QuickBooks 2014 - Credits on Bill Payment Stubs - Wonderful or Weird?

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One of the chief complaints I have heard from my clients using QuickBooks is the inability to properly document ‘vendor credits’ used to pay ‘vendor bills’. 

Normally in QuickBooks you select the Pay Bills feature from either the Vendor menu or the Home Page.  QuickBooks displays the Pay Bills window allowing you to choose the payment(s) you want to make. If you select a Bill from a Vendor for which a ‘Vendor Credit’ has been recorded, QuickBooks displays the number and total of credits available. If you click the Set Credit button, QuickBooks displays the Credit tab of the Discount and Credit window, listing all credit memos from the vendor. You can select the discounts you want to apply, then select the Done button to close the window and return to the Pay Bills window.  Now here is where the problem has come in, if you selected sufficient vendor credits to pay a vendor bill ‘in full’, they QuickBooks simply recorded the financial transaction and there was never any documentation of which vendor credit(s) were applied to which vendor bill(s).  (Slide 1)

But all of this has changed in (all versions and flavors) of QuickBooks 2014, when paying a vendor bill in full with a vendor credit, the paid bill(s) and their associated credit(s) will be documented on Bill Payment Stubs. (Slide 2)  Note that the Payment Summary tells you that "Bills highlighted in bold were paid entirely by discount or credits, there aren't any checks to print for these bill payments"

To print the Bill Payment stub to send to the vendor: from the menu bar, select File > Print Forms > Bill Payment Stubs. (Slide 3)

But there is an weird issue with this; if you look in the Vendor Center, the transaction window will show three different transactions; the Bill for $35.00, the Credit for $35.00, and a Bill Payment Check for $0.00. (Slide 4) If you double-click on the Bill Payment-Check, to open the transaction you see a check like the one shown (Slide 5).

The ‘weird’ thing is that only the ‘Vendor Bill’ is shown in the details, the credit is not shown (anywhere); the Memo notes: “QuickBooks generated zero amount transaction for bill payment stub”. This zero dollar check does not reflect the credit being used for the payment, nor do any of the reports on the transaction ribbon; the transaction history doesn’t show the credit, the transaction journal does not show the credit, nor does the QuickReport.

Now let’s take ‘weird’ even one step further.  Let’s assume for some reason you ‘delete’ the ‘Zero-dollar’ Bill Payment Check (this could happen since this zero check is now going to show in your bank register).  Well the vendor center still shows the Vendor Credit and the Vendor Bill, but when you open the History for either of them, they show a link to their counterpart. (Slide 6)

So even though the transaction Zero-dollar Check QuickBooks created to link the Bill and the Credit together for purposes of creating the Zero Dollar Payment Stub has been deleted from QuickBooks, the link between the Bill and the Credit appears to remain intact.

I am hoping that the R-3 release of 2014 may resolve some of this ‘weirdness’; if it does, then this new feature of QuickBooks 2014 will go a long way in resolving one of the big complaints ‘my clients’ have had with respect to Accounts Payable, although most of them would still prefer to have Vendor Credits listed along with Vendor Bills in the Pay Bills window.