Categories
Bill Invoice QBO QuickBooks Vendor Vendors

How do I fix unapplied cash payment income and unapplied cash bill payment expense

You may see two accounts for UNAPPLIED cash payments if you report Profit and Loss on a cash basis. It will automatically trigger to these two accounts simply because you have entered certain deposit and payment transactions differently than normal flow in QBO.

These two accounts are automatically added to the Chart of Accounts when the new company file is created. You can’t delete or change these two accounts.

Here is the main reason that will trigger these two account types in QBO:

  • Triggers “Unapplied Cash Payment Income” when the date of the customer deposit date is before the invoice date it’s applied to.
  • Triggers “Unapplied Cash Bill Payment Expense” when the date of the vendor payment date is before the bill date it’s applied to.

Example of “Unapplied” Customer Deposit and Vendor Payment transactions

unapplied deposit
unapplied deposit
unapplied check
unapplied check
bank register
bank register
cash basis unapplied pnl
cash basis unapplied pnl

Changing “Invoice” and “Bill” dates to be prior to payment dates should work for most transactions in this account. However, there may be other unknown circumstances where the issue may not be easily fixed. In that case, you will need to analyze each transaction and resolve the matter. Or get help from the expert.

invoice
invoice
receive payment
receive payment
bill
bill
bill payment
bill payment
cash basis applied pnl
cash basis applied pnl

 


This video will show how to fix “Unapplied Cash Payment Income” and “Unapplied Cash Bill Payment Expense” on a cash basis Profit and Loss report.

 


OTHER HELPFUL LINKS:
(Also, refer to IRS Publication 538 Constructive Receipt of Income for more details.)
https://www.irs.gov/publications/p334/ch02.html
What’s Unapplied Cash Payment?
https://community.intuit.com/articles/1146009-what-s-unapplied-cash-payment

 


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Categories
Bill Check Pay Bills Vendor Vendors

How does one print a memo line on a check

When you enter a check (create + sign > check), there is a memo section on the bottom left the side of the check (see attachment below). If you have text entered in that memo area, it will print on a check.

check memo line
check memo line

However if you enter a bill (create + sign > bill), even if you’ve entered text entered in that memo area, it will not print on the check when select pay bills (create + sign > pay bills).

If you need to print a fixed memo line like the account number or a specific memo line message on a check print, you can select “account number” field on vendor information page (see attachment below). That way it will print the same memo line on specific vendor checks all the time.

vendor info acct no
vendor info acct no
check print with memo
check print with memo

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Categories
1099 Vendor Vendors

What to exclude transactions on 1099-MISC forms when you pay an independent contractor

The basic rule is that you must file a 1099-MISC forms when you pay an independent contractor (sole proprietor type) $600 or more in a year payments you made by cash or check. ( https://www.irs.gov/pub/irs-pdf/i1099msc.pdf )

Beginning with the 2011 tax year, the IRS requires you to exclude from Form 1099-MISC any payments you made by credit card, debit card, gift card, or third-party payment network such as PayPal. If they meet the requirements, these payments are being reported by the card issuers and third-party payment networks on Form 1099-K.

box7 excluded

 
In QuickBooks, here is a reference list of codes to use when you record payment transactions to exclude:

http://support.quickbooks.intuit.com/support/pages/inproducthelp/core/qb2k13/contentpackage/payroll/1099/popup_1099_exclude_text.html

Here is another helpful article to get familiar with 1099 exclude rules.
http://payroll.intuit.com/support/kb/2001238.html

Note: In QBO, 1099 vendor feature is available in PLUS version only.


 

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Categories
1099 Bank Deposit Chart of Accounts Check Expense Expenses Vendor Vendors

Owner paid a subcontractor with his own money. How to make sure Vendor shows up on 1099 and still able to write the reimburse check to the Company Owner

First, you will need to create a new dummy bank account. You will also need a due to the owner as a liability type account to use it for later reimbursement.

