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Vendor Invoice where vendor applied credit from previous month instead of issuing Check

Forum|Forum|2 years ago
December 18, 2023
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I have a supplier that most of the time sends an invoice as for a cashout that I input as a Vendor bill and clear using the pay bills feature, easy peasy. In October this vendor owed us money not for overpayment but as a cash in ( they owed for a buyback) of $137.82 so that went in as a customer invoice and goes into our sales. Instead of issuing payment for the $137.82 they applied the October Credit to our November invoice which was $2,716.21 which I put in as a bill for November. However what I actually paid was $2,578.39 because they applied the credit.

Because of the way that we report the October credit in our sales it needs to go in as a customer invoice. How would I balance this in QBO? I am sure this is a super simple question but I clearly do not have the brainpower this morning to figure it out.

Best answer by Rainflurry

@Vduff

"We have a vendor that sent us an invoice in October that did not have an amount due but instead was a credit for $137.82. We put an invoice in our system for this vendor as a customer."

You should delete the invoice and enter a vendor credit memo for $137.82 if you can. If October is closed and you can't make an entry, then make a journal entry in December: debit A/P and credit A/R and list the customer/vendor under 'Name'. You now have the A/P credit that can be applied to the new bill to reduce the amount due. Don't forget to apply the A/R credit from the journal entry to the invoice you created. Go to New > Receive payment and you will see the invoice and the credit from the journal entry. Apply the credit to the invoice to close them out.

@MariaSoledadG

Your response of "Then, receive payment on the customer invoice for $137.82 and deposit that to the newly-created Clearing Account." is a cut and paste of my post. It's incredibly sad that you need to plagiarize my posts and then take credit for it by marking the thread solved with your "answer". Myself and other community members help users on this forum on our free time. You are getting paid to help them. If you have something to add, that's fine, but don't take credit for other users work.

AlverMarkT

Good day, @Vduff.

I can suggest a way and technical input to record what your supplier owes and your bill payment in QuickBooks Online (QBO). Just a heads up, it's best to refer to an accountant before performing the following steps below to ensure you have an accurate financial record.

First, you can create two separate checks and choose the appropriate accounts to where the checks go. Here's how:

Create Check from the +New icon.
Choose the Vendor.
From the Category drop-down list,
a. Choose the appropriate income account for the first check.
b. Choose the correct expense account for the second check.
Enter the date, amount, and other necessary fields.
Hit Save and close.

Next, match the two checks with the downloaded transaction. Should there be an excess in your matching process, toggle on Resolve, choose the vendor and income account, and enter the excess as a negative amount. I suggest running a Profit and loss report after this to ensure everything is correct.

When this works for your situation, let me add this article as a reference in your reconciliation process: Reconcile an account in QuickBooks Online.

If you have follow-up questions or other QBO-related concerns, feel free to leave us a reply below. We're always here to assist. Take care.

V

VduffAuthor

So I am not writing two checks. Let me see if I can clarify:

We have a vendor that sent us an invoice in October that did not have an amount due but instead was a credit for $137.82. We put an invoice in our system for this vendor as a customer. Normally when this happens they send an ACH however they did not and we receive payment. Instead they sent our November invoice of $2716.21 with a credit of $137.82 so the total I paid via ACH was $2,578.39.

I need to understand how to receive payment on the invoice for $137.82 and then also show our payment of $2578.39.

I cannot combine the transactions they must show separately.

MariaSoledadG

Let's make sure you'll be able to record your transactions accurately, Vduff.

What @Rainflurry mentioned above is the correct way how to record your transactions. You can create a clearing account so you can deposit the amount after you have received the $137.82 payment. To create a clearing account, follow the steps below:

Click the Gear icon, and select Chart of accounts.
Click New.
Enter the necessary fields
Under Account name, enter Clearing Account.
Hit Save.

Then, receive payment on the customer invoice for $137.82 and deposit that to the newly-created Clearing Account.

Once done, open the $2,716.21 bill, then pay the bill using the clearing account with the amount of 137.82. I've added a screenshot for your reference:

Then, pay bills again using the business bank account with the remaining balance which is $2578.39.

Furthermore, after QuickBooks downloads the latest transactions, learn how you can add and categorize them in QuickBooks Online (QBO). I've added this article for more details: Categorize Online Bank Transactions In QuickBooks Online.

You can always get back to us if you have any other concerns when recording transactions. Remember, the Community is always here to cover all your concerns anytime. Have a great new year to you!

Rainflurry

@Vduff

The easiest way to do this is to use a bank Clearing Account to offset the invoice (A/R) with the bill (A/P). First, create a bank account in QB called 'Clearing Account'. Then, receive payment on the customer invoice for $137.82 and deposit that to the newly-created Clearing Account. Then pay down the vendor's bill by $137.82 out of the Clearing Account. That will zero out the Clearing Account and leave $2,578.39 due on the bill. Pay that with your regular bank account and you're all set.

I don't follow @AlverMarkT 's advice. It doesn't make any sense to me to write two checks.

V

VduffAuthor

So I am not writing two checks. Let me see if I can clarify:

We have a vendor that sent us an invoice in October that did not have an amount due but instead was a credit for $137.82. We put an invoice in our system for this vendor as a customer. Normally when this happens they send an ACH however they did not and we receive payment. Instead they sent our November invoice of $2716.21 with a credit of $137.82 so the total I paid via ACH was $2,578.39.

I need to understand how to receive payment on the invoice for $137.82 and then also show our payment of $2578.39.

I cannot combine the transactions they must show separately.

RainflurryAnswer

@Vduff

"We have a vendor that sent us an invoice in October that did not have an amount due but instead was a credit for $137.82. We put an invoice in our system for this vendor as a customer."

You should delete the invoice and enter a vendor credit memo for $137.82 if you can. If October is closed and you can't make an entry, then make a journal entry in December: debit A/P and credit A/R and list the customer/vendor under 'Name'. You now have the A/P credit that can be applied to the new bill to reduce the amount due. Don't forget to apply the A/R credit from the journal entry to the invoice you created. Go to New > Receive payment and you will see the invoice and the credit from the journal entry. Apply the credit to the invoice to close them out.

@MariaSoledadG

Your response of "Then, receive payment on the customer invoice for $137.82 and deposit that to the newly-created Clearing Account." is a cut and paste of my post. It's incredibly sad that you need to plagiarize my posts and then take credit for it by marking the thread solved with your "answer". Myself and other community members help users on this forum on our free time. You are getting paid to help them. If you have something to add, that's fine, but don't take credit for other users work.

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