I have gotten this question a few times now in the past couple of months so you know when that happens – it’s time to create a blog post. When you run the Unpaid Bills Detail report in QuickBooks, it’s supposed to show you a listing of any bills that are unpaid and therefor still open. Sometimes when people run this report, they notice that although the vendor has a total of $0.00 balance, a listing of bills and credits still show up on the report.
Why does this happen? Well many people don’t realize that just because you enter in a vendor credit to wipe out a bill, it doesn’t mean that the credit is actually being used against that open bill. When you go to Vendors>Enter bills and choose the Credit button, the system creates a vendor credit which does effect the balance that is owed to the vendor. So if you were to go to the Vendor Center, the balance for the vendor will be reflective of the total of all the bills and subtract out all the bill payments and credits. Unfortunately, unless you set the credit against a specific bill, the bill itself will still show on an Unpaid Bills Detail report.
How do we get this to go away? Once you create the vendor credit, go to Vendors>Pay Bills. Check off the bill you want to use the credit against and choose the button at the bottom that says “Set Credits.” Check off the credit you want to use and click ok. Now you just have to click Pay Selected Bills and this will set the credit against the bill and therefor take the bill off the Unpaid Bills Detail report.
Just as a little side note, this process is the same for the Open Invoices customer report. If you see any invoices on the report that have an offsetting credit, just go into the credit and tell it to apply to the actual invoice. The invoice will then fall off the Open Invoices Report.
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