Step#1 Use bank deposit form (create + sign > other > bank deposit) to record contributed amount by the owner to pay a contractor. Account to show as due to the owner liability type account. See screenshot below.

owner deposit
owner deposit

Step#2 Use Expense form (create + sign > vendor > expense) to create contractor expense posted to appropriate expense account. See screenshot below.

contractor expense
contractor expense

Step#3 Use Check form (create + sign > vendor > check) to write the reimburse check to the Company Owner. See screenshot below.

check to owner
check to owner

In case there is no need to reimburse the owner (step#1), you will use a capital contributed account which would be an Owner’s Equity type account.

Review of 1099 vendors and payments list. See screenshot below.

review 1099 vendors payments
review 1099 vendors payments

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Categories
Credit Memo Customers Vendor Vendor Credit Vendors

How to handle when a customer has an overpayment in account balance and goes out of business

Accounting treatment in QuickBooks is exactly the same like when Vendor goes out of business prior to payment for the open balance.

If the vendor (or customer with a credit balance) goes out of business due to bankruptcy, keep it until you hear from the courts with instructions as to where to forward your payment.

In case, you do not hear from the courts (depending upon regulations in your state, you may have to leave it on the books for several years, in many states for up to 5 years), you will reverse the entry by creating a credit memo and take it as income like the one-time gain to your P&L.

If you are really interested in clearing A/P or A/R (negative balance), you can also set it up as holding liability account on your Balance Sheet.


 

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Categories
Bill Check Pay Bills Purchase Order Vendor Vendors

Way to pay vendor bills originating from your purchase order via a credit card

Categories
Customers Invoice Vendor Vendors

Can billable expenses be billed in two partial invoices

Categories
Check Pay Bills Print Checks Vendor Vendors

#QuickBooks – How do I enter and print reference information on voucher checks?

In QuickBooks Online, there is no feature setup to print reference number (or vendor bill number) on voucher checks. Reference number comes directly from entered bill number field.

 

Here is a sample of Voucher Check printout:
Click on the screenshot below to enlarge it
voucher check

  • Reference column = entered vendor invoice number on “bill no.” field
  • Original amount = vendor invoice amount
  • Printer setup selection = voucher (not standard)

Weekly Price Check US CA UK AU (Plus Plan)

USACanadaUKAustralia
us120x90ca120x90uk120x90au120x90
USD 23.97 per monthCAD 14.50 per monthGBP 15.00 per monthAUD 21.00 per month
USD 23.97 per monthUSD 12.01 per month
(Conversion)
USD 23.30 per month
(Conversion)
USD 16.60 per month
(Conversion)
LOWEST PRICE!

 

#QuickBooks Online

 

Categories
Create Credit Memo Vendor Credit Vendors

How do you mark a bill as paid if paid by your parent company (not by your bank account or credit card)

First, you need to get some guidance from the parent company if they go through inter-company elimination process to prepare consolidated balance sheet report.

In QBO create Intercompany Accounts Payable Account (not main Accounts Payable A/P) >

you can select “Credit Card” Type > it will show as Credit Card group on the Balance Sheet. When you Pay Bills (or enter expenses), you can select this account instead of bank account > easy one step process only > however, if parent company has a problem using Credit Card type account then, you may need to set it up as “Other Current Liabilities” type account.

In that case, it becomes two step process > pay bills (or enter expenses) using Credit Card type as I/C clearing account > transfer the balance from Intercompany Accounts Payable (other current liabilities type) to Intercompany Clearing account (credit card type > new name). To transfer in QBO, you can use Transfer (create + sign > other > transfer) or write a Journal Entry (and make it reversible JE if needed).

Again, it’s a good idea to consult with your parent company who handles Intercompany accounts. And, always reconcile accounts on a regular basis.

Click on the screenshots below to enlarge them
ic payable

ic paybills

ic payable2

transfer

transfer_je

balsheet2
NOTE:
On the parent company’s books, they should record this as an intercompany accounts receivable.
In QBO for Intercompany Accounts Receivable > select “Other Current Assets” Type (not main Accounts Receivable A/R type. In QBO, you can have just one A/R).

Categories
Customers Pay Bills Receive Payment Vendor Vendors

I have a vendor that I purchase from and who also purchases from me. How do I handle this barter transactions in QB online?

A barter transaction is one in which you buy products and services to a person (vendor) or company from whom you also sell other products and services (customer).

