cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Frequent Explorer *

How to change payee for an existing, paid bill?

Hi,

It's time to do the 1099s for our contractors. Mid-way through the year, one of our consultants changed from being paid directly using his SSN to paying him through a sole proprietorship and an EIN.

 

The problem is that somehow the bills continued to be written and paid to him directly instead of using the company name he created.

 

The bills were paid via direct deposit and were more than $600 for the year.

 

How can I change the name on the bills and subsequent payments that were made from his name to his company name instead?

 

I tried deleting the payment applied to one of the bills, thinking I could then change the name of the bill payment, but QB says I must first delete it and recreate it.

 

There's about five total bills and corresponding payments involved. Should I just write down the amounts and dates for each and redo them all?

3 Comments
QuickBooks Team

Re: How to change payee for an existing, paid bill?

It's nice to have you here in the Community, gossamer. 

 

Thanks for giving me a detailed explanation about what you're trying to achieve. I'm here to lend a hand with changing the names on the vendor's bills and payments. 

 

Did you initially entered your consultant as a vendor in QuickBooks Desktop? If so, you need to create a new vendor profile, and manually change the name of the affected bill transactions. 

 

Then, create a clearing account you can use to temporarily hold the payment. Once done, transfer the payment to the newly created vendor through a journal entry. Make sure to consult with an accountant prior to doing the process to ensure accuracy with your books come tax time. 

 

Check out the steps below for each process:

 

To create a new vendor:

  1. Go to Vendors at the top menu bar, select Vendor Center
  2. In the New Vendor drop-down, click New Vendor.
  3. Enter the necessary details.
  4. Choose Save and Close

To change the name of a bill:

  1. Open the bill.
  2. Click the Vendor drop-down and select the new name.
  3. Choose Save and Close, then pick Yes

To set up a clearing account:

  1. Go to the Lists menu, then select Chart of Accounts.
  2. Right-click anywhere and choose New.
  3. In the Add New Account window, pick Bank then click Continue.
  4. From the Account Name field, you can put in Clearing Account, Barter Account, or Wash Account.
  5. Select Save & Close

To create a Journal Entry to move the funds to the Clearing account:

 

  1. Go to the Company menu, then select Make General Journal Entries.
  2. On the first line, credit Accounts Payable with the amount to be transferred.
  3. In the Name column, select the Vendor SSN from whom the fund is coming.
  4. On the second line, debit the Clearing account you've created with the same amount.
  5. Click Save & Close.

​​​​​​​To apply the amount to the Journal Entry created as an unpaid bill:

  1. Go to the Vendors menu, then select Pay Bills.
  2. Select the bill created by the Journal Entry (it will appear without a due date).
  3. Select Set Credits.
  4. Go to the Credits tab then select the credit. Select Done.
  5.  Select Pay Selected Bills.

Lastly, create a Journal Entry to move the credit from the clearing account to the vendor:

  1. Go to the Company menu, then select Make General Journal Entries.
  2. On the first line, debit Accounts Payable with the amount to be transferred.
  3. In the Name column, select the Vendor EIN who will receive the fund.
  4. On the second line, credit the Clearing account you've created with the same amount.
  5. Click Save & Close.

You should now be able to see the transferred amount in the newly created vendor, then apply it to the outstanding bill. Here's how:

  1. Open the bill, click the Pay Bill icon. 
  2. Scroll down to the button and select the Set Credits tab.
  3. In the Discounts and Credits window, pick Done.
  4. Then click Pay selected Bills.

By doing these steps, you should be able to retain those bills and payments created in the first half of the year to the SSN profile. While only moving those created during the later half to the present. 

 

Feel free to fill me in if you're referring to something different. I'll be around, anytime! 

 

 

 

Established Community Backer ***

Re: How to change payee for an existing, paid bill?

You need to Avoid JE for anything to do with names, and especially, that just bypassed the 1099 Reporting functions. The 1099 reporting is to a Name, not to the business. Just because someone changed from SSN to FEIN, if they did not also Incorporate, you already had the one name you needed. You simply needed to Update the SSN to be the FEIN. You c an add the DBA part, but Name of the person is always required. DBA in the 1099 is Optional.

So, that Company Name of the vendor is redundant and you want to Merge that to the earlier name you had, and Update the tax id info.

 

Please see my attachment. That shows what the Vendor Name Edit looks like.

Established Community Backer ***

Re: How to change payee for an existing, paid bill?

@VivienJ

 

You only set up a different Vendor name, when they changed Entity type, such as Sole Proprietorship to Corporation, or Corporation to SP. Having an FEIN is not New Vendor; it is simply a provision that someone might want to get an FEIN for purposes of no longer giving the world their SSN for security reasons; or they hired an employee and as a SP employer, you cannot run payroll under an SSN and have to obtain an EIN. And it's best to Avoid JE for AP, AR, anything to do with names, etc. At most, someone might have paid the wrong entity and you would Edit each bill and then bill payment check to relink them to the New entity name, such as a Corporation, which is not subject to 1099-Misc reporting for Box 7 under most conditions. You would leave any older payments under the old ID, though.

Need to get in touch?

Contact us