Please clarify how to account

Accounting
1

We wrongly made a payment to a supplier and they returned it back,

there is no purchase bill or purchase return involved in this transaction, how to tag the transaction

2

Hello @GlobalAspire

If there is no invoice you can tag it as a payment on account

You can then refund the payment on account (this will create another bank transaction for the refund)

3

I did this (well actually the guy I bought the business from did). I posted the payment to sundry debtors (BS account). Then when the receipt came in I posted it to sundry debtors to clear the balance.

Regards
Michael

4

I would tag both the payment and refund to the Suspense account (and with the supplier’s name), with a description/note that it was an accidental payment made on 1 July, refunded on 2 July (for example).

But as long as the in and out go to the same account, it’s fine.