Did you accidentally pay a vendor of your business too much money? It’s not uncommon for businesses to buy products or services from other businesses. In fact, most businesses do this. When making payments to vendors, however, you should double check to ensure that you pay the right amount. When you overpay, it can throw off your business’s financial records. The good news is that you can easily record overpayments to vendors using the Quickbooks accounting software. For step-by-step instructions on how to record an overpayment to a vendor, keep reading.
To record an overpayment to a vendor, log in to your Quickbooks account and choose Vendors > Enter Bills, at which point you can select the vendor to whom you made the overpayment. Next, choose “Minor Charge-Off” in the “Item” field, followed by clicking “Save & Close.”
You should then be able to apply the overpayment as a credit to the bill. This is done by choosing Vendors > Pay Bills, at which point you can select the bill that you want to offset the credit. Next, click Set Credits > Credits > Credit > Done. You can then click “Pay Selected Bills” to exit the window and finish the process. Sorry if you were expecting more, but that”s all it takes to record an overpayment to a vendor in Quickbooks.
But what if you made an underpayment to a vendor? Well, you can record this as well using the Quickbooks accounting software. This involves logging in to Quickbooks and choosing Vendors > Pay Bills > select the bill > Set Discount. From here, click the “Discount” tab and enter the amount of the underpayment in the “Amount of Discount” field, followed by choosing “Minor A/R and A/P Charge-Off” in the “Discount Account” field. When finished, click “Done” to exit out of the window. You aren’t out of the woods just yet, though. You must click “Done” in the Payment Summary window to complete the process.
Whether you made an overpayment or underpayment to a vendor, it’s important that you record the transaction correctly. Otherwise, it could throw off your business’s financial records. Thankfully, Quickbooks makes both these processes a breeze. You can record an overpayment or underpayment to a vendor by following the steps outlined in this blog post.
Did this tutorial work for you? Let us know in the comments section below!