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I need to transfer a vendors bills that is well over a year old to long-term liability. Can someone help me do this?
Hi there, atlas_healthcare.
You can count on me to help switch a bill to a long-term liability in QuickBooks Desktop.
You have the option to create a Journal entry by debiting A/P and crediting the long-term liability account. However, this action is applicable if the bill is due in 2025 or later.
Another way is to record a bill credit with the current date and use the desired long-term liability account as the expense. Then, you can utilize the pay bills function to apply the bill credit to the bill, effectively paying it off.
In addition, you can generate various reports that offer diverse viewpoints on the performance of your business. These reports can provide detailed insights into different aspects of your business operations, such as sales, finances, and customer and vendor engagement.
If you require further assistance managing vendor bills or related matters, reply to this thread. I am here to support you at any time.
Wow, the advice given by @GlinetteC of "If you haven't already, create a long-term liability account. Then, access the vendor bill, and in the Expenses section, select the liability account for categorization. This ensures bill is correctly associated with the long-term liability account in QuickBooks Desktop." is very wrong. That advice will remove the expense from your books and create a negative balance in a long-term liability account.
Keep in mind that a long-term liability account is used for liabilities that are not due within the next 12 months. It's not for amounts that have been outstanding for 12 months or more. If you still want to move it, you can create a journal entry and debit A/P and credit the long term liability account but that's not what you want to do unless the bill is due in 2025 or later.
To do this properly, enter a bill-credit with a current date and use the desired long term liability account as the 'expense'. Then use pay bills to apply the bill-credit to the bill, paying it off.
This is a bill(s) that is older than 12 months but I am unable to pay on a regular basis. Someone told me to move it to a long-term liability and pay what you can when you can.
i have a bill(s) that are well over 12 mo's old that i am unable to pay on a regular basis. someone told me to move it/them to long-term liability and then pay what i can when i can but they did not tell me how to do it. now after reviewing the reply's here i am even more confused
"someone told me"
If that person wasn't your CPA/tax accountant, leave the bills in Accounts Payable (A/P). The problem with moving a bill out of A/P and into a long-term liability account, is that you can no longer use the Pay Bills function. That only works for bills in A/P. Again, long-term liabilities are only for debts that are not due in the next 12 months - 5 year loan payable balances, mortgages, etc.
Is there a way to do this without the bills showing on the P&L (cash basis)? I was able to create a credit and the long term liability showed on the balance sheet properly, but my client does not want the paid bills showing on the P&L?
I'll share information about the Profit & Loss report in QuickBooks Desktop, @fitbooks2019.
The Profit & Loss report summarizes your business's total income and expenses at a specific time, which means that all of your income and expense transactions (invoices, sales receipts, bills, checks, credit memo/refund) recorded in QuickBooks Desktop (QBDT) will be posted to this report.
Given the complexity of managing the Profit & Loss report in QuickBooks Desktop, it's essential to seek professional advice. I strongly recommend consulting your accountant. They can provide expert guidance on how to manage the report effectively and explore the available options for this feature.
I know that your client doesn't want the paid bills to show in a Profit and loss report. However, this option is not available in QuickBooks. Paid bills automatically reflect in the affected account. Otherwise, they will affect the total count for that period.
For more tips about running and customizing your QBDT reports, you can open these articles:
Comment below if you have any other questions about the Profit & Loss report. I'm more than happy to provide additional assistance. Have a good one!
@fitbooks2019 RE: Is there a way to do this without the bills showing on the P&L (cash basis)? I was able to create a credit and the long term liability showed on the balance sheet properly, but my client does not want the paid bills showing on the P&L?
If the bill uses an expense account then that means it will appear on the P&L, either when it is recorded on an accrual basis or when it is paid on a cash basis. There is no third option.
If the bill represents an expense, then it is correct to show the expense on the P&L (that's what it is for), even if the client doesn't want it to show up there.
If it's not an expense, but represents something the company purchased that should be an asset (for example), then it should not show on the P&L and instead should appear on the balance sheet. In that case, edit the bill and use a balance sheet account (like an asset) for the 'expense' account.
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