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Writing off an A/P balance

Forum|Forum|1 year ago
July 2, 2025
1 reply
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I am the administrator of a granting foundation.

At the beginning of each of our granting sessions, we use journal entries to open an A/P balance with each of our grantees.

We credit the award amount (let's say $15,000) to an A/P account (created for the individual grant) and debit it to an expense account (a general one called "Grants.") The grantee then submits requests for reimbursement based on expenditures made on the related project. Occasionally there will be a balance left over on what was awarded to the organization. For example, let's say that the organization with a $15,000 grant was able to purchase their requested item for $14,000. We'll write them a check for $14,000 and apply it to the "bill" created from the journal entry. This leaves $1,000 to be written off.

In the past I've entered this leftover money as a write-off in a final journal entry that debits the A/P account and credits the expense account. This will clear out the account but leave an unpaid balance in our A/P report, and the vendor profile will show a $1000 "overdue payment."

To address this in the past, I've been able to navigate to the "Pay Bills" screen in the Vendor Center and apply the available credit from the journal entry and that clears it all out.

But for some reason, the credits are no longer showing up there. I don't think I've changed anything I'm doing! I've tried switching the debits and credits and that doesn't seem to make a difference either.

How do I get this write-off properly credited to the bill?

@Rainflurry, you've helped me with similar issues in the past. If you're still out there, I'd love to hear your thoughts about this!

QuickBooks Online

Best answer by Rainflurry

No worries! Thanks so much for hanging in here with me! You are truly the very best.

I changed it back, but, frustratingly enough, it's STILL not showing up in the Pay Bills list. This has happened with one other grant write-off as well. I'm just scratching my head. Here's a screenshot of the current AP Detail and the Pay Bills screen. You'll note a couple of $15,000 grants in there - they're not the one we're dealing with here.

https://docs.google.com/document/d/1kW-I6D2iuqoZr8R523ZULg2PpKdMz6Gu9fdOmO8-axQ/edit?usp=sharing

@Rachel_S

I think I see what's happening. When you go to Pay bills, it defaults to bills with due dates over the last 12 months. None of your bills over a year old are showing in Pay bills. Go to New > Pay bills, click the 'Filters' drop-down, and under 'Due Date', scroll to the bottom and select 'All dates'. You should see it now.

This is another reason why you shouldn't use journal entries. They are considered due as of the date of the journal entry. When you use a Bill, it allows you to enter a different due date and bill date.

Rainflurry

Level 11

@Rachel_S

To make sure I understand your process, can you confirm these are the journal entries:

1) JE #1 - To record the award as A/P:

	DR	CR
Expense	15,000
A/P		15,000

2) JE #2 - Reimbursement:

	DR	CR
A/P	14,000
Cash		14,000

3) You then apply the $14,000 credit created by JE #2 to the $15,000 bill created by JE #1, leaving $1,000 due to grantee, correct?

4) JE #3 - To create credit to write off the remaining $1,000:

	DR	CR
A/P	1,000
Expense		1,000

5) It's at this point, when you go to New > Pay bills, you don't see the $1,000 credit created by JE #3 in order to apply it to the $1,000 remaining A/P balance from JE #1, correct?

If I'm understanding that correctly, the credit should show up when you go to New > Pay bills. If it's not there, the only thing I can suggest is to run an A/P aging detail report and you should see both JE #1 and JE #3 under the vendor (grantee). Do you see them? If not, then the vendor (grantee) must not be the same for the JE #1 and JE #3.

R

Rachel_S Author

@Rainflurry Thank you for this response! You are SO amazing at understanding these long written descriptions of Quickbooks things, and I deeply appreciate your willingness to take the time to help!!

Okay, I can confirm that Journal Entries #1 and #4 are as you described. What happens with steps #2 and #3 is not in a journal setting - I just write a check, and when the "Apply to Bill" option pops up on the right-hand side of the screen, I select it and complete the check as a bill payment. Looking at the General Ledger, I can see that this transaction is then being logged as a debit to the A/P account and a credit to cash.

And yes, after all that, when I go to New/Pay Bills, the A/P account is not showing up as having an open balance (let alone a credit,) but the Vendor shows an overdue payment (screenshot on page 2 of the document linked below).

From my ledger, I clicked on the Bill Payment (screenshot on page one of the document linked below). I am seeing that there's a space at the bottom of the screen to enter a credit. Should I enter the write-off amount in that box?

The A/P Aging Summary is showing only the write-off amount (page 3 in document below).

What am I missing here? I feel like I know just enough to get myself into trouble, but not quite enough to get myself out of it!!

Thanks again.

https://docs.google.com/document/d/1sNCa8kTij_u53P9ZksfHCc7KJXsyrl57RTz8_4elzJM/edit?usp=sharing

Rainflurry

Level 11

@Rachel_S

"I am seeing that there's a space at the bottom of the screen to enter a credit. Should I enter the write-off amount in that box?"

You should be able to click the box to the left of the available credit "Journal Entry # Write-off SP24-25" on Bill Payment #3703. That will apply the $200 credit and make the amount paid $15,000. It will close both the "bill" from the original JE and the credit created by JE #3.

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