Why does QuickBooks Show Accounts Payable In Negative?

I have observed that our QuickBooks shows too many accounts payable in Negative which is incorrect. Can someone tell me why?

Asked on January 17, 2019 in Account Management.
1 Answer(s)

Accounts payable is a liability account. It is a representation of all amounts that you to someone like a vendor for the bill made on the account. As a liability, it has a normal credit balance. If any transaction is incorrectly debited to accounts payable also known as A/R, it could result in a negative balance in QuickBooks Accounts Payable.

In QuickBooks occasionally, business owner takes care of accounts, who don’t know what causes that negative balance in Accounts Payable and what to do to fix it. Bill and bill payment effect accounts payable in QuickBooks. A negative balance in Accounts payable means that bill was created and payment was made against that bills but somehow the original bill got deleted on voided. And that paycheck is still in records. It means that you have paid your vendor but QuickBooks is not able to find that payment source as the bill is deleted or voided. In QuickBooks, it will show that the vendor owes you some money. Since the bill payment check will remain in QuickBooks, it will create a negative balance is Accounts Payable.

If you see negative balance in Accounts Payable, you have to check all vendors who show a negative balance from the vendor list. Go to the reports menu and choose Vendors and Payables. Then select the Unpaid Bills Details reports. Check that entire report and look all negative amounts. If you see any, open that transaction by double-clicking on the amount.

A bill payment transaction will open after double click on the amount. Go to Edit menu and select Transaction History. You will see that there is not history linked to this transaction. There will not be any bill or any amount that indicate what was check paid for. Take all details on the check like vendor name, date, amount etc. Leave that payment open and go to Vendors menu and select Enter Bills. Select the same vendor name and create a bill. The amount should be the same as on bill payment. If you have records of that old bill anywhere, make sure you have correct due date on the bill. Once you have entered all the correct or best guess details click on Save and Close or save and new if you have to enter more bills.

Once you have entered that bill go back to bill payment check. Now you will see that the bill that we entered is there now. Select that bill to enter the same amount as on check and click on save & close. You will get a pop-up whether you want to save the transaction, so click on Yes to save that transaction.

Once you have paid that bill go back to Unpaid Bills Details report and refresh that report. Now you will see that the bill payment check that we worked on will not be in a negative amount. And it will come along with the new bill that we created. Because that paycheck we have used against those bills. If you see any other negative balance in this report perform the same step until you don’t see all the positive amount in this report. Make sure we are not creating a new check to pay this bill otherwise will show a negative balance in Accounts Payable again.

Answered on February 19, 2019.

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