Confusion on fixing negative balance on one vendor and applying it to another.

Hi there, HilW19.

I'm here to walk you through the process of writing off a negative vendor balance so you can zero out balances on your Accounts Payable (A/P) account. 

In QuickBooks Desktop, we'll use a temporary clearing account to transfer available credits from one vendor to another.

First, let's set up a clearing account to move the existing credit from the vendor. Here's how:

1. Go to the Lists menu, then select Chart of Accounts.
2. Right-click anywhere in the Chart of Accounts then choose New.
3. Once you are in the Add New Account window, choose Bank then select Continue.
4. In the Account Name field, you can put in Clearing Account, Barter Account, or Wash Account.
5. Leave the Opening Balance field blank, then select Save & Close.

Then, create a Journal Entry to move the credit from the existing vendor to the clearing account.

1. Go to the Company menu, then select Make General Journal Entries.
2. On the first line, credit Accounts Payable with the amount to be transferred. In the Name column, select the vendor from whom the credit is coming.
3. On the second line, debit the Clearing account created beforehand with the same amount.
4. Select Save & Close.

After, apply the credit to the Journal Entry created as an unpaid bill.

1. Go to the Vendors menu, then select Pay Bills.
2. Select the bill created by the Journal Entry (it will appear without a due date).
3. Select Set Credits.
4. Go to the Credits tab then select the credit. Select Done.
5. Select Pay Selected Bills.

Then, create a Journal Entry to move the credit from the clearing account to the vendor.

1. Go to the Company menu, then select Make General Journal Entries.
2. On the first line, debit Accounts Payable with the amount to be transferred. In the Name column, select the vendor who will receive the credit.
3. On the second line, credit the Clearing account with the same amount.
4. Select Save & Close.

Once done, the balance on the old vendor will clear up and will no longer show on the aging report.

You can refer to this article: Transfer and apply credit from one vendor to another. It contains screenshots to guide you in the process.

You can also customize reports in QuickBooks to get specific information. A detailed guide can be found in this article: Customize reports in QuickBooks Desktop.

Please let us know if you have any further questions regarding writing off vendor balances in QuickBooks. We're always here to help and support you. Keep safe!