My accounts payable shows bills as still unpaid that I already paid, or a balance I don't actually owe — how do I find what went wrong and fix it without double-counting the expense?

Why does one recording slip leave an unpaid bill and a doubled cost?

This only happens where you enter bills. Intuit's QuickBooks Online help on the differences between bills, checks and expenses reserves bills for items or services you receive now and pay for later; if you record costs only when money leaves the bank, there is no payables list to go wrong.

AccountingTools' article explaining accounts payable sets out the two entries a bill expects: entering it debits the expense or asset account and credits accounts payable, and paying it debits accounts payable. When the payment is instead recorded as a check, an expense or a categorized bank-feed line charged to a cost account, its debit lands on that cost account. Accounts payable is never debited, so the bill stays open, and the cost is recorded twice, in one account if the payment was coded like the bill, otherwise once in each of two accounts.

To see both halves, open the vendor's record. Intuit's QuickBooks Online help on viewing supplier transactions says the vendor's Transaction List shows all of that vendor's transactions. In the usual case it holds the open bill and a check or expense for the same amount that is not linked to it. If the payment is not in the vendor's list, find the withdrawal from the bank statement in the books' bank register by date and amount, and open it to see the account it was charged to. Then run the transaction detail of the bill's account and of the account the payment was charged to: between them the purchase appears twice, while the bank statement shows one withdrawal. If the payment went to a suspense account on the balance sheet, the cost is not doubled; that account holds the stray charge instead.

AccountingTools' definition of the cash basis describes it as recording expenses when cash is paid out, so a cash-basis report may already show the cost once. The correction is still needed, because the open bill still overstates payables and invites a second payment. The example below uses accrual figures, where both charges show. Take the before copy and run every check below on accrual-basis reports; don't judge the correction from a cash-basis report.

What else can leave a payables line wrong?

Classify every doubtful line from the evidence before you enter anything:

If the vendor's statement still shows the invoice open, the payment may have settled something else, or it may be a timing difference, so the bill may already be paid: leave it open, enter nothing, and don't pay it again until you know what the withdrawal settled. If a line fits no row, enter nothing until you know why. Intuit's QuickBooks Desktop help on paid bills that still show as open names other causes, among them a bill payment dated after the report's date range and a damaged link between the bill and its payment.

How do you isolate and confirm the affected lines before changing anything?

Work in this order, and make no entry before step 6:

1. Keep a before copy. Save the open payables detail (the aged payables or unpaid-bills report), the payables balance on the balance sheet at the same date, and the bank register as they stand.
2. Scope the job. Sort the open lines by vendor and date and mark each one you doubt. The count shows whether this is a few fixes or a clean-up, and the oldest date shows whether any line reaches into a period already closed and reported.
3. Read each vendor's history. Look for an unlinked check, expense or feed line for the same amount, an unapplied credit or payment, or a second bill with the same invoice number. If the payment isn't there, look in the books' bank register for a withdrawal of the same amount, and open it to see the account it was charged to.
4. Check the bank's own record. Find the withdrawal on the bank or card statement by date, amount and payee or check number. The books are what you are testing, so they cannot be the evidence.
5. Check the vendor's account. Compare each line with the vendor's statement. AccountingTools' guide to reconciling accounts payable says this comparison identifies unrecorded invoices, unapplied credits and timing differences.
6. Classify, then correct. Give each line its row in the table above, note the evidence beside it, and correct only lines with evidence from both the bank record and the vendor's account.
7. Verify. Run the checks in the verification section against your before copy.

How do you correct a payment recorded outside its bill?

The correction moves the payment's charge off the cost account and onto the vendor's bill, and leaves the bank transaction alone. AccountingTools' article on adjusting and correcting entries describes this use: a correcting entry moves an amount charged to the wrong account to a different account. Make the move through the vendor's record so the bill itself closes. A journal line posted straight to the payables account can make the balance-sheet total look right while the bill stays open in the vendor detail and the aging. AccountingTools' guide to reconciling accounts payable includes a step to check the payables account for journal entries.

When a payment made outside the software arrives as a bank-feed line, Intuit's help on matching bank transactions says categorizing it, rather than matching it, creates a brand-new record; categorizing a vendor payment to a cost account while its bill sits open produces exactly the double entry above. What you keep depends on how the payment arrived:

How is the vendor credit entered and applied?

A vendor credit carries the correction through the vendor's record in two steps:

1. Enter it. Create a vendor credit for that vendor, for the payment's amount, charged to the account the payment was charged to (even a suspense or uncategorized account), dated in the payment's period, with a memo naming the bill and the bank transaction. Intuit's help on vendor credits in QuickBooks Online has you enter category or item details on the credit. Use a category line for the account the payment was charged to, not an item, because the same help says that if you select an inventory item, QuickBooks puts it back into inventory.
2. Apply it to that bill. In QuickBooks Online this happens on the Pay bills screen, where the same vendor-credit help says QuickBooks applies the available credit automatically and has you verify the Credit Applied amount. Select only the bill you are correcting. Pay nothing in this step: the credit should cover the bill exactly, and if the screen shows any amount to pay, stop and recheck the line.

