What to record if someone pays my purchase invoice and I owe that person?

Hello :slight_smile:

The closest issue to mine is this, here is the procedure:

  • I create a customer that pays my purchase invoice
  • I press New Payment on the invoice and add a new line
  • I choose Accounts Receivable, then the customer, then the invoice money amount in negative

The issue here is that It would decrease the (Accounts Recievable), Instead I want it to increase the (Accounts Payable) since I owe that person now.

I tried to make the person into a supplier but if in the third step above I chose (Accounts Payable) then It doesn’t allow me to choose a custom supplier. :frowning:

My final goal is to also have a fee, since that person would charge me for that transaction. what is the best way to do this? I could try to create a bank/cash account for that person and do (Inter Account Transfer) and manually add the fee. would that be the best option?

Thanks for reading :slight_smile:

You create a second supplier - let’s call him Supplier B
You have entered a Purchase Invoice to Supplier A (the original supplier) to whom you owe the payment.

Supplier B pays Supplier A on your behalf - you record this using a Journal Entry - for example if invoice was for 10,400 Euro

If there is a fee involved, then you should record that as a Purchase Invoice from Supplier B for the amount of the fee

Supplier B’s account now records the correct amount that you now owe

Thanks for the reply :slight_smile:

That was great, however I found it easier to add two new lines in your picture for the fee, one credit supplier B with the fee, and one debit a new expense sub-account that i called money transfer fees

That will work but may not be strictly legal as you are charging an expense, without any supporting documents - for example is there VAT on the fee?

For my specific situation its fine :slight_smile: but I agree that your solution is more reasonable.

No :slight_smile: