Deal with a contact that is both a customer and supplier

This article explains how to record invoice and bill payments when dealing with a contact that is both a customer and a supplier.

If your business has a customer who also acts as a supplier, and there is an arrangement to cancel out part or all of a supplier bill with a sales invoice, then you can deal with this by adding two manual bank transactions. Choose the same date for both of the manual bank transactions and the value will be what has been agreed.

Navigate to the 'Banking' tab at the top of the screen, select 'Bank Accounts' from the drop down menu and choose the relevant bank account from the list.

Select the ‘More’ button and choose ‘Add transaction’ from the drop-down menu.

For the first transaction, select 'Invoice Receipt' from the 'Type' drop-down menu, enter the relevant date and amount for the payment and select the appropriate invoice from the ‘Invoice’ drop-down menu.

Next, select ‘Create and Add Another’ at the bottom of the screen.

For the second transaction, select ‘Bill Payment’ from the ‘Type’ drop-down menu, enter the date and the amount of the payment and select the relevant bill from the ‘Bill’ drop-down menu.

Select ‘Create and Finish’ at the bottom of the screen to complete the process.

The net effect on the bank account will be £nil but the invoice and the bill will be marked as fully paid or partially paid, depending on the value that was agreed was agreed with the contact.