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Drisc8
June 8, 2020
Question

AP converting to a long term note

  • June 8, 2020
  • 2 replies
  • 7 views

I have several invoices that include inventory that my vendor is wanting to convert to a long term note.   How do I get them out of AP and into the liability account?

2 replies

S
Steve_C
June 8, 2020

Hi Drisc8. The best way to do this would be to set up a loan in QuickBooks Online. Check out this article for a comprehensive guide on how to record loans. The article will guide you through the proper way of keeping track of your long-term liabilities.

 

To remove the amounts from you A/p you will simply delete the transactions. If you're not sure whether you should delete or void the transactions, the article on voiding and deleting transactions will be a huge help to you.

 

If you have any other questions feel free to leave a reply below and I'll be happy to get back with you. Have a great day.. 

Rustler
Rustler
Level 15
June 9, 2020

@Drisc8 

 

NO, do not delete the transactions as @Steve_C  says, doing that will remove the inventory from stock, and if you sold any will drive your inventory asset account negative

 

create the long term liability account
bring up the vendor bill, enter the liability account in the expense section and enter the bill total amount as a negative number. The bill should now show a zero balance, if so save and pay down the liability in the future

    T
    thomas4
    June 9, 2020

    @Rustler, I was going to suggest journaling the relevant amount out from A/P to the LT liability account, and then "paying" the bill with that transaction thereby marking it as paid. Arithmetically I think that achieves the same effect as your method, but yours seems cleaner[1]

     

    Would you also use your method where the bill did not have inventory items -- a purchased service for example? Obviously your comment about driving the inventory asset account negative then would not apply, but I don't see why that would matter. I definitely don't like the deletion approach that @Steve_C  suggested!

     

    Thomas

     

    [1] Not least because it avoids using the journal which QB Online (unlike ye olde QB Desktop) seems very confused about, in terms of how to display journal entries within a Supplier's transaction list.

     

     

     

    Rustler
    Rustler
    Level 15
    June 10, 2020
    @thomas4 wrote:

    @Rustler, I was going to suggest journaling the relevant amount out from A/P to the LT liability account, and then "paying" the bill with that transaction thereby marking it as paid. Arithmetically I think that achieves the same effect as your method, but yours seems cleaner[1]

     

    Would you also use your method where the bill did not have inventory items -- a purchased service for example? Obviously your comment about driving the inventory asset account negative then would not apply, but I don't see why that would matter. I definitely don't like the deletion approach that @Steve_C  suggested!

     

    Thomas

     

    [1] Not least because it avoids using the journal which QB Online (unlike ye olde QB Desktop) seems very confused about, in terms of how to display journal entries within a Supplier's transaction list.

     

     

     

    Yes, that method will work for any transaction, regardless of it being inventory or just an expense.

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