Handling situation where customer is also supplier

If you have a customer who is also a supplier, you may want to offset the outstanding customer and supplier invoices. This is known as a contra entry.

In Manager, all sales invoices are sub-accounts of Accounts receivable while purchase invoices are sub-accounts of Accounts payable. This means you can easily credit sales invoices and debit purchase invoices using journal entries.

For example, you have a customer who owes you 1,000.

At the same time you have made a credit purchase of 200 from this customer.

Instead of paying your customer 200 while they pay you 1000, you can make a contra entry which decreases the balance due on your sales invoice by the amount on the purchase invoice.

In order to do this, go to Journal entries tab.

Click New Journal Entry button.

In your journal entry, credit the sales invoice by 200 and debit the purchase invoice by the same amount.

If there are more invoices, instead of specifying individual invoices, you can also contra amounts between customer and supplier accounts directly. As a result, Manager will auto-allocate the outstanding sales and purchase invoices on a first-in-first-out basis.

Click Create button to save the journal entry.

Your purchase invoice will be marked as paid in full even though your payment was actually a contra.

The balance owing on the sales invoice decreased by 200.


Thanks this is one way to do it however need some extra work…

Wouldn’t it be better if the suppliers AND customers are listed as drop-down menu in Money Spent and Money Received Tabs as PAYEE to add the payments direct to it and Manger would automatically adjust the balance…

What you describe will not work, @cometomama, because Spend Money and Receive Money require the movement of cash in some form. The offset transaction does not involve cash going anywhere. It is only an adjustment of who owes what to whom.

Remember that in double-entry accounting, debits must equal credits for every transaction. When you Spend Money or Receive Money, Manager automatically involves the cash account as one side of that transaction. The balancing entry is the account to which the transaction is allocated. In the offset transaction, the goal is to balance the debits and credits between Accounts receivable and Accounts payable or Customer credits and Supplier credits.