Beginning Accounts payable/customers

Paolo_S · ‎February 08, 2021

Good morning,

I’m setting up a new chart of accounts as at the beginning of 2021.

Past data is in another quickbooks account so I am using the “import data” function to upload in the new account.

I have set my balance sheet accounts to start recording data as from 1/1/2021 and have entered my numbers for 2020 year end as beginning balances.

So far so good.

Problems have come out when importing vendors.

All vendors have been lumped into the “other miscellaneous expenses” account which was thus been credited and accounts payable have been debited

I guess I have to manually change the credited account so that the correct expense accounts are credited

However, in doing this QB sets the 2020 end of year vendor balance as my beginning 2021 balance in P&L (as “other miscellaneous expenses”). However not all of these expenses are to be credited in 2021, some are 2020 expenses which were not paid in 2020 but will be in 2021. They should appear in the “cash” P&L, but not in the “accrual” P&L.

The same things happens (in reverse) with my customers.

Have I missed something somewhere in my importing ? Do I have to import other pieces of data other than the vendor and customer lists ?

Thanks in advance

Paolo

JenoP · ‎February 08, 2021

Hi there, Paolo.

Can you tell us if you imported your Chart of Accounts, vendors, and customers using a spreadsheet? Since the balances are entered separately before the vendors and customers are imported, the balances will not be reported under their names. This can be the reason why the amounts were lumped into a single account.

You can create a journal entry for each vendor and customers to correct their beginning balance for 2021. Here's how:

Click the + New button and select Journal Entry.
Select the correct date in the Journal date field.
Go to the Account column and select the correct accounts (Accounts Payable and Accounts Receivable).
Enter the debit and credit amounts.
Tag the name of the customer and vendors in the Name column so the amounts will be correctly reported to the correct names.
Click Save.

After recording the entries for each vendors and customers, go back to your Profit and Loss report to check if the balances are already correct.

Let me share these articles for additional guidance:

Add a reply below or reach out to the Community again if you have follow-up questions. We'll make sure that your financial reports are correct in QuickBooks Online.

Paolo_S · ‎February 08, 2021

@JenoP , thanks for your kind reply. I read my question again and I should probably rephrase.

I imported a new chart of accounts, and my old my vendor and customer lists through excel as per the required template. Vendors and customers were a direct download from my former QB account as at 12/31/2020 and thus included the vendor/customer balance at year end.

Once I imported everything, I entered the beginning balances in my new accounts. Obviously I only entered balance sheet beginning balances as my new CoA is operating as from 1/1/2021, so there was no need to set beginning balances for P&L accounts.

When I checked the report to see everything was ok, I found out that:

1. accounts payable had beed debited correctly and balance was equal to the sum of imported vendor list as at 12/31/2020; income statement had beed credited correspondingly per single vendor however not in the correct accounts (COGS, etc.) but in a generic "other miscellaneous expenses" account

2. accounts receivable had beed credited correctly and balance was equal to the sum of imported customer list as at 12/31/2020; income statement had beed debited correspondingly per single customer however not in the "sales" accounts, but in a generic "other miscellaneous income" account.

The first part of my query is this: e.g. for expenses - in order to attribute the expenses correctly, can I simply change the JEs that the system automatically made per single vendor and instead of crediting "other misc expenses", credit "COGS, rent, etc.) ?

Basically instead of having:

Original JE: credit: Other misc Expense 100 ; debit: Accounts payable 100,

I'd manually change this to:

New JE: credit COGS 100; debit: Accounts payable 100

All I have to do is manually change the crediting part of the JE

I realize that if this is the way to go, I can solve my customer issue in the same way.

Now for the second part of my issue. Since expenses and Revenue are related to 2020 (they will only be paid for in 2021), why do I see them in my 2021 P&L ? I as thinking of neutralizing them by using retained earnings by basically doing this:

Debit Expenses 100; credit Retained Earnings 100

Credit Revenue 100: Debit Retained Earnings 100

This way, I would not have the expenses and the revenue related to 2020 in the 2021 P&L, which would apparently be correct. However, if I do so, when I look at my cash-based P&L I get nothing because when I pay I debit bank and credit payables, thus there is no movement on P&L !

Thanks in advance

Paolo

MaryLurleenM · ‎February 08, 2021

Thank you for the clarification, Paolo_S.

I can see you've figured out most of your concerns earlier. However, it's best to check with your accountant since these involve your accounts after creating a journal entry.

Your accountant will be able to guide you thoroughly in correcting these entries in QuickBooks Online.

Lastly, you can read through these articles to help resolve beginning balance issues depending on your scenario:

I'll be right here if you have other questions.

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Beginning Accounts payable/customers