Hi all-
Interesting issue here. We have two suppliers that we sent checks to back in August. We have two different situations I will outline and need help figuring out the proper way to entry this:
Supplier A: never received check - Do we just go back to the payment entry and cancel the entry and put in today’s date and new check number or will that mess up the August books? Do we do a journal entry to back that payment out and then issue a brand new payment entry?
Supplier B: check was stolen out of mailbox and cashed, our bank has refunded us the amount of this check. We did a journal entry for the refund back to our bank account. Now, how do we reissue this check? The payment entry was allocated to 6 invoices. If I cancel the original payment entry, it will mess up August books? I can do a new payment entry but how do I match it?
Thanks for any insight on these two situations!
Heather
In first case once you cancel the payment entry the purchase invoice will become unpaid. Cancelling the payment entry will delete the accounting entry at backend. You can make a new payment entry to settle the invoice
Second issue can be sorted out by making a journal entry back to bank and credit the supplier account by selecting the party which can be later settled through new payment entry with new cheque
Thanks for the response. So would our August books then change if I cancel the payment entry for the first one?
On second one, we did the journal entry as you recommended but how to settle through payment entry? When I select the journal entry to allocate it to, I get an error about unmatched credit entry?
Yes it will effect your August books. Bank will be credited with corresponding effect in supplier.
For second one can you share your journal entry and then payment entry screen shots
Yes, see screenshots here:
Why you are crediting your bank and debiting your supplier??
You need to make a reverse entry to correctly apply this payment
Ugh. I think our bookkeeper thought we would do it just like we do a credit from a supplier which is why she entered it like that. I’ve reversed it as you mentioned and it worked perfectly like I expected.
Thank you so much for your assistance! (I’m not a financial type!)
