Net off a bill and bill credit note

This article explains how to match a bill to a bill credit note in FreeAgent.

The steps you need to take depend on whether you’re not going to pay the bill or going to pay part of it.

If you’ve received a refund for a bill that you’ve already paid, find out how to enter a refund from a supplier.

If you’re not going to pay the bill 

It’s important to keep an accurate record of all the activity in your accounts. Therefore, if you’ve added a bill in FreeAgent and you’re not going to pay it, we recommend that you don’t delete the bill and follow these steps instead.

1. Add a manual payment to the bill

Navigate to the ‘Bills’ tab at the top of the screen and select the reference number of the relevant bill.

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Select 'Add a manual payment'.

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Enter the date of the manual payment as the date of the bill credit note given to you by your supplier and select ‘Create and Finish’ at the bottom of the screen.

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2. Create a bill credit note for the full amount of the bill

Next, navigate to the ‘Bills’ tab at the top of the screen, select ‘Add New Bill’ and follow the steps for adding a bill credit note in FreeAgent.

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In the 'Bill Contents' section, enter the total price of the bill, or add multiple line items if the bill credit note has more than one line item, as a negative amount.

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Enter any remaining necessary information and select ‘Save and Review’ at the bottom of the screen.

3. Add a manual payment to the bill credit note

Once you’ve created the bill credit note, select 'Add a manual payment'.

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Enter the date of the manual payment as the date of the bill credit note given to you by your supplier and select ‘Create and Finish’ at the bottom of the screen.

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Once you’ve followed these steps, the bill will show as ‘Paid’ and the bill credit note will show as ‘Refunded’ in the ‘Bills’ area of FreeAgent.

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If you navigate to your business bank account, you’ll see a ‘Money In’ and a ‘Money Out’ transaction for the same amount.

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If you’re only going to pay part of the bill 

If you’ve created a bill in FreeAgent and you’re only going to pay part of it, please follow the steps below.

1. Add a manual payment to the bill

Navigate to the ‘Bills’ tab at the top of the screen and select the reference number of the relevant bill. 

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Select 'Add a manual payment'.

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Enter the date of the manual payment as the date of the bill credit note given to you by your supplier. Enter the amount that you don’t intend to pay and select ‘Create and Finish’ at the bottom of the screen. 

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2. Create a bill credit note for the amount of the bill you’re not going to pay

Next, navigate to the ‘Bills’ tab at the top of the screen, select ‘Add New Bill’ and follow the steps for adding a bill credit note in FreeAgent.

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In the 'Bill Contents' section, enter the amount of the bill that you’re not going to pay as a negative amount.

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Enter any remaining necessary information and select ‘Save and Review’ at the bottom of the screen.

3. Add a manual payment to the bill credit note

Once you’ve created the bill credit note, select 'Add a manual payment'.

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Enter the date of the manual payment as the date of the bill credit note given to you by your supplier and select ‘Create and Finish’.

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Once you’ve followed the above steps, the remaining amount of the bill will continue to show as ‘Open’ in the ‘Bills’ area of FreeAgent. However, the bill credit note will show as ‘Refunded’ and will display the amount that you are not going to pay.

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4. Explain the remaining value of the bill

Finally, to settle the bill in your FreeAgent account, you’ll need to explain the amount which you paid, as a bill payment.

To do this, navigate to the ‘Banking’ tab at the top of the screen, select ‘Bank Accounts’ from the drop-down menu and choose your business bank account from the list.

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Select the transaction which relates to the payment you made, select ‘Bill Payment’ from the ‘Type’ drop-down menu and select the relevant bill from the ‘Bill’ drop-down menu.

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Select ‘Explain Transaction’ to complete the process. Find out more about how to pay a single bill.

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