Correct A/P from previous years

GolfNut72 · ‎August 27, 2020

My client is using QBDT Pro 2019. I have been working with him for a few years to clean up his books for the past 9 years. One area that I am now working on is Accounts Payable.

In reviewing the detail of A/P for 12/31/2019 there are several entries that are all from previous years but in different categories. I am looking for "best practices" for clearing out the A/P from previous years.

There are some Vendor credits, Bill Pmt-Check and Check entries. There is also a General Journal entry from 2009 and I will ask his current CPA how that should be handled. It's the only sizeable entry and it's a credit balance.

Here are my thoughts, please update/correct where I am mistaken -

1. Bill Pmt-Check - thought the vendor was paid, it was not connected to the bill. Delete the check and pay again, using the same info from the A/P Vendor account to clear it.

2. I have two entries that just say check, I am assuming my client wrote checks to the vendor without have a bill entered into the system. Here I would repeat step 1, but create a bill for the check being issued. Again everything is dated and numbered as the original.

3. Vendor Credit showing in A/P - create a bill and offset it against the credit.

Am I missing anything? Are there better/different steps that someone would recommend?

This group has always been very helpful and I appreciate that.

Thank you

EJ

AlexV · ‎August 27, 2020

Hello there, EJ.

Yes, you can do that! In regards to the credit memos, you'll have to check first if these are legit or not. If these were applied in real life, then you can create a bill and apply them. Otherwise, you'll want to delete them.

I'll be here if you need anything else. Have a great day!

View solution in original post

Kristine Mae · ‎August 27, 2020

I appreciate the detailed information, EJ. It made me understand your concern more. Let me help you with this.

You're not missing anything. Your steps are right. Although, I can provide another way to get around with your first and second questions.

Instead of deleting the transaction, you can link the check to the bill. Here's how:

Open the check.
Change the account to Accounts Payable, then click Save & Close.
Select Yes to confirm.
Open the bill, then click Pay Bill.
Select the bill, then click Set Credits.
Go to the Credits tab, then select the check.
Click Done, then click Pay Selected Bills.

You can do the same process in the second question without deleting the check. You'll have to create the bill only and ensure the dates are correct.

For your third question, you're on the right path. You can apply the vendor credit to outstanding bills. You can follow the steps 4-7 at the top to apply the credit.

Let me add the reference about Accounts Payable workflows in QuickBooks Desktop to better guide you.

If you have other questions, please feel free to keep in touch. We'll respond as soon as we can.

GolfNut72 · ‎August 27, 2020

Kristine Mae

Thank you for the detailed explanation but I need some further guidance.

On the checks that say Bill Pmt - Check when I open them to make the change to A/P there is no information in the Bills Paid in This Transaction section. It is blank. I'm not sure why.

My thought to correct this:

1. Copy the information from the check so you have a written record of it

2. Delete the check

3. Enter the bill

4. Pay the Bill and make sure you assign the date the original check was written and the check number

5. After completing this transaction, go back to the check register and mark the transaction reconciled.

Am I missing anything? Is there a better way?

On the items that have credits it appears that there are credit memos for all of the specific vendors but the credit was never applied to an outstanding invoice or the bill that it should be applied against was never entered but the credit was. What's the best way to resolve this? Create a bill for the credit amount and then apply it?

Thanks

EJ

AlexV · ‎August 27, 2020

Hello there, EJ.

Yes, you can do that! In regards to the credit memos, you'll have to check first if these are legit or not. If these were applied in real life, then you can create a bill and apply them. Otherwise, you'll want to delete them.

I'll be here if you need anything else. Have a great day!

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Correct A/P from previous years