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Hello, Barry.
I'd like to shed some light on the Accounts Payable account and help you handle the offsetting transactions.
The Accounts Payable account is only used to account for the unpaid bills from your supplier. It's not used for any customer-related transactions.
I take it that you're trying to pay your bills using your customer payments. It also sounds like your customer is also your supplier.
That said, one way to offset your supplier bills using your customer payments is to use a barter transaction. This is done by creating a bank account where you would deposit the money and pay your supplier bills.
To create a barter account:
Next, record the invoice payment:
Pay or offset your bills using the customer's payment:
If you need a reference for the steps above, you can open this article: Record a barter transaction.
Though if this is just a simple transaction for bill and invoice payments, just record the customer payment normally and pay the bill. There's no need to create a barter account in this case.
Ready to close your books and reconcile your bank account? This article will guide you through the process: Reconcile an account in QuickBooks Online.
Do you have any other questions or concerns about handling common transactions in QuickBooks? Please let me know and I'd be glad to guide you with the steps and details.
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