In this article we explain how to match payments and credit notes to pay or part pay an invoice.

Do this so:

• You can see which invoices still need to be paid
• The outstanding balance for supplier contact is accurate
• The invoice doesn't appear on supplier statements or aged creditor reports

Match a credit note or payment to an invoice. Once matched:

• The system marks the invoice as paid or part-paid, and it updates the outstanding amount accordingly

• The system updates the balance of the supplier account

• If you use the Cash Basis VAT scheme, the system records the value on your next VAT return

Use the Unallocated Receipts or Payments report to identify payments that aren’t allocated to a purchase invoice.

If you've matched the payment or credit note to the wrong invoice you can unallocate it. 

Match a single payment on account or a credit note

1. From Contacts, select the supplier.
2. From the Manage drop-down, choose Account Allocation.
3. Check the checkbox for each payment on account or credit note. This action updates the "Outstanding" value to "0.00" and reflects the amount moved in the "Paid" column.
4. The Left to Allocate box at the bottom should be 0.00.
5. Click Save.

Match multiple payments or credit notes

1. From Contacts, select the relevant supplier.
2. From the Manage drop-down, choose Account Allocation.
3. Select the payments on account or credit notes you want to use.
4. Select the invoices you want to pay.
5. The Left to Allocate box at the bottom should be 0.00.
6. Click Save.

Part pay invoices and credit notes

This is where you only use part of the value of payment on account or credit note or part-pay an invoice.

1. From Contacts, open the relevant supplier.
2. From the Manage drop-down, choose Account Allocation.
3. Choose  next to the transaction you want to part-pay.
4. Enter the value in the Amount to pay section and select Apply.
   For payments on account, enter this as a negative value.
5. Make sure the Left to Allocate box at the bottom is 0.00.
6. Click Save.

Troubleshooting

Check your allocations

Verify which payments and credit notes you have used to pay an invoice.

1. Open the invoice credit note from the relevant list or from the Activity section for the relevant supplier.
   Select the payment link under the Amount Paid value.
   This opens the Payments and Allocations option.
   
2. From here you can see all the payment links related to the invoice or credit note. Select the link in the Amount column to see the details.

Mismatch error

If you use the VAT Cash Accounting scheme and you try to allocate invoices and credit notes which have different VAT rates, we display the following error

In this scheme, the system places the calculated VAT on invoices into a VAT-holding nominal ledger account until you record the payment. When you match the payment to the invoice, the system moves the VAT amount to the VAT on purchases ledger account, which shows on a VAT Return.

When you credit the invoice instead of receiving a payment, we deduct the value from this ledger account since no VAT is due. If the credit note has a different VAT rate, there may be some remaining value in the holding account.

• Delete a purchase invoice