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ABC Accounting Group
ABC Accounting Group, Business Consultant
Category: Financial Software
Satisfied Customers: 195
Experience:  Accounting Manager/CPA
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Can you apply a bill to an outstanding statement company?

Customer Question

Can you apply a bill to an outstanding statement for same company?
Submitted: 4 months ago.
Category: Financial Software
Expert:  ABC Accounting Group replied 4 months ago.

Hi. Is this a Quicken or QuickBooks question? Thank you.

Customer: replied 4 months ago.
Quick Books 2016
Expert:  ABC Accounting Group replied 4 months ago.

I am assuming you want to pay a vendor bill using a collectible amount from an invoice.

On QuickBooks, the payable and receivable function usually work independently. However, there is a way to do this.

You can do this by creating a journal entry that will transfer the receivable to the payable account but we need to use a 'wash account' that will serve as a holding account since QuickBooks will not allow us to simply do the transfer. The instructions here may look like a lot of steps, but I want to give you as much information as possible - this should take you less than 5 minutes or so:

To create a wash account:

  1. Go to List > select Chart of Accounts
  2. On the lower left side > click on Account > select New
  3. On the window > select Bank > name the Account as 'Wash Account' (this account will be zero out after the process)
  4. Click Save&Close

To create journal to transfer Receivable to Wash Account:

  1. Go to Company > click Make General Journal Entries
  2. Select your date
  3. Select the 'Wash Account' on the first line > put the amount in the DEBIT column
  4. Select Accounts Receivable on the 2nd line > put the amount in the CREDIT column > add the customer name on the NAME column
  5. Click Save&Close

To create journal to transfer from Wash Account to Payable:

  1. Go to Company > click Make General Journal Entries
  2. Select your date
  3. Select 'Accounts Payable' on the first line > put the amount in the DEBIT column > add the vendor name on the NAME column
  4. Select the 'Wash Account' on the second line > put the amount in the CREDIT column
  5. Click Save&Close

Apply the vendor credit created by the 2nd Journal to bill:

  1. Go to pay bills
  2. Check the Vendor bill
  3. Click on 'Set Credits' > select the CREDIT > click Done
  4. Click on 'Pay Selected Bills' (please make sure that there is no balance in the 'AMT TO PAY' column on the far right side of the pay bills window if you are just applying the credit from receivable)

Close out the receivable transaction:

  1. Go to customer payment window
  2. Select the customer name
  3. Check on the open invoice
  4. Click 'Discounts and Credits' > select the credit from the journal created
  5. Click Done
  6. Click Save&Close (make sure there is no amount on the PAYMENT column if you are just applying the credit)
Expert:  ABC Accounting Group replied 4 months ago.

Please let me know if you have any questions. If you do not then a positive rating is appreciated so I get credit for the response.

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