Vendor/Customer Payment
We have a vendor that also used our services. We want to deduct the amount they owe us, from the amount we owe them. What do I do?
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10/27/09 3:53pm PDT
Hi-here are the instructions:
Paying a vendor bill with a customer invoice
Make sure the name is in both the Vendor and Customer lists. Since we cannot have exactly the same name in both lists, make one of the names slightly different. For example, John Smith as the Customer name and then John L. Smith for the Vendor name.
First, create a Journal Entry:
Go to the Banking tab and click Make Journal Entry.
On the first line of the Journal Entry:
Choose Accounts Receivable for the account.
Enter the amount to be paid in the Credit column.
Choose the appropriate Customer in the Name field.
On the second line of the Journal Entry:
Choose Accounts Payable for the account.
Enter the same amount to be paid in the Debit column.
Choose the appropriate Vendor in the Name field.
Click Save.
Second, apply the Journal Entry to the open invoice:
Go to the Customer tab and click Receive Payments.
Choose the appropriate Customer.
Select the Journal Entry in the Credits section and the Invoice to be paid.
Click Save.
Third, apply the Journal Entry to the open bill:
Go to the Vendor tab and click Pay One Vendor.
Select the appropriate Vendor.
Select the Journal Entry in the Credits section and the Bill to be paid.
Click Save.
The outstanding bill should now be paid with the outstanding invoice.
OR
Paying a customer invoice with a vendor bill
Make sure the name is in both the Vendor and Customer lists. Since we cannot have exactly the same name in both lists, make one of the names slightly different. For example, John Smith as the Customer name and then John L. Smith for the Vendor name.
First, create a Journal Entry:
Go to the Banking tab and click Make Journal Entry.
On the first line of the Journal Entry:
Choose Accounts Payable for the account.
Enter the amount to be paid in the Debit column.
Choose the appropriate Vendor in the Name field.
On the second line of the Journal Entry:
Choose Accounts Receivable for the account.
Enter the same amount to be paid in the Credit column.
Choose the appropriate Customer in the Name field.
Click Save.
Second, apply the Journal Entry to the open invoice:
Go to the Customer tab and click Receive Payments.
Choose the appropriate Customer.
Select the Journal Entry in the Credits section and the Invoice to be paid.
Click Save.
Third, apply the Journal Entry to the open bill:
Go to the Vendor tab and click Pay One Vendor.
Select the appropriate Vendor.
Select the Journal Entry in the Credits section and the Bill to be paid.
Click Save.
The outstanding invoice should now be paid with the outstanding bill.
--I hope you find this post helpful--
We cannot hold a torch to light another's path without brightening our own. ~Ben Sweetland
We cannot hold a torch to light another's path without brightening our own. ~Ben Sweetland
10/13/10 1:46pm PDT
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These instructions were very helpful - thank you! I had this same scenario however, I found I could not make a journal entry using an A/R and A/P account in the same entry - so I used the listed instructions [thank you again!] with one added step. I created two separate entries - Debit accounts payable and credit a suspense account. Save. Then credit accounts receivable and debit the same suspense account [using the same date]. Save Then I continued using these instructions to apply the debits and credits to customer and vendor accounts.
