Why Do I Have Negative Amounts in My Accounts Payable Aging Report?
Question: I am having small negative amounts left over in my accounts payable aging report after I record paying suppliers. What am I doing wrong?
Answer: Negative amounts in your accounts payable are usually the result of the QuickBooks supplier purchase order not matching exactly the invoice from the supplier before creating the bill.
Let’s say that you write up an order and it appears that you will owe the supplier $596.00. Once the order is complete and you receive the invoice from the supplier, the total is $679.42. The difference could be any number of things, but it is most often overruns, some random unexpected charge or two, and/or freight. It is rare indeed that the final amount owed the supplier equals the initial supplier purchase order amount.
If you don’t adjust or “vouch” the supplier purchase order to match the $679.42 exactly, your bill (and the amount in accounts payable) will still be $596.00. When you pay the $596.00 bill with the amount of $679.42, you will end up with a negative amount in accounts payable.
To avoid this problem, always adjust the supplier purchase order in QuickBooks to match down to the penny the amount on the supplier invoice before creating the bill.
Please email accounting questions you would like considered for the column to HGatter@AccountingSupportLLC.com with the subject line of "Ask the Accountant."
Harriet Gatter, owner of Accounting Support LLC, was an ad specialty distributor for 23 years and an adjunct professor of accounting at Neumann University. She sold her ad specialty business in 2012, became certified as a QuickBooks ProAdvisor, and now works exclusively with ad specialty distributors nationwide on their QuickBooks, order management and accounting needs.