Hi how would you deal with a deduction at source from your customer who is also your supplier. They have netted a liability against a sales invoice. Less received?

Mdawini_23 · ‎November 30, 2023

We received £24,000 from a customer instead of £27,000 as they deducted a supplier invoice of £3,000. How can I allocate payment in full for both customer and supplier account and make sure the bank reconciles?

GeorgiaC · ‎November 30, 2023

Hi Mdawini_23, thanks for posting on the Community

When you have a customer who is also a supplier in QuickBooks, you can record contra payments using a journal entry. The journal entry can then be applied as payment against an invoice/bill. To do this:

1. Select + New > Journal entry

2. On the first line, choose the account Debtors (or Accounts receivable), enter the amount in the relevant Credit or Debits field, and select the customer in the Name field

3. On the second line, choose the account Creditors (or Accounts payable), enter the amount in the relevant Credit or Debit field, and select the supplier in the Name field

4. Save and close

To link the journal entry to an invoice, go to the customer > new transaction > payment and tick the invoice showing under Outstanding transactions against the journal entry under Credits.

To link the journal entry to a bill, go to the supplier > new transaction > cheque and tick the bill against the journal entry as above.

View solution in original post

GeorgiaC · ‎November 30, 2023

Hi Mdawini_23, thanks for posting on the Community

When you have a customer who is also a supplier in QuickBooks, you can record contra payments using a journal entry. The journal entry can then be applied as payment against an invoice/bill. To do this:

1. Select + New > Journal entry

2. On the first line, choose the account Debtors (or Accounts receivable), enter the amount in the relevant Credit or Debits field, and select the customer in the Name field

3. On the second line, choose the account Creditors (or Accounts payable), enter the amount in the relevant Credit or Debit field, and select the supplier in the Name field

4. Save and close

To link the journal entry to an invoice, go to the customer > new transaction > payment and tick the invoice showing under Outstanding transactions against the journal entry under Credits.

To link the journal entry to a bill, go to the supplier > new transaction > cheque and tick the bill against the journal entry as above.

Mdawini_23 · ‎November 30, 2023

Hi GeorgiaC

Thanks for the prompt response and the solution was perfect for this scenario. greatly appreciated.

have a nice day. :)

FritzF · ‎November 30, 2023

That's awesome, Mdawini_23.

I'm happy to know that the steps shared by my colleague was able to help you resolved your concern.

Feel free to post again here in the Community or leave a comment in this thread if you have more questions about QuickBooks. Take care always.

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Hi how would you deal with a deduction at source from your customer who is also your supplier. They have netted a liability against a sales invoice. Less received?