Purchases from a supplier using credit from another supplier

I’m trying to figure out the best way to use QuickFile to account for a purchase from a supplier which was paid for with finance in the form of a fixed term loan from another supplier…

For example:
Item purchased for £1,000 from Supplier A.
Supplier A raises an invoice for £1,000.

Supplier A’s invoice is paid for by Supplier B.
Supplier B raises an invoice for £1,200 (to cover the original invoice amount plus interest/charges on the loan).

I then pay back Supplier B over a fixed term (for example 24 months).

Has anyone used QuickFile to record this type of transaction before, or have any suggestions on the best way to do it?



I would imagine you’d need to create a loan account in the bank management area and pay the invoice from there. This will leave the loan account £1,000 in the red. Supplier B then invoices you for £1,200 and the installments are recorded as bank transfers from your current account to the loan account when each installment is paid.

Thanks Glenn.

That’s what I initially tried… I created a transaction on my current account and marked it as a bank transfer to my loan account. This credited the account correctly as I would expect. The problem I then faced was that I couldn’t then tag that transaction as a payment against a purchase invoice.

Is there another way of doing this?



That transactions is already explained, what you would then do is enter a second transaction for the balance of the purchase invoice and tag it to the purchase.

Hi Glenn,

The problem is that in doing it this way, I will incorrectly end up with £2,200 liabilities instead of £1,200 (£1,200 against the creditors control account from the purchase record and £1,000 against the loan account).

Also, when I come to make a payment, I can either transfer it directly from the current account into the loan account - which will credit the loan account… Or I can record a payment against the purchase from the current account which will credit the creditors control account - but I cant do both with 1 payment.

The only way I can think of doing this is to not have the supplier purchase record, and just use loan account. Although it’s a shame as I liked the idea of being able to view previous loans in the supplier screen against this supplier with full payment history against each.

What’s your thoughts?



Hi Glenn,

Not to worry with this. I have gone with the traditional loan accounting approach… Using a loan account and creating transactions for payments and interest each month.

Thanks for your help anyway.


I was waiting on my colleague to get back to me on this, I’m afraid I’m not an accountant so can only offer general guidance. Usually anything like this is handled through some sort of bank (loan) account in Quick File.

Although to keep things simple is it possible for you to just log a single invoice for £1,200 and make incremental payments over the period? That way the creditor control account will gradually reduce and you’ll have a single invoice for the goods purchased.

Create a loan account called ‘Loan from Supplier B’ and pay supplier’s A invoice from the new Loan Account. See the posting below for further information on setting up the loan account, interest and repayments:


Thanks Guys,

I have already gone with the traditional loan approach as Joe describes.
I was trying to see if I could set the lender’s up as suppliers, and link the loans to the supplier records some how - but not to worry… The way that Joe has described it works fine.

Thanks again for coming back to me.

And keep up the good work; this is one of the best accounts packages I have come across in terms of usability, and the fact you are allowing people to use if for free is really commendable. I will definitely use your professional accounting services when the need calls for it.

Looking forward to playing with the API too :smiley:

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Thanks Damien, glad you like the software :smile: Let us know if you need any help with the API.