Four ways to pay
| You are | Do this | What it clears |
|---|---|---|
| Paying one invoice | Payment on the invoice's page (Enter a purchase invoice); once a return names the invoice, use the payment voucher | That invoice, by the amount you enter |
| Paying several invoices of one supplier with one cheque | Payment voucher > Add, payment type Against voucher (Pay a supplier or an expense with a payment voucher) | Each invoice you tick, by its own Current pay |
| Paying before there is an invoice | Payment type Advance | Nothing yet: the supplier is owed credit until it is matched |
| Paying a seller on the spot | A cash purchase (Enter a purchase invoice) | Nothing is owed at all |
A cheque you hand over now but which is banked later is recorded as a Cheque; when it is deposited it becomes the payment voucher (Record and deposit cheques).
Two views of the same debt
The supplier's account is a running balance: everything bought, less everything paid or returned. Each invoice also has its own Due amount and Status.
| View | How it counts |
|---|---|
| Balance (the Supplier list, the ledger and the outstanding reports) | All credits less all debits. It does not care which invoice a payment was for |
| Due amount and Status of an invoice (the Purchase invoice list) | The invoice total, less the payments that name that invoice (plus any TDS entered with them), less the returns that name it |
| Supplier ageing details and the supplier's Due status | All money paid and all returns are applied to the oldest bills first, whichever invoice they were for |
So you can owe a supplier 10,000 in total, yet the invoice list shows a recent invoice Unpaid because the money you paid was recorded as an advance, while the ageing report treats the old bills as settled and the recent one as open. Neither is wrong: they answer different questions.
What each action does to an invoice
| Action | The invoice's Due amount | The supplier's balance |
|---|---|---|
| Payment Against voucher naming the invoice | Falls by the amount (and any TDS) | Falls |
| Payment button on the invoice | Falls: it names the invoice | Falls |
| Deposit of a Cheque or Provisional cash entry started from the invoice's page | Falls: its payment names the invoice | Falls |
| Advance or Supplier payment (no invoice named) | Unchanged | Falls |
| Purchase return naming the invoice | Falls by the returned amount | Falls |
| A debit note or a journal on the supplier | Unchanged | Falls (debit note) |
| A cash purchase | The invoice is always Paid | Unchanged: no supplier ledger |
Matching an advance to an invoice
An advance has not cleared any invoice. To match it, your accountant edits the advance payment, changes its payment type to Against voucher and types the amount against the invoice (possible while the payment is not approved, reconciled or in a locked year). A journal does not change an invoice's Due amount. Until the match the invoice list keeps showing the invoice as owing, while the ageing report already treats the money as paid. Do not pay again unless the money really goes out again: it would count twice.
Paying opening bills
A supplier's old bills entered on the Purchase Opening tab are not listed under Against voucher in the payment screen. Pay them as an Advance or Supplier payment: the ageing already treats the money as settling the oldest bills. An opening total entered as one Opening amount on the supplier (Suppliers' opening balances) is listed under Against voucher and can be paid against.