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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

Thank you very much for everything @Rainflurry

I sincerely apologize. So, from now on, is it better not to use JEs in QB? And as you said, it's better to use any other document (invoices, checks, credits, etc.). Just to clarify if I understood correctly. Thank you very much again.

@Luna1383

"So, from now on, is it better not to use JEs in QB?"

Use JEs only when necessary. Using bills/vendor credits are best when you want to credit/debit A/P and invoices/credit memos when you want to debit/credit A/R. JEs always work to post to your general ledger but QB can get confused by them when running reports. Also, QB cannot differentiate cash vs. accrual using JEs - they will show on both reports.

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