Most Common Quickbooks Mistakes: Accounts Payable Errors 40

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The quickest and easiest way to identify Accounts Payable errors in QuickBooks® is from a review of the Accounts Payable Aging Summary report. The Accounts Payable Aging Summary report provides a quick snapshot of the outstanding bills as of a specific date. Most of the outstanding bills should be relatively current. An aged bill in the >90 days may indicate an error or a transaction that requires an adjustment.


  • Client enters bills and then writes checks
  • There are unapplied vendor credits


  • Accounts Payable balance is high with many aged bills
  • Expenses seem unreasonably high
  • The bank account balance appears correct
  • Numerous unapplied vendor credits

Consistently old outstanding bills can also indicate a profitability or cash flow issue. A vendor that appears on the report and has a zero balance in the total column indicates that all transactions have not been “linked” or credits have not been applied properly.

Excessive amounts in the >90 days column is an indication of either a data entry issue or a larger issue that would require involvement of the management of the business.


Fix Unapplied Vendor Payments and Credits
In Client Data Review, the Fix Unapplied Vendor Payments and Credits tool corrects accounts payable posting problems. This feature works similar to the Unapplied Customer Payments to Invoices. Here, checks have been are written to Vendors instead of bill payments being used. Therefore, bills are still shown as outstanding even though checks have been written to the  vendor or outstanding vendor credits are available but have not been applied to the bill. Checks and Vendor Credits are applied to bills in the same fashion 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 often arise when clients first use Enter Bills to record an amount due  but then use Write Checks instead of Pay Bills to pay these bills. Typically, the client would record the check to the same expense account used when the bill was recorded resulting in expenses being doubled. The Accounts Payable account would also be overstated and contain numerous old, unpaid bills which had in fact been paid.

Messaging has been improved in the latest versions of QuickBooks, encouraging users to Go To Pay Bills, however, this error may still occur. Two items to consider before deciding how to correct the problem are, first whether the client is on the cash or accrual basis of accounting and second whether or not the bank account has been reconciled.


Accrual Basis – No Bank Reconciliation
If the client uses the accrual basis of accounting and the bank reconciliation has not been completed, the incorrectly entered checks can be simply deleted and the checks re-entered using the Pay Bills function. Deleting transactions quickly is easy using the CTRL-D shortcut. Backing up the data file before making substantial changes is always encouraged. Also, a check register should be printed or check copies should be available to enable rerecording of the checks. The checks should first be reentered using the Bill Pay functions, then the checks appearing as a duplicate, not written as a bill payment can be deleted. Reentering the bills first will preserve the original input information, if it is needed, while entering the bill payments.

Accrual Basis – Bank Reconciliation Completed
For clients who use the accrual basis of accounting, the dates recorded on bills and bill payments are critical for proper reporting. If a payment to a vendor has already been entered as a check, not a bill payment check, and the bank reconciliation has been completed, deleting the check as described above will require redoing all of the bank reconciliations as far back as transactions are affected. This can be a very time consuming and tedious process. For this reason, the best solution is to change the account code on the check to Accounts Payable, ensuring that in the column entitled Customer:Job the vendor name is entered. A credit is created that can then be linked and offset to the bill that was created.

Step 1 – Correct Coding of Check
In the Vendor Center, locate the check that was entered incorrectly and edit the check changing the account to Accounts Payable and including the vendor name in the Customer:Job field as illustrated below.


Record the change. Complete this same procedure for all checks that should be linked to a bill.

Step 2 – Link Check to Bill
Next, go into Pay Bills and select the appropriate bill to pay and click on Set Credits as shown below.


Within the Discounts & Credits screen, select the appropriate credit, which will be the check that was just edited, to be applied to the Bill. (Note that the check number is in the reference field).


The credit will be applied to the bill and the Amount to Pay will then be zero. The transactions are then linked together.

Continue this process for the bills and checks that have been corrected and need to be linked. When the process is complete for all the transactions, click on thePay & Close button. The Ending Balance for the Bank Account will not change.

A dialog box will appear that affirms that no checks will be generated.

Cash Basis – Bills Not Needed
If the client maintains their accounting system on the cash basis and accrual basis reports are not used or needed for management, historical or any other purpose, deleting the bills is easily accomplished. A review of the accounts to which the checks are recorded is recommended as the information recorded on the bill will no longer exist. If the client uses job costing, ensure the checks also have the job costing information recorded before the bills are deleted.

