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Undoing credits applied to paid bills

We've just run into a weird situation with a vendor: We're allowed to return unsold merchandise to this vendor at the end of a billing cycle (a month) so for the past year we have been making these returns (by creating our own credits in A/P and applying it to the appropriate bills from this vendor) and paying the balance. This vendor doesn't issue us credit memos or statement but just sends bills with a Balance Due on it.

After much back-and-forth, it turns out that this vendor has been applying the payments and credits to different invoices than we had indicated on our payment stubs. Additionally, they have chosen to deny certain returns. How do we reverse these credits and re-apply our payments to the vendor's bills so that our balances reconcile to the vendor's? And how do we do this without messing up things like our (reconciled) bank accounts, our audit trail, etc.?

Btw, we're running Quickbooks Pro 2002.

Any help would be appreciated. Please reply to this post in the forum.

Thanks in advance for your help! Yum Foods

Reply to
yumfoods
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Lets see. You are the customer and they are the vendor. The vendor screws up and you want to modify your books to match their screw ups. Don't you think it should be the other way around.

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Reply to
Allan Martin

To 'unapply' vendor credits you would select the bill payment check, and remove the checkmarks from the invoices selected. After this your A/P and vendor balances would be reduced, but your vendor bills would be marked unpaid. You would then go to the pay bills window and apply the credits you received to the appropriate bills. (How you are supposed to figure out which bills to apply the payments to is a different matter). Additionally, you will have to adjust the credit memos you've created to match what the vendor actually accepted. All this assuming you AGREE with what the vendor has done.

Your bank accounts should be ok, but your audit trails *will* reflect you've been changing your payments to the vendor.

As you've figured out, without statements from the vendor, or credit memos to indicate the returns, it is danged near impossible for whoever is issuing the bill payments to have a balance in sync with the vendor. And, if the vendor applies your payments other than the way you've indicated on the bill payment stubs, you will have a heck of a time getting your vendor returns processed correctly.

I would seriously re-consider dealing with that vendor. Especially as the vendor is not communicating regarding your returns. It is simply unacceptable to decide what is/is not a customer credit without informing the customer! Even if you manage to dig yourself out of this mess and to correct your books to reflect the actual expenses (which will be higher than you thought, since some of your returns were denied) in time for your next tax return, you will continue to have the same problems until and unless the vendor changes their procedures.

Reply to
L

If it were me (and yes, I've done this before) I'd refuse payment on any further invoices or open balances until the vendor provides me with a statement reflecting my actual payments and credits as *I* paid them, not as they chose to post them.

They don't get to decide how to apply your payments when you specify what you're paying. They screwed up and they should be the one liable for fixing the problem. Then they can get with you to go over any unaccepted returns and outstanding balances.

Unless you absolutely cannot afford to ditch this vendor right now (or have your account with them frozen) I'd stand firm and demand they fix the clusterf*ck they created.

Reply to
Tee

Thanks for all your suggestions as to how to correct this from an accounting perspective.

About your very good suggestions as to what to do with the vendor, I'm with you there. (How did we find out there was a problem? They sent us to collection. Amount in dispute? Slightly more than $100.00) They are so fired.

Thanks again!

Reply to
yumfoods

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