows as a pending credit from the vendor and my books are off by the $65.