AP debit balance - supplier refund by BACS - how to apply?


Hi there

We have a supplier account with circa 15 invoices & debit notes which is sitting with a net overall debit balance of £466 (i.e. the owe us a refund).

Have agreed with the supplier we will accept £294 to clear the account to nil and supplier has paid this by bank transfer.

My question is how do I apply the cash received to the supplier account to bring this down to nil and write off the difference of £172? Do I need to use the function ‘AP Adjustment Entry’ and adjust all outstanding invoices/credits down to nil leaving just a balance of £294, and then somehow apply the cash refund to the final remaining debit balance?

If so, should I select a P&L code such as purchases to make the adjustments through?

Thanks for any tips.


At the time of bank receipt, select all Debit and Invoices together to adjust. Apply 294 to o/s invoices.
Once posted, use “AP Adjustments” to write-off the 172.
you can apply DM to invoices using “Apply DM/Prepayment” option and use “AP Adjustment” to write-off 172. Later apply the bank receipt to o/s invoices.