Paying a supplier with one payment

Summary

You pay a factor once a month and it covers thirty invoices. Recording that against each invoice by hand is a waste of an afternoon. Pay several invoices at once takes the figure that left your bank, works out how it splits across the supplier’s documents, shows you the proposal, and records it when you are happy.

The split is a proposal you confirm, not a decision Torqueflow makes for you. Nothing is recorded until you press the button.

Money that could not be attached to a document you hold is left over. It is not lost. When the missing invoice turns up you settle it from that money, and if it never turns up you write the money off with a reason. Left-over money is aged on the supplier’s page so it does not quietly pile up.

Prerequisites

• Outstanding purchase invoices for the supplier.
• Permission to manage bulk payments. Owner and Manager have it by default. Service advisors do not.
• No accounting integration connected. While Xero is connected, bulk payments are recorded in your accounting package instead.
• For statement mode, a captured statement. See Checking a supplier statement.

Steps

Choose how to build it

1. Against a statement. The statement decides which documents the payment covers. Use this when you are paying what the factor asked for.
2. Pick invoices yourself. Choose from everything still outstanding for that supplier.

Credit notes are only applied in statement mode. In manual mode nothing tells Torqueflow which credits the supplier netted off, so it does not guess. If credits are in play, start from a statement.

Build the split

1. Enter the amount paid, the figure that actually left your bank.
2. Set the payment date, method and reference.
3. Select Work out the split.
4. The Proposed split appears, showing how much of the payment landed on each document and what each one becomes.

Change the supplier, statement, amount or date afterwards and it warns you to recalculate before confirming.

Read what happens to each document

The What happens column says it plainly.

1. Paid in full.
2. Part-paid.
3. Held, not paid. Money set aside against a document you do not hold yet.
4. Nothing left. The payment ran out before it got here. A marker shows where.
5. Not included.
6. Nothing due.
7. Amount could not be read.

Documents outstanding but not listed on the statement are shown as such, so you can see what you are not paying.

When the payment lands exactly on a document

If you pay less than the statement total and the money happens to run out exactly at the end of a document, the proposal says so in a sentence: “Your £13,123.00 covers the 41 oldest documents exactly, with nothing left over.” That is a useful check that your figure matches a run of invoices on the statement.

Credit notes are not counted in that number, because a credit reduces what the payment covers rather than being covered by it. Where credits were applied, the sentence says so.

When you pay the full statement total, the sentence does not appear. Paying the whole total always lands exactly at the end, so it would prove nothing. Silence here is not a warning.

When the payment runs out part-way through a document

If the money runs out in the middle of a document, a panel reads “This payment runs out part-way through” that document, with how much would still be owing on it. Everything after it on the statement receives nothing.

You have to answer before you can record the payment.

1. Yes, I part-paid this deliberately. The document is recorded as part-paid and you can carry on.
2. No, let me re-check my figure. Takes you back to the amount so you can correct it.

Until you choose, the confirm button stays blocked with “Confirm you meant to part-pay a document”. A figure keyed one digit wrong usually shows up here.

Documents the supplier still lists after you paid them

A statement is a running account, so it often lists invoices you have already settled on an earlier payment. Torqueflow does not pay them twice, and how it reports them depends on whether the statement prints the date the supplier last received a payment. Most do not.

1. No last payment date printed. The proposal says so once: this statement does not say when the supplier last received a payment, so a document they have not applied your payment to cannot be told apart from one they simply had not seen yet. The documents you already settled are listed, and nothing is flagged.
2. Settled after that date. The supplier had not seen your payment when they printed the statement. They are skipped quietly, with a one-line explanation.
3. Settled on or before that date. A panel reads The supplier is still listing documents you have already paid. Either the supplier has not applied your payment yet, or the earlier split was wrong. Each document shows the date you settled it.

Treat that panel as something to check, not as proof. Torqueflow does not send remittance advice, so the supplier applies your money by their own rule and may have allocated it differently. Ring them before assuming either side is wrong.

If a credit on the statement has already been used by another payment, a separate panel says A credit on this statement has already been used, and it is not applied again.

Statements that open with a brought-forward balance

A brought-forward balance stands for older documents the statement does not list, so Torqueflow cannot tell which of them your payment covers. No split can be worked out from that statement.

1. Select Pick the invoices yourself instead. Your amount and date are carried across into manual mode.
2. Tick the invoices the payment covers and work out the split as normal.

If the statement also lists credit notes, that route is not offered. Manual mode cannot apply credits, so you would end up short by their value with nothing on screen explaining why. Ask the supplier for a statement that lists the older documents, or settle those invoices individually.

Understand the money left over

Left over is money that is not settling an invoice you hold. It is held, not lost, and the reason matters.

