How do I get rid of a negative vendor balance?
A negative vendor balance generally arises because paid vendor bills got deleted. This leaves the bill payment checks (designated BILLPMT in the check register) without bills associated with them.
When paid vendor bills get deleted, it’s like saying that you paid the vendor but didn’t owe money to that vendor. It’s like a vendor credit – which is a negative for that vendor. Does this make sense?
So the vendor bills need to be re-entered.
Also, when the vendor bills get deleted, it deletes the write off for those expenses. So your profit gets raised, which means you pay more taxes.
So re-enter the vendor bills, and apply them to the BILLPMT checks in the check register.
I hope this answers your question about negative vendor balance. Take care and thanks for writing.