Why do I have a negative Accounts Payable (A/P or AP) account in QuickBooks Online
If you have a negative Accounts Payable account in your QuickBooks Online company, then it can be for several reasons.
We’ll go over some of the most common reasons you may have a negative accounts payable account in QuickBooks Online.
The original bill was deleted
If you (or someone else) deleted the original bill after you’ve paid it, then you’ll have a negative balance. That’s because the platform sees a payment with no associated bill.
One way to fix this issue is to look at your list of vendors under Expenses > Vendors. Look for the vendor that you paid or for a vendor with an open balance. Create the bill. Then edit the payment to link the payment to the bill you just created. QuickBooks Online should show you any Bills that can be linked.
You paid an amount that is more than the bill
Sometimes you’ll make a mistake and enter a payment amount for more than the Bill. If you made a mistake by entering the wrong numbers, then simply edit the Bill Payment and correct your mistake.
Negative Accounts Payable Account using Vendor Credits and Deposits
On a related note, you may see a negative balance in your AP account if you have unlinked Vendor Credits and Deposits.
If you are manually creating documents for Amazon transactions in QuickBooks Online, then you may encounter unlinked Vendor Credits and Deposits if you don’t manually link the two documents.
Here’s a common scenario if you’re using Amazon (here shown as A Vendor):
You create a Vendor Credit for a reimbursement from A Vendor because of a lost warehouse adjustment. The Vendor Credit is for $1,000. A Vendor now has a $1000 open balance.
Then you create a Deposit into the Undeposited Funds account for $1,000 from A Vendor to match the amount. But these two transactions aren’t linked, so they appear to be two unrelated transactions.
As a result, you’ll see an Open Balance for $1,000 under A Vendor and a separate $1,000 paid on your Accounts Payable register.
To fix this, simply go to Expenses > Vendor. Click on the “Open Bills” button and find A Vendor. You should see an Open Balance. Click on “Make payment” to have QuickBooks Online link the deposits and credits. Your total amount paid will be $0.00 since all credits and deposits should match up.
If they don’t match up, you should make sure that you entered the correct values for the Vendor Credit and/or the Deposit. Make sure you’ve also entered the related transactions (the credit and the deposit).
Select the proper account. This is usually the Undeposited Funds account you’re using for Amazon.
Save the Bill Payment and your Accounts Payable account should reflect the proper amounts after.
Once the transactions are linked in QuickBooks Online with the Bill Payment, then your Accounts Payable account should be fixed.
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