Ask the Accountant…
Question: I am having small negative amounts left over in my accounts payable aging report after I record paying suppliers. What am I doing wrong?
Answer: Negative amounts in your accounts payable are usually the result of the QuickBooks supplier purchase order not matching exactly the invoice from the supplier before creating the bill.
Let’s say that you write up an order, and it appears that you will owe the supplier $596.00. Once the order is complete and you receive the invoice from the supplier, the total is $679.42. The difference could be any number of things, but it is most often overruns, some random unexpected charge or two, and/or freight. It is rare indeed that the final amount owed the supplier equals the initial supplier purchase order amount.
If you don’t adjust or “vouch” the supplier purchase order to match the $679.42 exactly, your bill (and the amount in accounts payable) will still be $596.00. When you pay the $596.00 bill with the amount of $679.42, you will end up with a negative amount in accounts payable.
To avoid this problem, always adjust the supplier purchase order in QB to match down to the penny the amount on the supplier invoice before creating the bill.
Please email your questions to Harriet at Ask The Accountant.
QuickBooks Premier and Enterprise can be modified to better serve ad specialty distributors. Harriet Gatter is a QuickBooks ProAdvisor, a former accounting professor and a former ad specialty distributor. She advises ad specialty distributors to use QuickBooks Premier and Enterprise, often in conjunction with other industry-specific software, to manage the complexities of the ad specialty business, with the results being time saved, errors eliminated and an overall accurate accounting of your business. Contact her at [email protected].
