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Level 1

How do I apply a Credit related to Outstanding A/R for a Vendor with Outstanding A/P?

I work with a Company that sells products to a Vendor. In the most recent invoice provided by the Vendor, they applied the outstanding A/R that we were owed against the A/P that we owed. How would you input this into Quickbooks? See the math below and thanks in advance for any help!

 

- My Company A/R owed by Vendor: $4,300.00

- Vendor's Invoice owed by My Company: $21,500.00 - $4,300.00 (A/R) = $17,200.00 (Amount Owed by my Company) 

1 Comment
Moderator

How do I apply a Credit related to Outstanding A/R for a Vendor with Outstanding A/P?

Hello @Accounting Dad,

 

Let me help share information about how you can enter a vendor credit with an outstanding balance for both A/R and A/P accounts depending on the version of your QuickBooks. But please be informed that this entry requires creating a journal so I highly recommend contacting your accountant for professional assistance.

 

To start with, if you're using QuickBooks Desktop, you can creating a clearing account to transfer the amount from your A/R or A/P accounts. Let me show you how.

  1. Go to Lists.
  2. Select Chart of Accounts.
  3. Under Account, select New.
  4. On the Add new account window, select Bank.
  5. Enter the name of your new account. Say Clearing or Wash Account.
  6. Click Save & Close.

Once done, you'll need to create a journal entry to transfer the vendor credit you need to record. Learn more about your clearing account with this article: Set up a clearing account.

 

But if you're using the QuickBooks Online version, you go ahead and create a journal entry to transfer the vendor credit from your A/R or A/P accounts. You can read this article to learn more about how you can create a journal entry: Create a journal entry in QuickBooks Online.

 

Additionally, you can also browse for the links in the Community Help page so you be guided with the steps in recording a transaction. I've got you the links below fo easy navigation:

If there's anything else that I can help you with, please let me know in the comments below. I'll be here to lend a hand. Stay safe!

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