Hi guys. I received a late payment fee invoice from a supplier and don’t know how to record it correctly in Manager since the late payment feature is only available for sales invoices. What is the correct way to make payment against such an invoice to a supplier since it’s not a part of my regular purchase invoices? Also, if I were to create a similar invoice reflecting all the late payment fees owed to me by a client how would I do that? Thank you in advance.
There are a couple possibilities, depending on how your chart of accounts is organized:
- If your supplier modified the original sales invoice, edit your original purchase invoice to match. Add a new line item for the late payment fee. You might post that to an inventory item (with zero quantity), an interest expense account (because late payment fees are really a form of interest), a dedicated fee expense account (if this is a common situation for you), or miscellaneous expenses.
- Create a new purchase invoice if your supplier has issued a new sales invoice. The same allocation options apply.
- Create a payment, skipping the purchase invoice.
Just enter a payment. Post the payment against Accounts payable and the appropriate purchase invoice if you used the first or second options above. Post directly to an appropriate expense account or Inventory on hand if you used the third option.
You should only do this if late payment fees were part of the terms of your original sales invoices. Then you should follow the procedures in the Guide: Assess late payment fees | Manager.