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.