Solved

Journal Entry

Forum|Forum|2 years ago
January 3, 2024
2 replies
10 views

I had a customer with a balance. Instead of paying me direct, he paid one of my vendors. I entered the transaction as a Journal Entry. On the first line I entered by name that customer, and on the second line I entered the vendor. But when I double-checked, the customer got his balance reduced through the Journal Entry, but the vendor didn't get the credit through the Journal Entry? How could I apply that credit to go to the vendor? (I want it to be linked to this transaction - not a new entry).

QuickBooks Desktop

Best answer by Rainflurry

@MMK48

QB Desktop will not allow you to do a journal entry with A/R and A/P on the same journal entry which is what you need to do in this case.

The best way to do this is to create a bank account in QB called 'Clearing Account' and use that to offset the invoice and bill. Receive payment on the customer's invoice and deposit it to the newly-created bank Clearing Account. Then, pay down the bill by the same amount using the same Clearing Account. You now have the invoice paid and a balance remaining on the bill that you can pay. This works if the bill amount exceeds the invoice. If the invoice amount exceeds the bill, reverse the process - pay the bill and then receive payment on invoice.

C

continea

Level 5

Good afternoon MMK48,

Welcome to the QuickBooks Community! For this situation, it would be best to connect with your accountant to see what would be the best steps for your business. If you don't have an accountant, do not worry! We offer a ProAdvisor service where you can connect with experts. Some even offer a free consultation. Here's how:

Go to this Find my Accountant link.
In the Find an expert in section, choose what you're looking for, then use your search field to enter a City or ZIP code.
Select Search.
Browse through the results and find one that works best for your business. You can click on each ProAdvisor's profile to learn more information about them.

If you have any other questions, I'm just a post away. Have a wonderful day!

RainflurryAnswer

Level 11

@MMK48

QB Desktop will not allow you to do a journal entry with A/R and A/P on the same journal entry which is what you need to do in this case.

The best way to do this is to create a bank account in QB called 'Clearing Account' and use that to offset the invoice and bill. Receive payment on the customer's invoice and deposit it to the newly-created bank Clearing Account. Then, pay down the bill by the same amount using the same Clearing Account. You now have the invoice paid and a balance remaining on the bill that you can pay. This works if the bill amount exceeds the invoice. If the invoice amount exceeds the bill, reverse the process - pay the bill and then receive payment on invoice.

M

MMK48Author

Would they allow me to add another line in the same Journal Entry and somehow get it into the vendors account?

Rainflurry

Level 11

@MMK48

"Would they allow me to add another line in the same Journal Entry and somehow get it into the vendors account?"

Nope. You can make two journal entries:

#1 - Debit A/P (list vendor), credit Clearing Account

#2 - Debit Clearing Account, credit A/R (list customer)

But, then you need to apply those credits to the invoice and bill. The instructions in my first do the same thing but in fewer steps.

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded