QuickBooks tries to make things easy or intuitive – but that is not always the result. For instance, entering invoices and then paying the bill later. It sounds easy and, theoretically, it should be easy. There are a lot of things that can and do go wrong – even with the experienced user. See below for some of the more common issues, errors, and situations.

There is an outstanding bill from last year. It has already been paid, needs to be removed from the bill pay window, but you are not sure what to do. Most likely when your accountant prepared the prior year’s tax return, the outstanding bill was accounted for in some way – so now it would be unwise to delete the bill. The recommended way to clear out the outstanding bill is to go to VendorEnter Bills and then create a CREDIT with the same information as the original invoice (vendor, amount, and account) using the current date. The next step is to go into VendorsPay Bills, and then select the old invoice to be paid. The credit should then be applied to the stale bill and the transaction recorded. This process clears the outstanding bill, so you don’t have to keep looking at it every time you go to pay bills, and it keeps the prior year balances true.

That’s all well and good, but what if you don’t know how to set a discount or a credit? If, as in the above example, you are clearing a transaction out or you returned items you have an invoice for, then you’d create the credit as advised above. Once you go to “Pay Bills” you select the bill you want to pay and then click the “Set Credits” button below. This will bring up all applicable credits for this vendor. From there you choose what you want and set the credits. If there isn’t a credit available, but you are paying a bill within a designated trade discount period, then you can set the discount in the “Pay Vendors” window as well.  Begin by selecting the vendor to be paid, and then click “Set Discount” below. Enter the discount allowed and then choose the account to offset with this discount. Some options may include: Other Income, creating a “Trade Discount” income account, or crediting the expense account to reduce the overall expense line item, (example: Cost of Goods Sold).

Finally, what if you need to make the payment using a different checking account or credit card? Most companies will use one account exclusively to pay bills while others may have multiple checking accounts – even paying some invoices with credit cards to increase their cash flow. If there are multiple bank accounts from which you pay bills you will need to verify the account in the drop-down list titled “Account”, and then choose the correct account for the selected payments. When using a credit card to pay the invoice, use the drop-down list under “Method” to select credit card. Once the change has been made to use credit card, then go back to the “Account” drop-down and choose from one of the previously set up credit cards.

As a quick mention, it will also be necessary to select whether to print the checks or to assign numbers for hand-written checks.

For more information, give the KTLLP QuickBooks Team a call today.  We would love to help you with the above or any other QuickBooks processing issues.