Hi, g_Quik_Online.
I'm here to help you write off your vendor's negative balance in QuickBooks Online (QBO).
You're making great progress! When creating a Journal Entry (JE) to write off a vendor's negative balance (credit), simply debit the bank account and credit the default Accounts Payable (A/P) account instead. It is not necessary to select a specific vendor's A/P account for this transaction.
Once done, all you need to do is link the JE to the vendor credit by using the Pay Bills option. Here's how:
- Go to the + New icon.
- Select Pay bills.
- Place a checkmark beside the vendor's name in question.
- The total payment amount should now be zero.
- Hit Save and close to complete.
The other option is to create a bank deposit for the vendor using the same default A/P account. Here's how:
- Go to the + New icon.
- Select Bank Deposit.
- In the Add funds to this deposit, select the vendor's name in the Received From dropdown.
- Choose the default A/P in the Account dropdown.
- Enter the amount.
- Hit Save and close.
After that, link the deposit to the credit. You can do the same steps above to link the transactions.
You can check out this article for further guidance: Write off customer and vendor balances. Though this article is for QuickBooks Desktop, the steps can be used in QBO.
Moreover, I strongly recommend seeking assistance from your accountant. They will be able to provide expert guidance and determine the best course of action for you and your business.
You can also run a vendor report to check all the payments made to vendors. Refer to this article for future reference: Run a report with vendor totals.
Please let me know if you have additional questions about this or anything else. I'll be more than willing to assist. Stay safe.