The easiest way to delete the bills is to go to the Accounts Payable register and delete them. The Accounts Payable register can be opened by going to the Chart of Accounts, selecting the Accounts Payable account and double clicking. Use the CTRL-D shortcut to quickly delete the unwanted transactions. If the bill has been paid, a dialog box appears with a warning message. If the warning message appears, cancel the deletion and investigate the checks applied or partially applied against the bill.


A review of the Unpaid Bills Detail report from Reports, Vendors & Payables, Unpaid Bills Detail can confirm that the remaining unpaid bills are what should be remaining in accounts payable.

Printing 1099-MISC Forms
Clients often have difficulties printing 1099-MISC forms. The process is simple and easily performed.

1. First, as vendors are established, their Federal ID numbers should be entered on the second tab of the Vendor Information. If the Vendor Eligible for 1099 box is checked, then a Federal ID number, either a Social Security Number or an Employer Identification Number must be entered before the Vendor can be saved.


2. Second, the accounts to which payments are made and for which 1099s should be generated must be identified. Under Preferences, the Tax:1099 option is opened and the accounts to which payments are made that should be reported on the 1099-MISC are selected. While currently these mostly include Labor and Rent accounts, legislation as currently enacted will require reporting of a wider class of payments to more vendors in future periods. If 1099-MISC forms are required to be sent to vendors for more than just labor or services in the future, additional accounts will be added in this section.


3. To print the 1099-MISC forms, from the Vendor menu, select Print 1099s/1096.


4. The 1099 and 1096 Wizard will be displayed and will step you through the process of generating the 1099 forms. Proper set up of the Vendors and mapping of the accounts will aid in resolving some of the issues that occur when trying to print 1099s.


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40 thoughts on “Most Common Quickbooks Mistakes: Accounts Payable Errors

  • Raam

    Hi Guys,
    i cannot find an answer to my problem – i have Q.B Pro from 2002.
    for some reason, when i create statements, the amounts showing under Current / 1-30day past due / 30-60 past due – are WRONG.

    so, for example, i need 1Aug-31Aug Invoices, to reflect under CURRENT.
    i need them to age by the month they belong to, not from the date they were created.

    Please Help (most of my friends tell me to move to Pastel)

    Raam Tselon

    • Peter

      There are three dates:
      The first is “Statement Date”
      The second is “From Date”
      The third is the “To Date”

      Whatever you want to have “current” needs to be in the “Statement” and “To” date fields.

      I am not certain what you mean by:
      “I need them to age by the month they belong to, not from the date they were created.”
      You want the invoices to belong to a different month than the one you created them in? Being past-due is delegated by the due-date, which stems from the creation date plus whatever terms you have setup for your invoice (If it is “net 30,” it will be “Current” for 30 days after creation).

      Thanks for your comment. I hope some of this was helpful and didn’t muddy the waters.

  • Connie

    I have an issue with the accounts payable when I duplicate a bill, the terms (randomly) do not calculate correctly. It will show due in 10 days, even though the vendor is set up with terms of 30 days.

    If I go back into the bill and click on the 30 days (vs. net 30) it will re-calculate correctly. I have found if I set the terms net 30 I continue to have the same issue and it will “fix” and calc. correctly if I switch to 30 days.

    The only consistency to this error is it happens when I use the duplicate feature in entering bills to be paid. However, it does not happen on a consistent basis.

    • Peter

      I would first go to your terms list. Edit the Net 30 Term that you are concerned about and see if it is really set to 30 Days. If it is, change it to another value, save it, then re-edit it to 30 Days and save it again. Sometimes if a certain setting in QB doesn’t seem to be working correctly, saving it as something else and then changing it back will iron it out. Let us (QB Services) know if this works, or if there is any way we can further help: 952-232-6388

    • Peter

      This is not a functionality inherent in QB out of the box. However, our company does custom programming and reporting using hooks in the QuickBooks SDK. So if this type of reporting is important to you, you can give us a call and we can work something out. Thanks for the post!

  • Susy

    I am using QB online and I received a Credit card bill with a negative balance to pay due to an earlier overpayment. QB is not letting me out of the screen because of the negative value. How do I enter this?

  • Bob Winiecki

    I have QB 2011 Pro. In 2013, I hired subcontractors. I have set them up with their names, addresses, socials and clicked eligible box for 1099. I haves set the preferences for payroll non-employee. When I run a report, it says I have no eligible vendors for form 1099. I go back and check the vendor list and it says “yes” as eligible for a form 1099. What gives? Help any body!!!!

