Write Cheque Function Used Incorrectly

by Kaitlyn


I recently was hired by a company that has been trying to do its own books for the last 2 years. I was brought in to fix them and bring them up to date. One of the scenarios I'm encountering is cheques being written using the Write Cheques function in Quickbooks when there is a bill payment due, I've tried following the advice on here.

- select cheque, change to AP from Expense, with vendor listed in the memo field.

- then going to pay bills and applying credit

the problem with this is that the credit is only for the cost of the item and the PST, leaving the GST still owing...

HELP! I'd really like to stay with this company but I don't know how to fix this.

image of fancy scroll lines

Hi Kaitlyn,

You have to correct your sales tax code. Accounts Payable does not have a sales tax code because the sales tax was accounted for with invoice. The input sales tax credit has actually been claimed twice if the invoice was input to Enter Bills and Write Cheques. So you have to be careful here if the ITCs have been included in a filed GST/HST report.

You've got some options.

Can you post back here and let me know ... if the bank reconciliations have been done? Were the GST/HST reports filed based on a hand calculation or using the QuickBooks information, in effect claiming ITCs twice? Were the tax returns prepared using this information? Was the "close" function ever used?

Once I have a bit more information on where the books are at and what has been filed using the information, we can talk about how to approach your problem.

There is always more than one way to do things in QuickBooks.

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Nov 10, 2010
by: Kaitlyn

As far as I know the owner has not claimed any of the ITC's for the past 3 years, instead just paid the GST collected from sales. Now he wants to claim the ITCs. My main issue is the duplicate entries, previously someone entered payables as bills and paid them using Write Cheques function, leaving the bills in AP.

Thanks for your help.

Nov 10, 2010
Fixing the AP Bill Payment Errors
by: Anonymous


That is good news! You have four years to claim the ITCs.

You've got three options:

First option: Start by making a backup of your file because if you goof, there is no "undo" button.

If the bank reconciliations haven't been done yet, print a cheque register. Fix your problem by simply deleting the incorrectly processed cheques and reentering them using the Pay Bills function. Use the cheque register to make sure you are entering the correct data.

Second option: Start by making a backup of your file because if you goof, there is no "undo" button.

If the bank reconciliations have been done, I like to just correct the cheque coding as previously discussed. But sales tax can complicate this method. As you haven't filed any ITC, this method is still available to you.

When you change the coding from the expense account to A/P, you have to change the sales tax code. A/P payments do not attract sales tax. The sales tax was recorded when the invoice is recorded to the A/P ledger.

Third option: Start by making a backup of your file because if you goof, there is no "undo" button.

Go in and delete the vendor bills in A/P. This isn't my favorite choice, because if you are doing accrual accounting, the matching principle is not being adhered to.

To fix this, just make sure your A/P is correctly reported at each year-end.

Let me know what you think of these options or if you think I've missed something pertinent to your situation.

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