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O
ohbeebee
August 2, 2021
Question

paying a vendor

  • August 2, 2021
  • 1 reply
  • 50 views

not sure if this is confusing or what but we have a customer that we had to bill for services for example $10,000.00  the same customer we purchased from so they are also set up as a vendor and we owed them $15,000.00.

so how do i process thru quickbooks to clear out both accounts and pay them their balance since one is in my accounts receiveable and one is in accounts payable. would i do a journal entry and write a check for the difference or how do you do this with out creating a mess

1 reply

C
Charies_M
Level 9
August 2, 2021

Thanks for giving me the opportunity to help you today, ohbeebee.

 

I can help you how to pay a vendor who is also a customer in QuickBooks Desktop (QBDT).

 

The first step is to create a Clearing Account where you can transfer your Accounts Receivable (A/R) and Accounts Payable (A/P). Below are the steps on how to do it:

 

  1. Go to Lists and choose Chart of Accounts.
  2. Click the Account button below and select New.
  3. Choose Bank as the account type.
  4. Click Continue.
  5. Enter your preferred Account Name (Example: Clearing Account, Barter Account, or Wash Account.)
  6. Fill in other necessary information and click Save & Close.

For more insights about managing accounts in QuickBooks Desktop, you can refer to this article: Create, edit, or delete account in QuickBooks Desktop.

 

Then, you can enter and pay the bill using the clearing account you just created. 

 

To Enter Bills:

  1. Go to the Vendors menu, then select Enter Bills.
  2. Fill in the required fields.
  3. Click Save to record the bill.

To Pay Bills:

  1. Go to the Vendors menu, then select Pay Bills.
  2. Select the clearing account from the dropdown.
  3. Fill in the required fields. Select Pay Selected Bills.
  4. Select Done

You might want to check out the following articles for more information about the process of entering and paying bills in QBDT:

Once done, you can manually receive your customer payments using the Receive Payment option. You can deposit them in the Undeposited Funds account to hold the funds until you're ready to deposit them. I've provided the steps below:

  1. Click the Customers tab, then Receive Payments.
  2. Enter the customer name in the Received From drop-down.
  3. In the Payment Amount field, enter the payment you received from the customer.
  4. Press the More button, then Add New Payment Method button.
  5. Set up your payment method then click OK.
  6. Mark the invoices you want to receive the payment.
  7. Hit Save & Close.

Here's an article that you may find helpful about recording invoice payment: Record An Invoice Payment.

 

Finally, make a deposit t and deposit the amount to the clearing account to zero out the balance.

 

To see the complete list of workflows and other customer and vendor-related transactions, check out the following article:

Don't hesitate to let me know if there's anything else you need help with handling payments. Have a good one.

O
ohbeebeeAuthor
August 3, 2021

Want to make sure I got this correct. I had my invoice to that customer. Then I had all the vendor bills for what we owed him entered.  I created the "cash clearing account".  I think "paid" the vendor bills posted them to that cash clearing account.  I then "received" payment of the invoice and posted it to that cash clearing account, which left me a credit balance in that account, (which it should).  I then wrote a check from our checking account for the balance and used the cash clearing account as the expense account it reflects.

it then zeros out that cash clearing account. 

I ran my balance sheet before and after, i noticed the difference between the before and after is the total amount of the vendor bills. is this correct?

L
LollyNino_CQuickBooks Team
QuickBooks Team
August 3, 2021

Thanks for giving me the opportunity to help you today, @ohbeebee. 

 

I'm here to share some information about your vendor's report. 

 

I'd recommend you change the Accounting method of the report into Cash or Accrual. The balance of the account should report based on the date you entered correctly.

 

For additional information on vendor reports, check out the following link:

Please don't hesitate to post again here if you have any other concerns. We're here to help

 

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