Vendor Credit not reflected in balance sheet

mike-pmg · ‎January 19, 2022

Looking for some assistance from the community after working with a confused support rep who eventually just disconnected our chat on us as it became more clear that they didn't have any suggestions on how to proceed. Love the Quickbooks product, but every customer support engagement has been brutal.

My medical insurance premiums are under an account called "Medical Insurance - SimplyInsured" of type "Other Current Liabilities". The payroll deductions appropriately reflect in this account and I classify premium payments against it.

I received a statement credit in the amount of $79.65 from the insurance company which I reflected in Quickbooks as a "Vendor Credit". In the Category field on the Vendor Credit, I selected the above liability account "Medical Insurance - SimplyInsured".

In the Chart of Accounts, I see that this liability account has a balance of $79.65 and I can see the vendor credit reflected in the liability register linked from the Chart of Accounts. All good, right?

Not so fast. When I look at my balance sheet, that same account "Medical Insurance - SimplyInsured" has a balance of $0.00. And when I look at the Transaction Report linked from the Balance Sheet (Filtered by Distribution Account: Medical Insurance - SimplyInsured), the vendor credit is not present in the log.

Does anyone know why there is this discrepancy between the Chart of Accounts and the Balance Sheet? It seems to me like this is system issue where the Chart of Accounts is accurate and the Balance Sheet is inaccurate.

Thanks in advance!

Rainflurry · ‎January 20, 2022

The vendor credit is unused, correct? If that's the case, QBO is doing everything correctly. The reason for the difference is that you're on the cash basis method of accounting. The vendor credit won't hit the balance sheet until you use it. If you were on accrual, the vendor credit would hit the balance sheet as of the date of the credit memo. Click the accrual radio button when you're on the balance sheet and I'm guessing the balance will increase to ($184.27) and both the balance sheet and liability register will match.

View solution in original post

Rainflurry · ‎January 19, 2022

@mike-pmg

What is the date of the balance sheet report for your attached image?

The amount shown on the balance sheet will match the balance of the liability register on the balance sheet date. For example, if you run a balance sheet report for 11-6-20 (the date of the transaction in question), the balance in the Payroll Liabilities: Medical Insurance - SimplyInsured account will be approx. -$370.00 (I'm not able to fully see the account balance on 11-6-20 from the attached image). The $79.65 credit is in that balance.

mike-pmg · ‎January 19, 2022

Thank you for your response. I can run my balance sheet report back to the beginning of my company start and the final balance is still $0.00. I'm attaching the entire transaction report for this account as linked from the balance sheet (I've removed my business and employee names). The vendor credit is not in this transaction report and, therefore, why there is a discrepancy in the balance vs the chart of accounts in the exact amount of the credit.

Rainflurry · ‎January 19, 2022

@mike-pmg

When you're running your balance sheet report, are you using the same date in both date fields? QBO is goofy in that it gives you a date range for the balance sheet report which makes no sense because balance sheets reflect the financial position of a company at only one point in time. If you run a balance sheet report with both dates set to 11/06/20, it doesn't show ($263.92) for the balance in the liability account?

mike-pmg · ‎January 20, 2022

As of 11/6/2020, the balance sheet shows a balance of -263.92. On the same date in the liability register, the balance is -184.27. A difference of 79.65 which is the amount of the vendor credit that is not showing on the balance sheet. Images below. Thanks again.

mike-pmg · ‎January 20, 2022

Sorry, I didn't answer your question directly. When I set the both dates on the balance sheet to 11/6/2020, the balance for the account is -263.92 - the same as what the linked transaction register shows. So, it's not including the vendor credit.

Rainflurry · ‎January 20, 2022

The vendor credit is unused, correct? If that's the case, QBO is doing everything correctly. The reason for the difference is that you're on the cash basis method of accounting. The vendor credit won't hit the balance sheet until you use it. If you were on accrual, the vendor credit would hit the balance sheet as of the date of the credit memo. Click the accrual radio button when you're on the balance sheet and I'm guessing the balance will increase to ($184.27) and both the balance sheet and liability register will match.

mike-pmg · ‎January 20, 2022

Oh my goodness, I get it! I didn't realize that the act of creating a vendor credit didn't apply it. You have to credit a bill and use it as a payment toward that bill. I never created bills for this; I just categorized the charges as they came in. Thanks so much for your diligence in getting to an explanation for me. I just deleted the vendor credit as I had cleaned up the remaining dollars with a journal entry so it was serving no purpose.

FritzF · ‎January 31, 2022

That's awesome, @Rainflurry!

We appreciate you for always helping other users here in the Community space.

Stay safe and enjoy the rest of the day!

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Vendor Credit not reflected in balance sheet