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Matching part payments against multiple invoices

Some times you receive a payment that is for multiple invoices and you need to be able to match these in your bank feeds. The problem is that it is one amount in your bank account but many small payment amounts applied in Saasu. To solve this we use the clearing account technique.

In this example you have 2 x $500 payments received on different days that need to be allocated across 5 separate invoices.

  1. Create a Bank Account called Asset: General Clearing
  2. You will be applying each payment received to your invoice using that account. e.g. From the Add > Sales Payments screen apply a $100 payment to each of the five invoice. Make sure you date these payments the same date the $500 landed in your bank account.
  3. Create a Journal Entry with DEBIT Asset: Your Bank and CREDIT Asset: General Clearing for the date payment was received.
  4. Repeat step 2. above for the 2nd $500 payment.
  5. Create a Journal Entry with DEBIT Asset: Your Bank and CREDIT Asset: General Clearing for the date payment was received.

Now when you got to match in Bank Feeds you will have the two journal entries to match against cleanly.

The idea is the Journal entries that are against the Asset: General clearing account are offsetting the Sales Payments entered against that same account. i.e. The clearing account technique keeps a $0 balance over time.