    • Jay Thompson
      Jay Thompson Post author

      Hi Bob –

      I noticed in your statement that you said, “I haves set the preferences for payroll non-employee”. First, if these are 1099 contractors, then they should be considered as “Vendors” and not “Employees”. So you really should set them up as vendors in QuickBooks. You will need to create each of them as a Vendor and name them slightly different than you have them in the employee area; I would recommend that you save them with an “_V” after the name. Then you will need to go into each transaction and select that vendor in the “Pay to the order of” field. Once all the transactions have been updated, you can delete the vendors you set up in the employee list.
      Then you need to define which accounts you are using to track sub-contractor expenses in. In order to do this, you will first need to put your file in single-user mode. Then you need to go to the file menu, select, “Edit/Preferences”. Then scroll way to the bottom on the left-hand panel and click on Tax: 1099. Then, under the “Company Preferences” tab you will need to map your accounts that all the subcontractor work is saved in. You may have as many as you like.

      Please let us know if you need any further assistance with this.

  • Corinne Lucas

    Hi, I have entered a bill into QB, it has then been paid twice. The overpayment will stay as a credit to be used on the next purchase. How do I enter this?

    • Jay Thompson
      Jay Thompson Post author

      Hi Corinne –
      Let me state the whole procedure (for both receiving a check and using a credit) to make it easier for everyone.

        Example of Problem:

      Someone will pay it via credit card and not record the payment in QuickBooks and so the A/P department issues a check as well. The vendor name in QuickBooks, in this case, would not show that they have a credit.
      The proper thing to do in this case is to click on the “Create Bills” icon, and change the setting from “Bill” to “Credit” (above the word, “Bill”). Then post this in the expense tab to another current asset account called “Over Payments” (or your preferred current asset account name). Then record the payment using a regular check with the expense account to the “Over Payments” account. This will zero the account, but leave a credit in accounts payable for that vendor.

      There are two ways to handle the return payment from the vendor depending upon the circumstances:

      1) If they issue you a check, you would simply deposit the check to the bank Using the “Make Deposits” form, enter the vendor’s name in the “Received From” field and your “Accounts Payable” account in the “From Account” plus the memo, check number, etc. This will zero out the credit you had made for the over payment, but you still need to do one more thing. Go to the pay bills form and select the deposit you made. Then select, “Set Credits” and on the “Credit” tab, select the credit and apply the appropriate amount to the bill.

      2) If you leave it as a credit for the vendor, then once you receive the next bill from that vendor, simply enter the bill the same way as always and in the “Pay Bills” window, select the actual bill you are wanting to pay and while it is highlighted, click on, “Set Credits”. Enter the amount of the credit that you want to go towards this bill and you are done.

      Please let us know if you have any other questions!

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  • Donna Griffin


    I’m using Quickbooks 2013. I have an issue with a VAT (same as sales tax) transaction. Because of rounding, my payment was, for argument sake, 40 cents less than what the “file return” amount was in Accounts Payable. So I attempted to write this off by creating an adjustment to AP, going to the pay bill screen, selecting that 40 cents to pay, selecting apply credit. The 40 cents is now gone…great!!

    HOWEVER, The original amount of the tax that was paid has reappeared in the open invoice (bill payment) screen. When I am in the pay bill screen, click on the view bill, the amount is double what it should have been. Problem is…. This is the only place it shows up. My A/P report is right, the individual supplier total is right. I ran a detailed A/P transaction report, and I notice that all other bills are marked paid when in fact the payment has been made. Except this payment.

    I tried creating a journal entry making a credit so I could ‘pay bill, offset by the journal entry’ but that only threw off my AP and the supplier total.

    In a nutshell…Is there any way I can mark this as paid in the AP register, thereby clearing it from the unpaid invoice report and not effecting accounts payable??

    Thanks for any/all help.

    • Jay Thompson
      Jay Thompson Post author

      Hi Donna,

      For viewers let us define, “VAT”:

      “A type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. Value-added tax (VAT) is most often used in the European Union. The amount of value-added tax that the user pays is the cost of the product, less any of the costs of materials used in the product that have already been taxed.”
      – Investopedia

      For example when a computer is built by a company in Europe the manufacturer is charged a value-added tax on all of the supplies they purchase for producing the computer. Once the computer reaches the shelf, the consumer who purchases it must pay the value-added tax that applies to him or her.

      I am guessing that you must also be using a UK version of QuickBooks since the VAT feature is not available in the US or Canada. You really do not want to use the normal JE method of making an adjustment but the, “Manage VAT window” and under the “VAT adjustments”, use the links to help you create the adjustments you need for your VAT taxes that you owe. Please also make sure you use the “VAT accounts and payments” section to remit your VAT to the government and run your exception reports.

