Clearing a UNPAID bill payment from my Bank Rec

[PaulCooper]

Hi

I have a Bill Payment sitting in my bank reconciliation screen that is in the current year but back in July 2011. So its a closed period. It is not ticked as cleared so has not formed part of any bank rec yet.

The underlying journal is

cr Cash at Bank
dr Accounts Payable

As there is no expense account involved (which if i had used Write cheque) there would have been, I assume i do not have to worry about it affecting either P&L or Tax reports.

Can I simply void it in this case? or should i do something else like the journal solution advised here

http://www.quickbookshelp.com.au/Dow...QuickBooks.pdf

[Joe Williams]

Create a new Other Income account named "Uncashed checks" and then do a Make Deposit using that account and the vendor name. On the next reconcile, check BOTH the old Bill-Pmt and the deposit (they should cancel each other).

[PaulCooper]

Hi joe

I think your method would have only cleared the bill-payment but then the original bill (which debited an expense account in a prior period) would sit uncorrected expense wise and/or possibly show as unpaid and show a balance in the supplier screen.

I found this procedure from this forum

1. Enter a Bill-Credit in the Current period with the same account and GST code as the original cheque. -- this reverses the incorrect expense recorded and Input Tax Credit (GST) received in a prior period.

2. Enter a Deposit with the Suppliers Name in the received from field and with Accounts Payable as the allocation account.

3. Go into the Pay Bills screen - the deposit will show as a Bill. Tick the "bill" and apply the credit that you created in step 1.

4. On your next Bank reconciliation, tick the deposit and the unpresented cheque.

I didnt explain in my first post that the underlying Bill also was wrong hence the extra steps to correct. I suppose at times there are situations where the original bill is correct and should stay, just the stale payment sitting in the bank reconciliation report has to go.?

[PaulCooper]

Originally Posted by Joe Williams

Create a new Other Income account named "Uncashed checks" and then do a Make Deposit using that account and the vendor name. On the next reconcile, check BOTH the old Bill-Pmt and the deposit (they should cancel each other).

Hi

2nd Problem
I now have another unpresented bill payment sitting in my bank reconciliation screen. However this time, the underlying Bill and associated expense debited is correct - so does not need a bill credit to be raised like in Step 1 above.

I tried your way but of course you end up with a new income account showing on your P&L and a value sitting there, which is wrong I think because no income has been earned here.

I tried Step 2 from my own solution above however the only problem is that the supplier then is left with a balance when prior it was Nil.

So i am not sure how to clear this bill payment, all that is needed is
to
dr bank
cr AP
but even if I journalise it, it probably the journal will show up in the Supplier balance.