In some cases we both sell to and buy from the same company - wherever possible (i.e. when it is us instigating payments) we try to keep them completely separate, but I have a company who have paid an invoice less the amount of an outstanding invoice from them to us - this therefore creates a part payment. What is the best way to record the payments of the remainder of that invoice and the purchase invoice when there is no actual payment on the bank - is it best to just create manual payments and add a note, or create some separate bank account specifically for recording these types of transactions?
This is the way to go - if you search the forum and/or knowledge base for “contra invoicing” that should give you some good examples.
Thanks Ian, found an explanation, would I create a single Contra Account or one per Supplier/Customer pair?
One single account is fine, each time you process a contra payment you’ll get a cluster of three (or more) transactions on the same date that all net off to zero - money in for the sales, money out for the purchases, and the balancing payment to or from your main bank account (depending whether you’ve bought more than you sold or vice versa).
Thanks. Does it make any difference which bank type I choose (Current / Cash etc.)?
Not particularly, the account type is only for categorising things in the bank accounts summary view. “Merchant” account is probably the most accurate classification.
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