Set up the bartering process in QBO:

  1. Open your vendor center and add the vendor to your vendor information screen with a “(V)” after the name.
    From the home page screen > left blue navigation bar > Vendors > New vendor (upper right corner) > Fill out vendor information > Example: Barter Enterprises (V)
  2. Open your customer center and add the customer to your customer information screen with a “(C)” after the name.
    From the home page screen > left blue navigation bar > Customers > New customer (upper right corner) > Fill out customer information > Example: Barter Enterprises (C)
  3. Set up a new bank account for your barter transactions.
    From the home page screen > left blue navigation bar > Transactions > Chart of Accounts > New > Category Type = Bank > Detail Type = Cash on hand (or select one) > Name = Barter Clearing > Description = Bank Clearing – Same Vendor and Customer

Check out our helpful YouTube tutorial video. Be sure to subscribe our channel. Follow us on Twitter (@newqbo). We highly encourage you to watch the entire video.. You do not want to miss a step!

 
vendor

customer

barter bank

Enter Bills and Invoices:
Enter Bills and Invoices as normally would. No difference. Make sure to select Vendor (V) on bills and the Customer (C) on invoices.
For entering Bill > From the home page screen > create + sign > vendors > bill
For entering Invoice > From the home page screen > create + sign > customers > invoice

create vendor bill

create customer invoice

 

Barter Settlement

Make payment due (money out) to the Vendor (V)
Case # 1:
Vendor Bill = $600.00
Customer Invoice = $500
Balance due to Vendor (V) = $100

Pay Bills and Receive payment

  1. To Pay Bills (partial $500) > From the home page screen > create + sign > vendors > pay bills
    Payment Account = Barter Clearing (IMPORTANT)
    Select “Pay” Vendor (V) checkbox
    Amount to pay = Same amount as Customer Invoice (example: $500)
    Starting Check No. = Non Cash Payment
  2. To Receive Payment > From the home page screen > create + sign > customers > receive payment
    Select Customer (C)
    Payment Method = Non Cash (add new if needed)
    Reference = Barter
    Deposit to = Barter Clearing (IMPORTANT)
    Select Outstanding Invoice transaction
    Amount = $500
  3. To Pay Bills (remaining $100) > From the home page screen > create + sign > vendors > pay bills
    Payment Account = Bank Account (IMPORTANT)
    Select “Pay” Vendor (V) checkbox
    Amount to pay = $100
    Starting Check No. = Non Cash Payment

vendor payment offset against customer invoice

customer payment applied against vendor bill

balance due payment to vendor

vendor page

customer

Review Bank Register for Barter Clearing account (from the home page screen > left blue navigation bar > transactions > chart of accounts > view register under action column
This account should have zero balance.

bank register

 

Receive payment due (money in) from the Customer (C)
Case # 2:
Customer Invoice = $2,000
Vendor Bill = $800.00
Balance due from Customer (C) = $1,200

Receive payment and Pay Bills

  1. To Receive Payment > From the home page screen > create + sign > customers > receive payment
    Select Customer (C)
    Payment Method = Non Cash (add new if needed)
    Reference = Barter
    Deposit to = Barter Clearing (IMPORTANT)
    Select Outstanding Invoice transaction
    Amount = $800 (partial)
  2. To Pay Bills > From the home page screen > create + sign > vendors > pay bills
    Payment Account = Barter Clearing (IMPORTANT)
    Select “Pay” Vendor (V) checkbox
    Amount to pay = $800 (same as vendor bill)
    Starting Check No. = Non Cash Payment
  3. To Receive Payment ($1,200 by check) > From the home page screen > create + sign > customers > receive payment
    Select Customer (C)
    Payment Method = Check
    Reference = Customer (C) check number
    Deposit to = Bank Account (IMPORTANT)
    Amount = $1,200

2 create customer invoice

2 enter bill

2 received payment offset by vendor bill

2 vendor bill payment

2 recevied payment by check

2 customer page

2 vendor page

Review Bank Register for Barter Clearing account (from the home page screen > left blue navigation bar > transactions > chart of accounts > view register under action column
This account should have zero balance.

2 bank register

 
Note: It can also make this barter process to work even if the customer and vendor are different, but need to settle out A/R and A/P balances.

 

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