A vendor owes us more money,and they paid us net amount, how could we clear outstanding of the invoice, bill, and the net receipt ?

Hi there, Emily!

In this scenario, we'll move funds ($5,425.62) from Accounts Receivable to a Clearing Account via journal entry. Then, use it to pay the bill. Basically, this clearing account is just a bridge to move the funds between A/R and A/P and must always have a zero balance.

Step 1: Create a Clearing Account, a.k.a. Barter, or Wash Account.

1. Click the Gear icon and choose Chart of Accounts.
2. Click on New, select the Bank for the account type, Savings or Cash on hand for the detail type, and name it as Clearing, Barter, or Wash Account
3. Click Save and close.
   
   

Step 2: Move $5,425.62 from A/R to the clearing account via journal entry. This will put credits in the customer's profile, too.

1. Click on +New and select Journal Entry.
2. On the first line, select the Clearing Account and enter $5,425.62 in the DEBIT field.
3. On the second line, choose the Accounts Receivable account, enter $5,425.62 in the CREDIT field, and tag the customer's name in the NAME field.
4. Click Save and close.
   

Step 3. Pay the $5,425.62 bill against the clearing account.

1. Open the bill and click Mark as paid.
2. In the Bank/Credit account field, select the clearing account.
3. Enter $5,425.62 in the Amount field.
4. Click Save and close.
   

Step 4: Pay the invoice using the credit created in Step 2.

1. Open the invoice.
2. Choose Receive Payment.
3. Select the journal entry in the Credits section.
4. Click Save and close.
   

Step 5: Pay the remaining balance of the invoice.

1. Open the invoice.
2. Choose Receive payment.
3. Enter the remaining amount.
4. Click Save and close.

That will do it. If you have additional questions, you can always go back to this thread.