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Accounting4050-2020
Level 1

Negative Accounts Payable Balance

I am trying to clear out some old negative 2015 accounts payable balances in Quickbooks Desktop Enterprise.

Example:

Vendor A has a -$29.29 balance.

    The original bill was $104.39, however $133.68 was paid leaving an overpayment of $29.29 which Vendor A refunded.

   The prior bookkeeper deposited the $29.29 refund and applied to Misc. Income rather than to the original bill.

   The $29.29 should have been applied to A/P and the refund credited to the client expense account.

 

How do I fix this?  

 

Thank you.

1 Comment
ZackE
QuickBooks Team

Negative Accounts Payable Balance

Hey there, Accounting4050-2020. You've come to the right place to find an answer.
 

Thanks for the details about what caused the negative balance. I'll help you fix this. The first step is removing the incorrect record. You can access your chart of accounts, open the Misc. Income account, locate the invalid entry and delete it.
 

Once you've finished, you can proceed with recreating it. I'll guide you through how it's done:

  • Enter a Deposit of the vendor check

1. In the navigation bar at the top, go to Banking, then Make Deposits.
2. If a Payments to Deposit window displays, press OK.
3. Open the Received from drop-down and choose the vendor.
4. Access the From Account menu and choose the appropriate Accounts Payable account.
5. Locate the Amount section. Enter the refund amount.
6. Hit Save & Close.
​​​​​​

  • Input a Bill Credit for the refunded amount

1. In the top menu bar, go to Vendors, then Enter Bills.
2. Type the Vendor name.
3. Open the Expenses tab and enter any accounts associated with your original bill.
4. Input the appropriate numeric values for each Account (amounts might have to be prorated) in the Amount column.
5. Select Save and Close.
 

  • Connect both records

1. Use the menu bar at the top to open the Vendors drop-down, then pick Pay Bills.
2. Tick the checkbox for the deposit that matching your check amount.
3. Hit Set Credits and apply the Bill Credit you created earlier.
4. Click Done.
5. Select Pay Selected Bills, then Done.

Now your accounts payable balance will no longer be negative and the refund will be entered properly.

You can find more information about recording refunds from vendors in the following article: Record a vendor refund in QuickBooks Desktop

If you have any other questions, please feel welcome to reach out to me anytime. Have a great day!

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