1. Held against documents you have not entered yet. The statement bills them, you do not have them. Ask the supplier.
2. Held against documents already in your scan inbox. You have them, you just have not entered them. Nothing to chase, do your filing.
3. Held against documents you voided yourself. The supplier still lists them as owed. To release it, cancel, untick those rows and recalculate.
4. Not held against any document on the statement. You paid more than the statement accounts for.

The confirm step spells out which of these it is, in those words, before you commit.

Credit notes you have not entered yet

A statement often nets off a credit note you have not captured. Torqueflow handles it: the payment covers the net, and the credit appears as its own line marked Credit note, not entered yet.

This is not money going missing. It reduces what the payment has to cover, and no money leaves the bank for it. When the credit note arrives later, enter it as normal.

A credit can only reduce one payment. Next month’s statement usually lists the same credit again. Torqueflow recognises it as the credit an earlier payment already used and shows it as already used rather than taking it off a second time. That still holds when you corrected a misread credit reference on one statement and the other statement carries the original reading, and when you have since entered the credit note itself.

It relies on the reference. If the reader misreads the same credit differently on two statements and nobody corrects either, check the credit lines by eye before you confirm.

Settle left-over money when the document arrives

When you enter an invoice that a bulk payment was holding money for, the invoice page shows a panel: A bulk payment is holding money for this document. It says how much was set aside and when.

1. Open the purchase invoice (by scan or by hand, once it is entered).
2. Select Settle it from that money.
3. The confirm step reads “Settle … from money already paid?”. The money leaves the bulk payment and settles this document. No new payment is recorded and no more money leaves your bank.
4. Select Settle it.

You can also start from the bulk payment itself. Open it from Bulk payments and use Settle it from that money on the left-over line. Lines already settled this way show Settled with the date.

When the invoice and the statement disagree

The statement said £120, the invoice says £118. Torqueflow never quietly picks one.

1. The panel shows both figures, marked The statement said and This document says.
2. The lesser of the two moves across. In this example £118 settles the invoice and £2 stays left over on the bulk payment.
3. Tick I have checked both figures before you can settle it.

From the bulk payment page, a disagreement is refused with “The statement and the document give different figures for this purchase”. Settle it from the invoice page instead, where both figures are on screen.

When it cannot be settled this way

• The bulk payment also claims a credit you have not entered. Torqueflow cannot tell how much was really held back for this one document. Enter the credit note, then reverse the bulk payment and record it again. Entering the note on its own does not release the money.
• The document has already been settled another way. There is nothing left for the money to pay. It stays held on the bulk payment. Write it off if it is never going to be used.
• An accounting integration is connected. The change would never reach your accounting package. Settle the document there instead.
• The money has been written off. Record a payment against the document in the ordinary way.

If you do not have permission to manage bulk payments, the invoice page says a bulk payment is already holding money for this document and that recording a payment would pay it twice. Ask someone who does have access to settle it from that payment.

Write off money that will never attach

Some left-over money is never going to reach a document, for example because the supplier never issued the invoice. Writing it off stops it looking like an oversight.

1. Open the bulk payment.
2. Under Left over, select Write this off.
3. The confirm step reads “Write off £X?” and warns that it records this money will never attach to a document. It cannot be undone. The only way back is to reverse the whole payment, and where the payment cannot be reversed the warning says there is no way back at all.
4. Enter a reason under Why is this being written off?. A reason is required.
5. Select Write it off.

What changes:

• The bulk payment shows a Written off section with the amount, the date, who did it and the reason. The bulk payments list shows a Written off badge.
• Any documents the money was being held for can be paid in the ordinary way again.
• The left-over figure stays on the payment as a record of what happened. It is no longer counted as waiting.

You cannot write off left-over money on a payment that also claims a credit you have not entered yet. Enter the credit note, then reverse and record the payment again.

Keep an eye on left-over money

A supplier with left-over money that keeps growing usually means missing paperwork, a mis-keyed payment or a duplicate.

1. Open the supplier’s page. The panel Money paid that has not reached a document shows left-over money on bulk payments to that supplier, grouped by age: 0-30, 31-60, 61-90 and 91+ days. Only people who can manage bulk payments see it.
2. It keeps three figures apart: You paid, not yet attached, The supplier owes you and Attached to no document. They are never netted together, because a credit and an unpaid invoice of the same value would cancel to zero and hide two problems.
3. On the Bulk payments list, the Held for column shows how many days each payment’s left-over money has been waiting.

Settled and written-off money drops out of both. When nothing is left over for a supplier, the panel does not appear on their page.

Reverse a payment

1. Open the payment and select Reverse this payment.
2. It is reversed as a whole. Individual documents cannot be picked out.
3. Balances are restored on every invoice it settled.

If you need a slightly different split, reverse it and record it again with the right rows ticked.

