Paying for invoice B with negative balance of invoice A


I have the following scenario and wonder what the correct approach would be.

Invoice A is overpaid by $88. Therefore, balance due is -$88.

The customer wants to buy a new item for $74. Invoice B is thus created and has balance due of $74.

I should mention Invoice A is several months old, and the customer recently decided to apply his credit to a new purchase, so changing the original invoice isn’t optimal.

To go about this transaction, I went into Invoice B, clicked Receive Money / New Cash Transaction. I did not select a cash account, thus it auto selected Suspense.

Under items, I have:
Accounts Receivable, Invoice B, $74.
Accounts Receivable, Invoice A, -$74.

The outcome is that Invoice B is paid, and Invoice A has a remaining balance of -$14, which can be fixed by issuing a refund for the remaining balance.

However, when I look in my cash transactions tab, I see Invoice B has a transaction against the red colored suspense account for a balance of 0, as expected. However, I realize the Suspense account should never be used (even though this particular transaction doesn’t generate a balance for suspense and doesn’t show up on the summary).

In any case, is there a better way to manage credit between invoices without involving any type of balance accounts (cash or bank) since technically no balance is transferred?

Find the receipt for the overpaid invoice. Remove the invoice designation so Manager can auto-allocate. Read the Guides about auto-allocation.

Here are the guides Tut was referring to:

All Guides (bookmark this - or find it in the menu at top of the Manager site)

Avoid automatic credit allocations
Resolve issues with automatic credit allocations

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Thank you for the replies, they were helpful.

I can’t fully leverage the tools because I lump all customers for the storefront under a storefront customer in Manager (we also have b2b customers who have an account each, and treat the online shop as a separate customer of the business).

Although it is a hack, I changed the suspense account on my original transaction to an actual cash account. At least these invoice adjustments are recorded on their respective transaction histories, even if there is a 0 balance transaction under the cash account. It would have been confusing with special accounts or using customer credit as it would effectively have been a “store wide” credit applied instead of going by the individual invoices.

Thanks for the feedback!