Can I change the default A/R or A/P account in QuickBooks Online
QuickBooks Online (QBO) is not designed to work with multiple Accounts Receivable (AR) and Accounts Payable (AP) accounts. The initial AR and AP accounts, or those selected during conversion, will be the default accounts. We encourage our customers to merge their accounts payable and receivable accounts. For more information on merging accounts, please see Merging accounts, vendors, or customers. If division of open payables and receivables are needed use one of the following options…
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
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).
The tutorial video below explains how different expense transactions are entered in QuickBooks Online. It is a step-by-step process of learning how to enter expenses in QBO. This is probably the best in-depth video that covers vendor expenses in QuickBooks Online. I highly recommend you to watch it.
Let me summarize the content of this video:
It explains how to enter expenses like debit card, credit card, ATM, cash withdrawal, bank fee, wire transfer, write check, enter Vendor Bill to pay later as A/P, Pay Bill by the Check and create Purchase Order and more.
It explains how to set up and enter billable charges to customers.
It explains how to set up and enter expenses by class tracking and location tracking.
Lastly, it explains how these entered expenses will show up on various financial reports.