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Vanaheim
July 24, 2024
Solved

Managing supplier transactions: credits, returns, bills

  • July 24, 2024
  • 2 replies
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I never imagined I'd be talking with QuickBooks help for the fourth time and still no closer to resolution of this.  For a construction company, it's fairly routine to set up a credit account with a supplier on which you buy materials and tools on credit which you will pay off later, but it would seem I'm asking them the impossible.

 

This is what I'm trying to accomplish and reflect in QuickBooks Online in Canada:

-record purchases made from a supplier on a credit account with that supplier / categorize the expense and show the amount owing that supplier in QuickBooks

-record returns to that supplier on that credit account / this should reduce the total for that expense category in QuickBooks and reduce the amount it shows that I owe that supplier

-make payments to the supplier / this should show in QuickBooks that I made a payment, reducing the amount it shows that I owe that supplier

 

Look forward to some good guidance on this.

Best answer by Accracy Accounting

Thanks for the clarification and example.

Supplier issued invoice for $100, subsequently returned $50 worth of lumber and then processed payment for $50.

 

1) Create a Bill for $100 and allocate it to Job Materials category

** Your P&L will reflect $100 as total Job Materials

2) Create a Supplier Credit for $50 and allocate it to Job Materials category

** After Setup 2, your P&L will reflect $50 as total Job Materials (Net of $100 minus $50)

2) Create a Bill Payment for $50, select $100 Bill and $50 Supplier Credit

 

Please see the screenshot.

2 replies

J
JamesM4
July 24, 2024

Hello Vanaheim, 

 

Welcome to the Community. I'll be happy to share more info so you can continue to navigate the program with ease. 

 

The program is designed to help you manage your suppliers. For recording suppler purchases, I encourage you to check out the following article that shows you how to: :Enter bills and record bill payments in QuickBooks Online. 

 

For categorizing transactions, I recommend referencing this article: Categorize online bank transactions in QuickBooks Online. 

 

For recording supplier credits, check the following article with more info on how: Enter supplier credits and refunds in QuickBooks Online. 

 

For functions that go beyond the steps in the articles above I recommend consulting with your accountant to learn more about how to accurate handle the supplier transactions. You're welcome to ask questions in the comments below. I'm here to steer you in the right direction. 

V
VanaheimAuthor
July 27, 2024

Thank you.  I did go through the articles you mentioned in detail.  I believe I am supposed to enter/categorize supplier credit transactions as "Bills".  But the problem comes up when I return goods/materials to the supplier and it is not possible in QuickBooks to enter a negative "Bill" amount.  One rep on the phone told me that I need to record these returns in QuickBooks as "Bill Payments", but it seems to me that by doing so my category expense totals in QuickBooks will not reflect my returns, ie. will show higher amounts in an expense category than in reality.

A
Accracy Accounting
July 26, 2024

I believe you are overthinking this.

As per your requirements, you simply want to raise an Accounts Payable invoice/bill. During the process of raising a bill/invoice you will get a chance to allocate a category. Since it's at a bill stage, the bill will show up in your Accounts Payable Aging report which you can review and pay as/when needed.

Let me know if you need more info.

V
VanaheimAuthor
July 27, 2024

I do think this should be simple, and I began using the Bill and allocated categories just fine.  The problem came up when needing to reflect a return of product to the supplier, which the supplier provided to me on a credit account, for which I have not yet paid.  QuickBooks does not allow me to create a negative amount on a bill.  I could reflect this return as a 'Bill Payment", but then my category amounts are inaccurate.

 

For example, I get $100 of lumber from a supplier on credit, so I create a Bill allocating $100 to Job Materials.  I return $50 of the lumber to the supplier because the lumber is too twisted or damaged to use.  If I reflect this $50 as a Bill Payment, QuickBooks still thinks I spent $100 on Job Materials, when in reality I've only spent $50.

A
Accracy AccountingAnswer
July 28, 2024

Thanks for the clarification and example.

Supplier issued invoice for $100, subsequently returned $50 worth of lumber and then processed payment for $50.

 

1) Create a Bill for $100 and allocate it to Job Materials category

** Your P&L will reflect $100 as total Job Materials

2) Create a Supplier Credit for $50 and allocate it to Job Materials category

** After Setup 2, your P&L will reflect $50 as total Job Materials (Net of $100 minus $50)

2) Create a Bill Payment for $50, select $100 Bill and $50 Supplier Credit

 

Please see the screenshot.

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