Apply a sales invoice to a bill
Apply an invoice to a bill for a contact who is both a customer and a supplier. Offset (contra) the invoice and bill amounts while reconciling the payment for the difference in value or offset them before any payment takes place
Apply a sales invoice to a bill - partial payment
If payment has been made or received through your bank account, you can use Find and Match during bank reconciliation to offset the sales invoices and bills for the same contact. Make sure you select the checkbox next to Show Spent Items or Show Received Items to see all outstanding transactions for the contact.
Apply a sales invoice to a bill - no payment
Contra invoicing should be treated the same as a normal invoicing situation. First, record the two transactions separately by raising an invoice and a bill. If the sales invoice amount is less than the bill amount, then, mark the sales invoice as paid and reduce the amount owing on the bill, by following these steps:
- Go into your chart of accounts, select the Suspense account and tick the box Enable payments to this account.
- Go into the sales invoice and enter the payment details. Instead of selecting the bank account, select the Suspense account. Then, enter a note in the Reference field, such as 'offset bill'.
- Go to the bill and repeat the above steps, adding a payment for the same amount.
The net effect in the Suspense account for this transaction should be zero. The Sales outstanding balance should be zero and the Purchases balance is now reduced by the amount of the sales invoice.
If you have an ongoing contra arrangement with a contact, you might want to create a separate suspense account to record the transactions. This will make reconciling easier.