Charging the credit to the payment's account, not the bill's, keeps the bill as the one record of the cost, with its own coding, date and document. If one payment settled several bills, credit the total and apply it across them.

What does the correction look like in figures?

Harbor Supply's bill 4417 for 1,200.00, dated March 3, was entered and charged to Supplies. The business paid it by bank transfer on March 20, the feed line was categorized to Supplies instead of matched, and March was reconciled but not yet closed. Because that line is reconciled, the fix is a vendor credit dated March 31:

The balances before and after the vendor credit:

Bill 4417 leaves the payables list, Supplies keeps one charge from the bill, and the reconciled transfer is never opened.

What if the bill was entered twice or was never owed?

For a bill entered twice, keep the copy that matches the vendor's invoice and any copy a payment is linked to, and cancel only the extra open copy. In QuickBooks Desktop, void it: Intuit's help on voiding bills says the amount changes to zero while QuickBooks keeps a record of the entry for your audit trail. In other software, enter a vendor credit charged to the same account as the extra copy and apply it to that copy. Either way the false liability and the duplicate cost leave together.

A bill never owed is reversed the same way. AccountingTools' guide to accounting for liabilities defines a liability as a present obligation to transfer assets or provide services to another party as a result of a past transaction or event. A bill with no delivery, service or agreement behind it, such as one entered from a quote or for another business, has no such obligation behind it, so it is an error.

If you did receive the goods or services and the bill will simply never be paid, it is not an error: it remains a liability, and removing it is a separate question with its own evidence. Don't use this correction for it.

What if a credit or payment was entered but never applied?

Here the money side is already recorded; only the link is missing. Intuit's QuickBooks Desktop help on paid bills that still show as open names a bill credit or bill payment entered but not applied to a bill as a cause, and says to look on the Unpaid Bills report for negative amounts, which indicate unlinked bill credits or bill payments. That help has you apply them to bills through Pay Bills, and warns that matching transactions, such as a bill and a bill payment, must have the same A/P account. If yours do not, enter nothing to force the match; fixing which A/P account each sits in is a wrong-account correction, a separate question. In QuickBooks Online, the Pay bills screen applies available credits as described above, and again you pay nothing: if the screen shows any amount to pay, stop. Apply each item to the bill the vendor's statement says it belongs to, and enter nothing new: a correcting entry on top of an unapplied credit removes the same amount twice.

What changes if the bank account is already reconciled?

Treat a completed reconciliation as evidence to keep. Intuit's QuickBooks Online help on beginning-balance issues lists, among causes of a reconciliation discrepancy, a reconciled transaction that was edited, deleted, voided, moved or unreconciled, and a categorized bank-feed transaction that was undone. So in a reconciled month, make every correction through the vendor and cost accounts, by vendor credit, void of a bill or application, and leave each bank transaction exactly as reconciled. The reconciliation procedure itself is a separate question.

How do you prove the payables balance is right afterwards?

Check the result against your before copy and the bank's own statement:

• Detail agrees with the ledger. AccountingTools' guide to reconciling accounts payable describes the test: the detailed total of all payables outstanding matches the payables balance in the general ledger. That total should have fallen by exactly the bills you closed by credit, void or match; applying a credit that already existed leaves it unchanged, since the credit was already in the balance.
• Each vendor agrees with its statement. Corrected vendors' balances match their statements, apart from timing items you can name.
• Each cost appears once. In every affected cost account, the only changes from the before copy are the removed duplicates, and each bill's own charge is still there.
• The bank is untouched. The bank balance, every withdrawal and the last reconciled balance match the before copy and the bank's statement.
• Nothing genuine is gone. Every line you classified as genuinely unpaid is still open, and every bill and bank payment you confirmed as real is still in the books.
• No journals reached payables. The payables account shows no journal entries from this work.

What routine stops the same lines coming back?

Change the routine that produced the lines, or they rebuild next period:

• Record payments against their bills. Intuit's help on bills, checks and expenses says not to use a check or expense to pay an existing bill, so record each payment against the bill it settles.
• Match before you categorize. Intuit's matching help says to match when you already entered a record for the transaction, so check the payee's open bills before coding any outgoing feed line to a cost account.
• Catch duplicate bills at entry. AccountingTools' article on payables controls describes a payables system that searches automatically for duplicate invoice numbers; use such a check if your software has one, and enter invoice numbers exactly as the vendor prints them.
• Reconcile payables each month. Agree the payables detail to the ledger and read vendor statements at each month-end, so a stray line is found while its period is still open.

What if the correction would land in a period already closed and reported?

Each correction carries a date: the payment's period for a payment recorded outside its bill, since the duplicate cost sits there, and the bill's period for a duplicate or never-owed bill. If that period's books are closed and its statements have already gone to anyone, such as a lender, an investor or a co-owner, stop before entering, undoing or voiding anything in it. If its books are closed but no statements have gone out, stop in the same way. AccountingTools' definition of a prior period adjustment includes a correction of an error in financial statements reported for a prior period; whether yours is one, and where it is recorded, is a separate decision about closed periods. Lines dated in open periods can be corrected now.