Expected Outcome

• One payment recorded across many documents, matching what left your bank.
• Every penny accounted for: against a document, explained as held, settled later from the held money, or written off with a reason.
• Balances that agree with the supplier’s, and a supplier page that shows at a glance whether money is waiting to attach.

Notes

• A payment dated in a past VAT quarter changes that quarter’s figures on cash accounting. On cash basis the VAT follows the payment date, so back-dating one moves a reclaim between quarters. If the quarter is already filed, talk to your accountant before you do it.
• A payment that is part of a batch cannot be reversed on its own from the invoice. Reverse the batch.
• Once part of a payment has synced to your accounting package it cannot be reversed here. Correct it in the accounting package instead.
• A document can only be held by one payment at a time. If another payment is already holding money against it, settle it from that payment or reverse that one first.
• Settling from held money moves no cash. It attaches money that already left your bank to the document. No second payment is recorded.

Troubleshooting

Problem: There is money left over and I do not know why. Cause: The payment covered more than the invoices you hold. Fix: Open the Left over panel. It names which of the four reasons applies and what to do about it.

Problem: The confirm button says “Confirm you meant to part-pay a document”. Cause: The payment runs out part-way through a document. Fix: Select Yes, I part-paid this deliberately if that is right, or No, let me re-check my figure to correct the amount.

Problem: “The supplier is still listing documents you have already paid.” Cause: The statement says the supplier last received a payment on or after the date you settled those documents, but still lists them. Fix: Ring the supplier. They may not have applied your payment yet, or they applied it to different invoices. The documents are not paid twice either way.

Problem: “This statement opens with a brought-forward balance.” Cause: Torqueflow cannot tell which older documents the balance stands for. Fix: Select Pick the invoices yourself instead. If the statement lists credits, ask the supplier for a statement that lists the older documents.

Problem: “This statement does not add up to its own stated total.” Cause: The lines and the stated total disagree, so a payment built from it would rest on a misread figure. Fix: Open the statement and correct the misread lines with Change what this line is, Edit the document number or Correct the amount. Correcting it on the statement keeps the record of what you have already chased. If the difference is exactly twice one line’s amount, that line’s minus sign was probably lost. Once it adds up, paying and chasing both switch back on. See Correct a misread line.

Problem: A line is excluded because “the amount on this line runs the opposite way to what it is labelled”. Cause: An invoice line shows as money back, or a credit note as money owed, and Torqueflow will not guess which is wrong. Fix: Select Correct it on the statement. The link opens the row, where you correct the amount or the line type. Then recalculate the payment.

Problem: “An amount on this statement could not be read, so this payment cannot be split.” Cause: The reader could not make out a figure on one line. Fix: Enter the amount on the statement line with Correct the amount, or exclude the line, before recording the payment.

Problem: “The amount or type of one of the statement lines in this payment was corrected while it was being recorded.” Cause: Someone corrected a line on the statement while you were building the payment. Nothing was saved. Fix: Recalculate the payment and record it again.

Problem: A payment shows “The statement now says … corrected after this payment”. Cause: A statement line this payment used was corrected after the payment was recorded. The payment itself did not change. Fix: If the payment was wrong, reverse it and record it again.

Problem: “The credits on this statement come to more than it bills.” Cause: Nothing is due and the supplier owes you the difference. Fix: There is no payment to record. Take it up with the supplier.

Problem: The statement lists more documents than a single payment can take. Cause: There is a cap on how many documents one payment can cover. Fix: Split it into more than one payment.

Problem: A credit note is excluded and says it has not been confirmed. Cause: It is still sitting unconfirmed in your inbox, so it cannot pay anything. Fix: Confirm it, then recalculate the payment.

Problem: “Another payment has already used the credit on this statement line.” Cause: Two payments are trying to claim the same credit. Fix: Reverse the other payment if this one should have it.

Problem: Two credit notes are both shown at zero, with a message that they share a reference once punctuation is ignored. Cause: Another payment has already claimed a credit under that reference, and Torqueflow will not guess which of your two credit notes it was. Fix: Untick either one and recalculate. The one you untick stays unused and can go on a later payment.

Problem: “Settle it from that money” is not offered on the invoice. Cause: The bulk payment also claims a credit you have not entered, the invoice is already settled, an accounting integration is connected, or the money was written off. Fix: The panel names which. For an unentered credit, enter the credit note, then reverse and record the bulk payment again.

Problem: I wrote off left-over money by mistake. Cause: A write-off cannot be undone on its own. Fix: Reverse the whole bulk payment and record it again.

Problem: “Bulk supplier payments cannot be recorded while an accounting integration is connected.” Cause: Payments recorded here would not reach your accounting package and the two ledgers would drift apart. Fix: Record the payment in your accounting package, or disconnect the integration first under Settings > Integrations > Xero.