This Podcast Is Episode Number 481, And It's About Common Construction Contractor Bookkeeping Issues With Accounts Payable Accounts Payable keeps track of the bills owed to a supplier or subcontractor.   A proper Construction Contractor Bookkeeping System uses the Accounts Payable feature to track unpaid bills. The bank wants to get paid, and unlike the contractor who is embarrassed to call an old customer, the bank is very willing to call early and often for any outstanding payments due. Again, the banker wants to know how long it takes to pay your bills.   Another reason to keep a proper Construction Contractor Bookkeeping System is to be sure you did not overpay a supplier or subcontractor, cell phone, the internet, liability insurance, vehicle insurance, and more.   The bills keep coming depending on your payment schedule; you may receive the past reminder notice before the original invoice arrives. Some utility companies have a history of what appears to be randomly sending the original bill.   When you do not immediately pay the invoice, some insurance companies will mark this as late and subject you to a late charge. Based on where the Out of State payment needs to be mailed to, it may be impossible to send (by regular mail) and be received on time.  Hence – Online Payments are Accepted. The benefit to The Contractor is proof that the payment was made with a time and date stamp (print) and usually an auto-generated email as backup confirmation that the payment was made.  Overpaying subcontractors can quickly happen if checks are written on the job site. When using handwritten checks, use "Carbon-less Checks" to have a written record of payments made. The charges can be added to the Bookkeeping System without waiting to clear. Bookkeeping Issues Sometimes Accounts Payable will have transactions in Accounts Payable that do not belong there. It is easy to put transactions in the Accounts Payable (A/P) Aging Summary and then forget about them. QuickBooks does not automatically look to see if you put something in Accounts Payable when writing a check. Short-cutting and putting in a bill will distort the financial statements and will not have a clear understanding of details. For example, credit card balances or monthly payments. Credit cards like checking and savings accounts must have all their transactions entered and reconciled. Taxes due to the Internal Revenue Service, State, and Local Payroll taxes or Sales tax-related obligations. Employee or owner's child support payments do not belong in Accounts Payable. Payments to and from the company and between owners are Owners Draw, Loan to Members, or Loan To Shareholder, and related transactions do not belong in Accounts Payable because you are not an outside vendor. Do not create a bill for the company to pay. Anytime it is a company expense, the company should pay direct. There is nothing messier than constant reimbursements to the owner by the company. A bill with no detail looks like a bogus payment to the owner trying to make money out of the company that is being masked as an expense. The old saying "Devil In The Details" Transactions in QuickBooks need to be explainable without any need to have a story problem to go with it. The Memo line in QuickBooks is short for a reason – less is better and more transactions are better than fewer transactions. Annual tax returns are many pages giving the detail (which may be stated repeatedly on numerous pages). As with Accounts Receivable, the same type of detail applies to Accounts Payable (A/P) Aging Summary. Are the transactions Current, 1-30, 31-60, 61-90, >90 and Total? Add in the dimension of payment can be done from multiple banks and credit card accounts, and in the case of suppliers, Credit may be applied. Any time there are unpaid balances, the first place to look is, did the amount get paid directly from the checking account? Was the amount slightly different (including a...