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JE to Void Check from Prior Period Remains in A/P Bill Paying Window

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  • JE to Void Check from Prior Period Remains in A/P Bill Paying Window

    We are using Desktop Pro 2020 for our business. We voided a check written in 2018 via a JE in 2019. The net effect of the accounts (cash/accounts payable) is in balance, but the JE sits in Accounts Payable Bill Payment section as an open bill to be paid. Why is that and can we do something to clear that? It's harmless from an accounting perspective, I understand. But, it's just hanging out there and seems odd.

    Thanks for any and all responses.
    Kathi

  • #2
    Journal entries should be the exception when using QB, they often do not work as you think they should, and when you use inventory type items they never work for inventory. It is much better to use the forms on the home page the way QB is designed to be used. Journal entries also bypass accrual/cash reporting, and will not show on many reports.

    Typically you think of voiding a check because it was lost, and it was a payment on a bill usually. If you void the check, then the reason for the bill goes away, expense or asset purchase, in cash basis reporting. And typically a lost check is replaced with a new one.

    For that situation, the way I do it
    1. make a deposit in the bank for the amount, note the "voided" check number, date and amount, and use a clearing expense account as the source account for the deposit.
    2. write the new check and use the clearing account as the expense (reason) for the check
    3. when you reconcile, clear the deposit against the new check

    this way, the bill remains paid in both accrual and cash basis so there is no change to the financials. This is especially important if the bill was for inventory. In cash basis reporting, the inventory is not stocked, and any assembly items that use it and were built become pending (not built).

    The lost check is still out there in the wild, and though most banks will ask before cashing a stale check, there is no requirement for them to do so.

    EDIT: If this was a 1099 eligible and reported payment, it gets worse. 1099 reporting is cash based, void the payment and the total for the 1099-misc you filed is wrong for that year and the new payment will show on the next years 1099 report. In this case 2018 and 2019 would be wrong.
    Last edited by Rustler; 03-27-2020, 04:49 AM.

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