Newer versions of QuickBooks will open a dialogue box “Open Bills Exist” and older versions may tell if you have a payable due to a vendor when you are in the check writing window but this is easily overlooked. If you ignore the question and opt to select the “Continue Writing Check” button or you are using an older version of QuickBooks and erroneously create a check without using the “Pay Bills” function, you recognize the expense two times, resulting in an overstatement of expenses. There are at least three ways you can correct the error even without the Accountant’s version of QuickBooks.
The first option is the best practice, especially if you have reconciled your bank account and you want to keep the bill and related purchase order in QuickBooks.
First, you must open the check that was written by using the find function (control+F), looking in the transactions listed in the vendor center, drilling down in a QuickBooks report or opening the check register. Next, change the account to “Accounts Payable” and select the vendor in question in the “Customer: Job” cell and Save & Close. Then, open the “Pay Bills” window and enter the vendor name. You should see all of the open invoices for that vendor. Select the invoice you paid with the check and select the “Set Credits” button near the bottom center of the window. Select the corresponding credit, select the date and verify check amount is zero before selecting the “Pay Selected Bills” button on the bottom right.
This is the only other option to avoid an overstatement of expenses if you have already reconciled your bank account. You must delete the bill and purchase order, if applicable. Simply find the bill by using the find function (control+F), looking in the Vendor Center or drilling down in a QuickBooks report, select it, and use the “Delete” button near the top of your screen or delete by using the “Delete Bill” function in the Edit drop down menu. It is important that the bill was not entered in an earlier period that has already been closed.
Delete the check and pay the bill. This is a simple fix if the bank account has not yet been reconciled. You must first find the check by using the suggestions for finding the check in Option 1. Then, delete the bill as described above in Option 2. Next, use the “Pay Bills” function under the Vendors drop down menu, select vendor and be sure to select “Assign check number” in the at the bottom of the “Pay Bills” window before entering.
If you are using the Accountant’s version of QuickBooks you are able to match outstanding bills and checks under the Accountant drop down menu and select “Client Data Review”. You must then select the “Fix Unapplied Vendor Payments and Credits” option to match payments and bills.
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By Chris Hardison