Can I change an AP Expense entry to a vendor payment and apply it to an existing invoice? When matching bank transactions and ADD is clicked, it creates an expense entry.

Hi there, @LeeWhite12341.

Let me share insights regarding your transaction inquiries in QuickBooks Online (QBO).

Converting your expense transactions into payment and applying it to an AP Bill is an unavailable feature in QBO. However, manually creating a payment and deleting the expense entry can help solve this matter.

To enter your bill manually, you can follow the steps below:

1. Click + New icon, then select Bill.
2. Choose a vendor from the Vendor ▼ dropdown.
3. Enter the necessary information that applies to your bill. 
4. When done, select Save and Close.

Since you added the bill manually, it will appear directly in the Unpaid tab, so you don’t need to review it. To guarantee that you won’t have duplicate transactions, we have to undo/exclude the added payment.

Furthermore, if you are trying to find a match when visiting your Banking page and find a similar transaction but with a discrepancy. You can enter an adjustment to resolve the difference.

Here’s how:

1. On the Banking page, find an item with an amount that doesn’t match the transaction you entered for it.
2. Select the item, and once the row expands, click Find Match.
3. Choose the transaction on the Match Transactions page. Enter the search criteria at the top of the table if you can't find it.
4.  Go to the bottom of the table and click the Resolve difference on the right when you select the transaction.
5. Click Add new expense for money spent; click Add new deposit for money received. A second table appears. (You might need to scroll down the page to see it.)
6.  To add an adjustment, fill out the fields in the table.
7. Click Save when done.

Additionally, I’ll be leaving you this article if you want to grasp knowledge checking if your accounts are balanced and accurate: Reconcile an account in QuickBooks Online.

Let me know if you have further inquiries about processing your transactions in QBO by hitting the Reply button. I’m just a post away.

Hi, Rainflurry.

Thank you for always sharing your knowledge here in the Community. This will surely help other users as well in the future.

Stay safe and have a good one.

So your advice is to change the general ledger account (category) on the expenses transaction from an expense to the accounts payable account/category? 

@LeeWhite12341 

"So your advice is to change the general ledger account (category) on the expenses transaction from an expense to the accounts payable account/category?"

Yes, because the expense should already be listed on the bill.  Changing the category on an Expense transaction to A/P creates a payment (debit A/P, credit bank account).  However, it will still be listed as an 'Expense' type transaction.  It's not an expense on your books anymore, that's just the type of transaction (like a deposit, check, etc.).  After changing the category to A/P, you still need to apply that payment to the bill.  Go to Pay bills (New > Pay bills) and you will have a credit.  Apply the credit to the bill and you're all set.