      I hope this answers all the questions that you had on tracking VAT taxes. Please visit us again for more helpful accounting tools.

  • Corey

    I am trying to print an A/P report for transactions done between a certain time. For instance we do payables on the 1st and 15th of each month. If I want those transactions to appear on the same report how do I make that happen? Right now if I do that the 1st payables does not show up on the 15th and the 15th doesn’t show up on the first even when you select the time frame that should include those dates.

    • Jay Thompson
      Jay Thompson Post author

      If you want to do A/P reports for a specific date range, QuickBooks will show you the open A/P transactions (those that have not yet been paid). If you want to see the bill payment as well as the bill, you may want to do a different type of report. For example, a vendor balance detail report will provide both the bill and the bill payment check. If you want only the bills, you can filter for those in the “Customize Report” section on the “Filters” tab select “Paid Status” and select the “Open” option and you will get all of the bills. If you want the bill payments, go back to the filters tab again and select, “Either”, then select “Transaction Type”. In the drop-down select “Multiple Transaction Types” and select the types you are interested in (except “Bill”) and you will get your bill payments.

      Hope that helps!

  • Donna Griffin

    Thank you for your help Jay. Yes, I am using the UK version of Quickbooks 2013.

    I’m not sure that this will work as I now have to create an income account and define a VAT account (%) to create the offset. What’s baffling me is that it’s showing in accounts payable as an outstanding amount, it’s showing on the unpaid bills report, yet, it’s not showing on the supplier centre screen. The supplier centre is the only thing that is correct.

  • Debbie

    QB for mac 2012. Trying to clear an overpayment from a credit card. We refunded the customer in cash. The $35.85 is still showing in the payment. How to do I clear it?

    • Jay Thompson
      Jay Thompson Post author

      Follow these steps:
      1) Go to the Customer in the customer center.
      2) Edit the transaction that caused the credit.
      3) Below, in the “OverPayment” area, choose, “REFUND THE AMOUNT TO THE CUSTOMER”.
      4) Click, “Save and Close”.
      5) A form will pop up asking how you refunded the customer.
      6) Under the “Issue this refund via” dropbox, click on “Cash”.
      7) Other dropboxes will appear so that you may choose which account this refund came from (probably a Cash account).

      This will create the entries necessary to track the overpayment and the repayment. Please call QB Services if you have any questions about this.

  • Melissa

    Hi, I am trying to figure out how I can enter credit card charges and reconcile them etc., but also be able to show the credit card balance in the “unpaid bills detail” report. The reason being is that my boss likes to review the unpaid bills detail report and then decide how much he is going to pay on each bill etc. If I enter charges and reconcile the credit card, it wants me to enter an amount to be paid (which I don’t know yet) so if I don’t enter an amount, it won’t show up…….is there a way of making this work?


    • Jay Thompson
      Jay Thompson Post author

      Hi Melissa –

      If after you reconcile the credit card account you would like to have the balance show up as an “Unpaid Bill” or Accounts Payable, the balance will show up in the “Unpaid bills” report. It is not necessary to pay the complete bill; you can simply pay the portion of the bill that your boss wants to pay. The rest will simply remain as “Unpaid”. Otherwise, you can also edit the bill to the amount that your boss wants to pay and pay it.

      • Elisha

        Im having a problem (I don’t have accountants version) . I have a visa bill owing, and I had a purchase and the same day later returned part of it. If I enter the credit in the enter credit card will not apply to my bill amount and therefore I have big issues when need to reconcile..the only way I see going around this is by making a Journal entry so I can then apply the credit towards my bill amount owing and then my reconciliation balances too. Is there a better way so I don’t have to enter any type of return as journal entry?

  • Tracy

    When I do up a quote on quick books 2003 version, after I save it , it marks it paid. never had this issue before. Please help. Just all of a sudden started, and I noticed that in the bottom right hand corner it says clear instead of revert like it use too.

    • Peter

      I guess I am a little confused.
      By quote, do you mean estimate or invoice.
      I think of a quote as an estimate. If you are using estimates, I don’t think they can be marked as paid. You can’t pay an estimate.
      If you are creating a Bill with a Zero Balance, it will mark it as paid until you put an amount in the amount field.

  • Cindy Patterson

    Hi, I only use quickbooks to record transactions not to actually write checks. When using online banking, I record expenses by using the “select open bills to pay in qbooks”. But, there were several times I forgot to use this feature and now have transactions/bills in the vendor center that show they are past due though they’ve been paid. Can I somehow link these instead of deleting the bills?

