balancing credit note from supplier
Hello there,
We have received a credit note from a supplier for a few invoices but I am unsure how to now balance out the outstanding invoices in thier name.
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Hi Hutchsion
Would you mind expanding on the situation?
Is it a case of they are a supplier and a customer? And they have issued you a credit note which is to be offset by the outstanding invoices they have i.e. no money is changing hands they are just paying their open invoices with the supplier credit?
Hi Steven,
yes exactly. They are both a supplier and a customer. I think I need to create a supplier return?
Hi Hutchsion
In short, you want to create a holding account and use that account for the supplier and customer payment. Below are the full way to deal with that situation:
- Navigate to Accounting>>Chart of accounts.
- Select Create account and generate a holding bank account.
- Once that account has been created, go to Purchases>>Create supplier payment
- Enter the payment as you would normally for those purchases but with the Bank account being set to be that holding account
- Complete a similar thing to the supplier payment but with Sales>>Create customer payment. Ensure that the customer is selected and that the holding account is the bank account used.
What the above process would do is take funds from the holding account with that supplier payment and then add those funds back in when you do the customer payment. No money is exchanging hands but will close the allocated purchases/sales when processed.
