How to partially offset supplier's invoice against his outstanding debt

[mulready]

Hi, there. I have a supplier (with whom I also transact as a buyer) who has accumulated a hefty debt with me. I have now decided to withhold any future payments for his consigned goods until I recover my money. However, this being Christmas, I have agreed to pay him partially his latest invoice. I paid him GBP450 (50%) but can’t find a way to credit the remaining £450 against his receivables.
In Quickfile there is only a pay from Bank Account option, no “Other”.

I dont want to issue a credit note as in this case my profits would be artificially inflated.

Any advice ? I was wondering if I have to create a Debtors Bank Account, but seems a bit artificial. Thanks in advance.

[QFMathew]

Hi @mulready

The correct way to do this in QuickFile would be to use a contra-invoicing bank account and tag the payment as paid from there. As this is a payment on a supplier invoice, this will leave the bank account at -£450.00. Tagging a payment to a sales invoice for the same value would balance this out.

There’s further information on this, here:

Contra-Invoicing, Same Customer and Supplier, Netting-off receivables and payables

First, you will need to create a new bank ‘Contra’ Holding Bank Account, you then need to update both the sales and purchase invoices as paid to/from the ‘Contra’ bank account. If we use an example of £1000.00 outstanding on both sales and purchase invoice for the same person, the ‘Contra’ bank account will show: 1. Money In: For Sales Invoice #100** = £1,000.00 2. Money Out: For Purchase Invoice QF00** = £1,000.00 Therefore, the balance on the ‘Contra’ bank account will now be zero. N…