• From: USA
  • Registered: 07/03/2012
  • Posts: 11

Topic: Handling a payment partially credited by a purchase

I have a supplier who is also a customer. I currently have an invoice due to that supplier ($X) and they have an invoice due to me ($Y). $X is larger than $Y, so we've agreed that I will pay the difference, rather than us paying $X and them paying $Y.

I can't figure out how to handle the invoices in FA. You can credit an invoice, but that implies a sale was cancelled, which isn't the case here.

The best I can figure is to record the transaction as if the two payments actually occurred. But that means that I will need to account for that when I reconcile my bank account, which, of course, will only show one payment from us. If there aren't too many of these situations, that would be a possibility, but it seems to me there should be a better way.

Does anyone have a suggestion on the best way to handle this situation?

2 Reply by elax (edited by elax 10/08/2013 09:17:24 pm)

  • elax
  • Senior Member
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  • From: UK
  • Registered: 05/17/2011
  • Posts: 326

Re: Handling a payment partially credited by a purchase

payments and invoices are different stuff, you need to enter both invoice properly $Y and $X. 


Now the problem is the payment. The easiest is to use the cash account for the difference.
In FA your customer is in fact a customer and a supplier let's call them : customer and supplier
you paid your supplier X-Y :
- record the corresponding payment (to the supplier). That's what you'll see on your bank statement.
then pretend the customer  (not the supplier) paid you cash. The invoice is still missing Y
- record customer paid Y cash
pretend you gave the money to your supplier
- record supplier receive Y. cash

That's it. You have 0 in cash (Y-Y). invoice Y has been paid (Y cash) and invoice X has been paid (X-Y bank and Y cash).

/Elax

  • From: USA
  • Registered: 07/03/2012
  • Posts: 11

Re: Handling a payment partially credited by a purchase

Nice, elegant solution. Thanks very much, it is exactly what I need.

4 Reply by elax (edited by elax 10/08/2013 10:31:15 pm)

  • elax
  • Senior Member
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  • From: UK
  • Registered: 05/17/2011
  • Posts: 326

Re: Handling a payment partially credited by a purchase

Thanks,

Next time don't agree on that and let each side paid its bill, that will save you (and your supplier/customer accountant) time ;-)

  • Registered: 11/12/2013
  • Posts: 2

Re: Handling a payment partially credited by a purchase

hey friends...
i think we should check the background of supplier or customer means their  history we  can get from clients.so i suggest before making final deal be double sure because a account receivable on time is important part of business.some companies are preferring account receivable for outsourcing purpose because when they outsource their business process experts easily retrieve their cash on time...