Q & A with Will English
Today’s Topic: A colleague needs advice to solve an A/P problem
Colleague: I have a client who has a large A/P balance but not a lot of bills to pay in Pay Bills in QuickBooks Financial (QBF) Pro. After investigating, it appears that there are a large number of Item Receipts that transferred from QuickBooks Point of Sale (POS) that were not converted to Bills. I believe the merchant entered the purchases of the Items in QBF Pro as checks coded to COGS. How would you resolve this discrepancy, it's looks like there may be several hundred. :(
Will: Push the bills over into QuickBooks. I would still change the checks to A/P to match them up. Then create a GJE to put COGS back where it was and then reverse out this year.
Colleague: Thank you for the info, I was afraid of that - however, some of this extends across tax years with the COGS being overstated. Their CPA wants me to adjust in the current year and document in case of an audit. I believe this rule’s out being able to go back and change the bank credits to A/P on some of these... any more ideas?
Will: While that is often the case, I have also found that unless the customer is strongly trained to match the receiving voucher to the vendors invoice, you will get a mismatch. This will create all sorts of problems in the costing of items, inventory values, etc. A good check is to see if the inventory balance in POS matches the inventory balance in QBF. If it doesn't, you most likely have receiving problems.
Change the checks from COGS to Accounts Payable since POS would have already posted COGS entries when the item was sold. Then convert the item receipts to bills and match up the payments to the bills. Most likely you will not be able to match them all, in which case, you need to adjust the balances.
