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.

Prerequisites

• Outstanding purchase invoices for the supplier.
• Permission to record purchase payments.
• 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.

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.

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, either against a document or explained as held.
• Balances that agree with the supplier’s.

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, that one has to be reversed first.

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: “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 be built on a mis-read figure. Fix: Correct the lines on the statement first. Torqueflow will not guess which figure is wrong.

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.