Instructions To Fix Accounts Payable Errors In QuickBooks
The best way to identify Accounts Payable errors in QuickBooks is by reviewing the Accounts Payable Aging Summary report. This report provides the user a quick snapshot of the outstanding bills of a specific date. Most of the outstanding bills should be the current one.
If you are using a bill that is older then 90 days, it may indicate an error or a transaction that requires an adjustment.
* Client writes checks after entering bills.
* Problem with applied vendor credits, they appear unapplied.
* The Accounts Payable balance is high with many old bills.
* The expenses are unreasonably high
* The bank account balance appears correct to the user
* There are number of unapplied vendor credits
If you have the old outstanding bills, they can also result in profitability or cash flow issue. If a vendor appears on a report and he has a balance of zero in the total column, it means that all the transactions are not “linked” or the credits are not applied in a proper manner.
If there are number of amounts in the > 90 days column, it means that either a data entry is wrong or there is some big issue, so you need to involve the management team to resolve it.
Fix Unapplied Vendor Payments and Credits
The Fix Unapplied Vendor Payments and Credits tool corrects accounts payable posting problems in Client Data Review. The feature has almost similar nature of work like Unapplied Customer Payments to Invoices. In this tool the checks are written to Vendors instead of bill payments being used. That is why the bills are still shownn outstanding even though the checks have been written to the vendor or the outstanding credits of vendor are available but still is not applied to the bill.
So the Checks and Vendor Credits are to be applied to bills in the same way as customer payments were applied to invoices as described in the Accounts Receivable section of this document.
Check Written Instead Of Pay Bills.
Accounts receivable issues usually arise when clients first use Enter Bills to record a due amount but then Wirte Checks are used in place of Pay Bills to pay the bills. Usually, the client would save the check in the expense account which was used to record the bill and in result the expenses will be doubled, Also the Accounts Payable acount will contain number of old and unpaid bills which in fact would be paid.
In the latest versions of QuickBooks the messaging has been improved which encourages the users to GO TO PAY BILLS, but this error may still occur.
The user needs to cionsider two items before correcting the problems-
1. Is client on the cash or the accural basis on accounting ?
2. The bank account has been reconciled or not ?
Accural Basis – No Bank Reconciliation
If you are using the accural basis of accounting and you haven’t completed the reconciliation, then the incorrect checks can be easily deleted and checks an be re-entered using the Pay Bills function. You can delete the transactions easily by using the CTRL and D key shortcut. But the user should back up all the files before making substantial changes. Also the user should print the check copies and should enable the check register to keep the copy of checks.
Too do that the checks should be reentered firstly by using the Bill Pay functions, then the duplicate checks in which bill payment is not written can be deleted. By reentering the bills you can preserve the orignal input information if it is asked while entering the bill payments.
Accural Basis- Bank Reconciliation Completed
If you are using the accural basis og accounting then the dates recorded in the bill payments and bills are critical of proper reporting. Also if the bvank reconciliation is completed and a payment to the vendor is entered as a check and not a bill payment check , deleting the check as stated in previous paragraph requires redoing of all the bank reconciliations if the transactions are affected. The process is a time consuming process, so the best solution is to change the account code on the check to Accounts Payable, also ensure that the vendor name is entered in the column entitled as Customer:Job. A credit is credited that can be linked to the bill that was created.
Step 1- Correct Coding of Check
Locate the check that was entered incorrectly in Vendor Center and update the check changing account to Accounts Payable and include the name of the vendor in the Customer:Job field as stated below.
Complete the same procedure for all the checks that are linked with the bill.
Step 2- Link Check To Bill
Now, go to Pay Bills and choose the bill you want to pay, click on Set Credits as illustrated.
In the Discounts & Credits screen, choose the proper credit , ie the edited check you just updated and apply it to the bill.
After the credit is applied to the bill, the Amount to Pay should be zero and the transactions are linked together.
Redo the same process for all the bills and checks that are to be corrected and to be linked . After the process is completed, click on Pay & Close. The ending balance of the Bank Account should not be changed.
Cash Basis- Bills Not Needed
Deleting the bills can be easily accomplished if the user maintains their accounting system to cash basis and accrual basis reports are even not used for any purpose.
Reviewing the account in which the checks are recorded is important as the information on the bills will no longer exist. Also if you are using job costing, make sure that the checks contain the job costing information and save them before deleting the bills.
The most convenient way to delete these bills is to open Accounts Payable and delete them after registering. For the registration you need to open Chart of Accounts, select Accounts Payable account and double click on that. You can also use the CTRL & D shortcut keys to quickly delete all unwanted transactions. If it’s a paid bill, a dialog box will appear with a warning message. Cancel the deletion if you see the warning message and investigate the checks that are applied against the bill.
To confirm the remaining unpaid bills in accounts payable, you need to review the Unpaid Bills Detail from Reports, Vendors & Payables. It will confirm the unpaid bills that are remaining.