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kristine_crystal
February 24, 2020
Question

How to adjust payable to vendor against the receivable from customer?

  • February 24, 2020
  • 2 replies
  • 0 views

We had a balance of $50k receivable from a customer, who paid us $20k after adjusting $30k which was payable to one of the vendor as a result of an arrangement between parties. When we received cash of $20k, we reduced our receivable balance to $30k.

 

Question is how to adjust the balance receivable of $30k from the customer to balance payable of $30k to vendor?

 

Many Thanks!

2 replies

L
LauraAB
February 24, 2020

Hello kristine_crystal,

 

I can appreciate how this kind of situation would be tricky to figure out since you need to get customer-related funds to a vendor-related area. I'll go over how QuickBooks Desktop handles these things and point you in the right direction for working through this situation.

 

QuickBooks treats customers and vendors as separate entities, meaning you cannot simply place funds from one area to the other. In these instances, it usually requires a bit of accounting knowledge to properly maneuver this.

 

For that reason, I recommend not only getting in touch with an accountant, but one that knows QuickBooks Desktop. Someone who is trained in both is your best resource for working this out. If you're not already working with such a person, use QuickBooks Find an Accountant page to connect with someone near you. It's as simple as entering your city name or postal code to begin your search.

 

Accountant users here in community also chime in from time to time. Keep an eye out for input from them that may help as well.

 

Have a great week!

S
s_arm_strong_777
September 17, 2020
EX. I could use some assistance in a transaction. I have a client that I also buy marketing events from. I am using my invoicing to pay for my events. It was suggested to me, to run both invoices and receipts through the clearing account, but I’m not quite sure how to do that. The client doesn’t submit bills–should I create them? Thanks for your help.
Here’s the process for using a clearing account to offset the accounts receivable owed to you with the accounts payable owed from you, when you have a customer who’s also a vendor:

 

    1.    Go to Lists > Chart of Accounts, click on the Account button, select New and create a new bank account called Clearing Account.
    
    2.    If not entered already, enter the invoice (Customers > Create Invoices) and bill (Vendors > Enter Bills) you want to offset.  QuickBooks won’t let you use the same exact name for both a customer and a vendor so you’ll need to change them slightly

    3.    Go to Vendors > Pay Bills, select the bill you want to pay and enter the amount you want offset by what your customer/vendor owes you.  If it’s less than the entire amount of the bill, change the amount in the Amt to Pay box.  Use the Clearing Account as the account.  You may also want to use something like Offset for the Check No.

    4.    Go to Edit > Preferences > Sales & Customers > Company Preferences and uncheck the box next to Use Undeposited Funds  as the default deposit to account

    5.    Go to Customers > Receive Payments, select the customer account for your customer/vendor, enter the amount you want offset by what you owe, deposit to the Clearing Account, and select the invoice you want to apply the payment to

    6.    The Clearing Account should always have a $0 balance so make sure that the amounts you entered in Pay Bills and Receive Payments exactly match.  

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Reference (https://www.softwarediscountcenter.com/quickbooks-help/2009/07/02/ask-the-quickbooks-specialists-how-to-use-a-clearing-account-when-you-have-a-customer-who-is-also-a-vendor/#:~:text=1.,bank%20account%20called%20Clearing%20Account.&text=3.,your%20customer%2Fvendor%20owes%20you.)

L
LauraAB
September 17, 2020

Thanks for sharing that solution with the Community, @s_arm_strong_777! I love seeing these kinds of posts where everyone helps each other figure out how to best handle certain situations in their books. It still never hurts to check with an accountant, but this is a great place to get started!

 

Cheers. :)

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