I inadvertently sent three checks to incorrect vendors, all of whom deposited the checks. What is the best way to clean this up in the GL since all three vendors have different distributions codes?
Thank you!
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Bill, because banks don't look at the checks anymore. Large companies haven't looked at checks when receiving them in at least 12+ years (had an AR issue and our lockbox caught it - the customer put the wrong checks in every envelope. We returned the check, and the customer called us and told us a large communications company had cashed their mortgage payment....)
Our solution in the end was to create a suspension account and, through a series of credit memos/invoices, corrected the distributions. I suppose this was the long way of doing your solution, Leslie.
Two of the vendors deposited their checks and one returned its check.
Thank you for the help!
By the way, I like the technical correctness of this answer.
Three Vendors with three different distributions - you write the check to each one ( correctly doing the distribution for each ) then send the check to the wrong vendor who in turn cashes the check.
In Payables each of the vendors shows as paid and the distribution is to the correct accounts
If the Vendors are not complaining about how much they were paid, I am guessing that is was a correct amount.
Since the checks were deposited I am thinking you don't need or want to destroy them - but at the same time I am having a bit of problem figuring out what is wrong with the GL. Unless there is more to the story, I am not sure I can correct anything.
MY question - why are the companies able to deposit a check that is not payable to them?
Seems like that is a bit of a problem - but not one that we are going to solve.
Hi,
You've got a couple of things going on here. Your payables records and your GL records are wrong. Since you only asked about the GL, I'll tell you what I would do. You need to do 'correcting' entries. Essentially a correcting entry starts with a reversing entry to back out what was previously posted and then creates an entry that would include the correct distributions. If you try these entries in the General Entry screen, you will initially get an error. You'll need to allow the correction of entries coming up from sub-ledgers.
To allow the correcting entries, open the General Ledger setup window and check the box to allow Voiding/Correcting of Subsidiary Transactions.
Kind regards,
Leslie
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