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vendor payment

Forum|Forum|1 year ago
August 13, 2024
1 reply
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I received a refund from the insurance for $361.97 on 06-06-24 for a payment that should not have been made and had already been reconciled. Therefore, I made a journal entry: Dr. Bank $361.97 / Cr. A/P $361.97 so that it would appear again in my vendor account as a debt, increasing my payable amount for the vendor.

Subsequently, a payment of $336.97 was made, which needed to be applied to that journal entry. When I made the payment, I wrote a check and applied it to the journal entry of $361.97. It was applied, but when I checked the journal entry in the vendor account, it still shows the entire amount of $361.97 as an open balance. I don't understand why the amount wasn't reduced, as I applied the $336.97 check to this journal entry.

I would greatly appreciate it if someone could please help me.

QuickBooks Desktop

Best answer by FishingForAnswers

@Luna1383 I am not clear on why you used A/P in the Journal Entry (JE). If they gave you a refund for a payment you did not owe them, there seems to be no reason to re-assume a debt to them.

Using the relevant Insurance Expense in place of the A/P account in the JE would have sufficed.

If you owed $336.97 to them, a bill should have been created for said $336.97 payment to be applied to.

Maybe I'm missing something, though.

FishingForAnswersAnswer

Level 4

@Luna1383 I am not clear on why you used A/P in the Journal Entry (JE). If they gave you a refund for a payment you did not owe them, there seems to be no reason to re-assume a debt to them.

Using the relevant Insurance Expense in place of the A/P account in the JE would have sufficed.

If you owed $336.97 to them, a bill should have been created for said $336.97 payment to be applied to.

Maybe I'm missing something, though.

L

Luna1383Author

I'm sorry, maybe I didn't explain myself well. Initially, an invoice for this expense was created for the total amount of the insurance, $5,493, and monthly payments are being made. A payment of $361.97 was made on 05-18-24, and subsequently, we received a refund of this amount on 06-06-24. Since the payment made in May had already been reconciled...I made a journal entry for this refund received: Dr. Bank $361.97 / Cr. A/P $361.97 so that it would appear again in my vendor account as a debt, increasing my payable amount for the vendor.

Subsequently, a new payment of $336.97 was made on 06-11-24, which needed to be applied to that journal entry. When I made the payment, I wrote a check and applied it to the journal entry of $361.97. It was applied, but when I checked the journal entry in the vendor account, it still shows the entire amount of $361.97 as an open balance. I don't understand why the amount wasn't reduced, as I applied the $336.97 payment to this journal entry. Currently, the original invoice has an outstanding balance of $1,355.63 due to the payments already made to this invoice. Including the journal entry I made for $361.97, the debt increases to $1,717.60.

Rainflurry

Level 11

@Luna1383

The Vendor Open Balance report you posted shows the payment was applied to the journal entry (JE) so everything is working properly, except the erroneous amount in the open balance column under the vendor. QB struggles with JEs sometimes as they are not the preferred way to make entries. Anytime you can use a form (invoice, bill, credit memo, etc.) instead of a JE, it's best to do so. I have random instances where JEs don't even show under the vendor. In the future, for situations like this, it's best to create a bill and on the Expense tab, enter your bank account. That will do the exact same thing as a journal entry that debits cash and credit A/P but QB will handle it better.

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