User has overpayment to Vendors and no current bill to offset this from.
For the duplicate payment, we could create a vendor credit if it is known to both the vendor and the company that it will be offset against a future bill for a specific item.
Sometimes, the company is not sure of what item they will be purchasing in the future or the vendor has made no offer to create a credit memo for the overpayment only an offer to offset against a future bill.
Since we don't know what Item it would be credited against, we could create a journal entry:
- The journal entry is a debit to the Accounts Payable account and a credit to Cash
- Link the Accounts Payable line by putting the vendor in the Name column then saved the journal entry
- You can check by viewing the vendor record > click Make Payment > the journal entry should be visible
Note: when the journal is applied to the Bill, no Bill Payment record is created. The GL impact of a Bill Payment is a debit to Accounts Payable and a credit to cash. Paying a future bill with the journal entry is both a debit and a credit to Accounts Payable. Both these entries already exist in the books and it is only a matter of linking the bill to the journal entry (as Related Records) and vice versa.
1. Create a Vendor Credit by going to Transactions > Payables > Enter Supplier/Vendor credits
2. Create a Deposits by going to Transactions > Bank > Make Deposits
3. On the Account field, select the bank account where the deposit will be added.
4. On the Deposits tab > Other Deposits subtab, fill up the following fields:
a) Name - Name of the Vendor
b) Amount - Amount of the deposit
c) Account - Enter the the same accounts payable account used on the credit
d) Payment method
5. Click Save
6. Now we have to apply the deposit to the vendor credit. We have 2 options for this:
1. Transactions > Purchases/ Vendors> Pay Single Vendor
2. On the Payee field, select the name of the vendor. You will notice that the Vendor Credit and Deposit appear in the list at the bottom of the page
3. On the apply tab, check the boxes in the Apply column beside the vendor credit and deposit
1. Transactions > Purchases/Vendors > Enter Vendor Credits > List
2. Click the Edit beside the Vendor credit you want to associate with the deposit
3. On the Items tab > Apply subtab > Check the Apply columns beside the deposit