paying a supplier who is also a cutomer

PRSquire

I had a suppliers invoice for $1571.92

He owes us $110 and he wanted me to subtract the amount he owes us because he's in the UK

This I have foolishly done, so I paid him $1461.92

Now I'm trying to reconcile the accounts and I'm in all sorts of bother.

I've read about using contra accounts but the example shows debit and credits for the same amount

how do I do it for uneven amounts so I can reconcile the accounts

Steven_M

Hi @PRSquire 

 

A contra account situation would be the way to go, I've outlined the process below for yourself:

 

1. Navigate to Accounts>>Accounts Lists>>New - give the account a number, name and set the account type to be Bank
2. Once that has been set up, go to Sales>>Receive Payments
3. Set the Deposit to account to be that newly created account and record the payment for that invoice as per normal
4. Navigate to Purchases>>Pay Bills
5. Set the Pay from account to be that newly created account and record the payment against that purchase for the amount that has been "paid" through that sale i.e. $110. Record that payment.
6. Once that has been recorded, go to Purchases>>Pay Bills
7. Process a second Pay bills transaction for that supplier with the required bank account and the amount they actually paid i.e. $1461.92

Basically, in short, the above process puts the money from that sale transaction into a holding account, you then use that holding account to reduce the amount of the purchase to give you the amount that was actually paid.  You then enter the amount you are actually paid as another pay bills transaction to the desired bank account to reflect want occurred and thus allow the account to be reconciled.