Transferring account balances between contacts

You may come across a situation where you have a customer who is also a vendor, or two customer accounts which have merged, but the contact records need to be kept separate.

In these cases, you may wish to transfer the balances between the contact records. This article will go through how to handle that.

Transfer bank account

In order to perform the balance transfers, you will need to set up a transfer account. This is most typically a bank account, though it can be any kind of account, as long as it's set up in base currency.

You can create a new account under Accounting > Chart of accounts. Learn more about creating new account codes here.

This account will be used to write the balance on to and out of - the balance on the account after all transactions have been completed should be zero.

Transferring balances between customers

To transfer a balance between customers:

  1. Identify which customer's balance is being moved.
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    In this example, we will move Company B's balance across to Company A.
  2. Enter the account's payment allocation screen and click Pay/unpay next to the balance.
  3. Select your transfer account as the bank account.
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  4. Click 'Submit'. This will move the balance from the customer's account to the transfer bank account.
    If you look at your transfer account, you'll see its balance corresponds to the customer's:
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  5. Next, go to the payment allocation screen of the customer who is receiving the balance.
  6. Click 'Record account payment' on the top right-hand side of the page and select 'Record account payment' from the dropdown:
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  7. Pick the transfer bank account and set the amount of the balance into the 'Amount to pay' box.
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    Important: Make sure to enter a negative number in the amount box if you are transferring a positive balance over, and vice versa! This is because a positive balance refers to an invoice, or money owed, which corresponds to a negative payment on account.
  8. You will now see the balance on the second customer's account.
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Tip: Alternatively, you can enter a quick invoice (or credit) to move the balance over. Make sure it posts to the transfer bank account code, and that the tax code is set to the non-taxable tax code. For example:

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Transferring balances between a customer and a vendor

If you have a customer who is also a vendor, you will likely be offsetting the invoices you send them as a customer as ones they send you as a vendor.

The process is simple:

  1. Enter the customer account's payment allocation screen.
  2. Click Pay/unpay next to the balance.
  3. Select your transfer account as the bank account:
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  4. Enter the vendor's payment allocation screen.
  5. Pay the balance against an invoice using the transfer bank account:
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Video

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