    Also, I have received vendor credits. I went to “Enter Bills” and selected Credit and entered vendor information and credit amt. But when recording a bill payment, the credits are not showing up on the “select open bills to pay in qbooks” so my total that i actually sent the vendor is not matching. Can you please help me figure this out?

    Thank you so very much,


    • Jay Thompson
      Jay Thompson Post author

      Yes, Cindy –
      There is a tool in the QuickBooks accountant version that will be able to fix unapplied credits which basically is the same thing as the process you are doing. If you happen to have the “Accountant” edition, then simply go under the “Accountant Menu” and click on the “Accountant Center”. There is a link under the tools section called, “Fix Unapplied Customer Payments and Credits”. This link will also bring to you the for fixing unapplied vendor payments. Those are on the second tab. Once again, please feel free to contact us if you need help with this.

  • Jeff

    Looking for this tool mentioned in the article…
    The exact problem that I had is that “checks have been are written to Vendors instead of bill payments being used. Therefore, bills are still shown as outstanding even though checks have been written to the vendor”

    Fix Unapplied Vendor Payments and Credits tool – I can’t find this tool in QuickBooks 2014 to fix transactions that have entries in my bank register.

    • Jay Thompson
      Jay Thompson Post author

      This tool is available only in the Accountant editions of QuickBooks. If you need this to be done, please contact us and we can provide assistance for you.

      • jenny

        i have the same problem and do not have the “accountant” edition of qb.
        i have over 200g in aging bills that are all listed as paid in the vendor center, but none of them are linked to the checks i actually wrote using Enter Bills / Pay Bills

  • Hans Langedyk

    Im using Premiere Contractors edition 2014 and i would like to fix unapplied vendor payments and credits, how can i do this without the client data review?


  • Sandra Craig

    I’m using an online version of Quick Books. When I enter a vendor transaction it shows in the vendor’s register, as it should. But, on the balance sheet, it shows in the general Accounts Payable line – not the individual vendor’s. How do I enter the transaction so that it shows in the vendor’s line on the balance sheet? Thank you.

  • EricB

    I have qb pro 2013. Is there a way to turn off QB from arbitrarily applying customer payments to multiple invoices? For example I do a Service call for $50 on Dec 1, I create an invoice. I do a second Call for $100 on Dec 3, and create a new invoice. I do a third call for $75, and create an invoice. Customer forgets about the first invoice, and sends a check for $175, and states “payment for invoices 2 and 3.” In Quickbooks you do a receive payment, and sometimes it will apply the payment towards Invoice 1 and 2, and the remainder to 3. Is there a way to stop QB from doing this, and allow the Bookkeeper to enter the payments towards the checks? I know you can change the fields, however this is a hassle, especially if the customer has multiple invoices outstanding. You send them statements that shows the odd way QB applies payments, and it creates a stress for the customer.

  • Susan Biancardi

    We are a Cash Basis company. I have just entered an invoice on QuickBooks and the account that it is assigned to is “Income from Fees”. This is my Accounts Receivable. Will this go onto a report such as Profit & Loss and show that this is a profit of income even though we have not received the check yet? Am I doing this right or should I be doing it another way.

  • Tracey


    I have a delimma with a credit card transaction. I wrote a check to pay the company credit card in QuickBooks for say $85. However, the credit card company entered the check as $95 and I have reconciled the credit card for the month. The issue is when I go to reconcile the company checkbook it is off by the $10 difference. Please Help.

    Thank you,

  • Jennifer

    I have been using Quickbooks Online for a few years now. This year my 1099 amounts are not correct. This problem seems to only affect the vendors who are involved with our capital project, which means their amounts are hitting asset accounts. There does seem to be a pattern to the error – Sometimes only half is applied, sometimes it is all, sometimes some other random amount. Is there a way around this issue?

  • Ruth

    How can I apply a credit card refund on an invoice without it showing up as a sales transaction on our financial reports?

    We posted a credit memo with the refund but amount still showing up in our receivables.

  • Sabrina

    I accidentally have 3 bank accounts using QuickBooks Pro 2014. I need to transfer/merge all company information in to 1 bank account. Can anyone provide any assistance. Thanks.

  • fraidun

    I’m using QuickBooks Enterprise solutions 2015, when I tracking to purchase inventory items for reselling on credit, so perhaps I purchase from one suppliers/vendors several times on credit and repayment during purchasing. Finally after a portial payment to the suppliers, when I want to purchase the next items the quickbooks shows this messge {You cannot use more than one A/R or A/P account in the same transaction}. how can I solve this issue please.