Settle bills bill-wise

On a bill-wise ledger (a vendor's, a contractor's or a broker's account, for example) every amount owed is tracked as its own bill. When you pay or receive money on such a ledger, you say which bill the money settles, so each bill's outstanding amount and ageing stay right. Do this whenever you enter a payment or receipt by hand against a party that has open bills.

Before you start

• The party's ledger is marked Bill-wise on the Ledgers tab of the chart of accounts (see Add a ledger). On a plain ledger there are no bills to settle.
• The bill exists: a bill is opened when a voucher posts a New Ref on the ledger, for example a contractor's bill entered on a Purchase voucher (see Record a manual voucher). Issued demands, approved commissions and accrued tenant benefits open their bills by themselves.
• Buyers' receipts recorded under Payments settle their demands' bills automatically when they clear; you don't settle those here (see Record a receipt).
• The books are active and the voucher date falls in an open fiscal year. To post, its period must not be locked.
• Permissions, in the role editor's words:
  • the View permission on Vouchers, on Books and on Chart of Accounts (to pick ledgers);
  • the Create permission on Vouchers to enter the voucher (the default Administrator, Finance Lead and Accountant roles);
  • the Post permission on Vouchers to post it (the Administrator and Finance Lead);
  • the View permission on Reports for the Ageing report.

Steps

1. In the sidebar open Accounting > Vouchers, pick the books in the Books switcher at the top right and choose the Outstanding bills tab. Set the side filter to Payable (Cr) for a vendor's bill, or Receivable (Dr) for money owed to you, and pick the party's ledger in the ledger filter ("Any bill-wise ledger"). You see the party's open bills, earliest due first, with their Original, Settled and Outstanding amounts and an Ageing badge. Note the bill number and what is outstanding. See Outstanding bills.
2. Choose the Vouchers tab, open New voucher and choose Payment (Payment) to pay a vendor, or Receipt (Receipt) to receive from a party. The page "New Payment" (or "New Receipt") opens with the voucher details and two lines, Dr then Cr. See New voucher.
3. Check the Date ("Must fall in an open fiscal year and an unlocked period.") and fill Reference no. with the cheque or UTR number, Reference date and Narration.
4. On the party's line, pick the party's ledger and type the Amount. On a Payment that is the first line (Dr, "Party or expense ledger"); on a Receipt it is the second line (Cr, "Party or income ledger"). The line shows a Bill-wise badge and "0 allocations: 0.00 of <amount> (<amount> left)".
5. Click Edit allocations under the line. The allocations panel opens: "New Ref opens a bill, Against Ref settles one, Advance and On Account carry no bill. Allocations must add up to the line."
6. Click + Against Ref. An allocation row appears with Type "Against Ref", the Amount already filled with what is still unallocated, and a Bill box.
7. In Bill ("Open bills of this ledger"), choose the bill you noted. Each bill in the list reads "<outstanding> outstanding · dated <date>, due <date>". Set the Amount to what you are settling on this bill; it can't be more than the bill's outstanding. Once the allocations cover the line, the summary turns green, for example "1 allocation: 3,00,000.00 of 3,00,000.00 allocated".
8. If the line pays more than one bill, or more than is outstanding, allocate the rest: + Against Ref again for another bill, + Advance ("Money received or paid before any bill exists.") or + On Account ("Left unallocated; settle against bills later."). While something is left the panel shows "<amount> still to allocate"; Put the rest on the last allocation adds it to the last row.
9. On the other line, pick the bank or cash ledger ("Bank or cash ledger (money out)" on a Payment, "Bank or cash ledger (money in)" on a Receipt) and type the same amount. Under the lines you see "Debit <amount>", "Credit <amount>" and a green Balanced badge.
10. Click Save and post. You see "Voucher <no> posted." and the posted voucher opens; under the party's line each allocation names its bill. If you can't post, click Save as draft instead ("Draft created.") and ask someone with the Post permission to post it (see Post a draft voucher).
11. Open the Outstanding bills tab again, set the settled filter to Open and settled and pick the ledger again. A bill paid in full shows Settled in the Ageing column; a part-paid bill shows the new Settled and Outstanding amounts.
12. In the sidebar open Accounting > Reports and choose the Ageing tab, with Payables (or Receivables) selected. The party's row shows what is still open, split into Not due, 1–30 days, 31–60 days, 61–90 days and Over 90 days, with the number of open Bills. See Ageing.

What happens next

• Posting gives the voucher its number, puts it in the ledger report, trial balance and day book, and reduces each chosen bill's outstanding by its Against Ref amount. A bill whose outstanding reaches zero becomes Settled.
• Advance and On Account amounts are recorded on the party's ledger but aren't tied to any bill. They don't reduce any bill's outstanding, and they don't show on the Ageing report, so a party with an unallocated advance can still look as though it owes its full bills.
• A posted voucher can't be edited. To undo a settlement, reverse the voucher: the bills it settled open again. See Reverse a posted voucher or discard a draft.
• Voucher posting sends no notification; the party isn't told.

If something goes wrong

• The bill isn't in the Bill list: the list shows only unsettled bills of the line's ledger on the opposite side (a payable bill is settled from a Dr line, a receivable bill from a Cr line). Check the line's side and ledger, and that the bill's voucher was posted.
• "Pick the bill to settle", "Bill allocations must add up to the line amount (<x> of <y> allocated)", "Bill <no> has <x> outstanding, allocation is <y>" or "Debits and credits must be equal to post": finish the allocations or balance the lines. See Voucher cannot be posted (trouble.accounting.cannot-post-voucher).
• "Draft saved, but posting failed: <reason>": the draft is kept; fix the reason and post it from the voucher page. Same article (trouble.accounting.cannot-post-voucher).
• "Period <n> of <FY> is locked", "That fiscal year is closed." or "No fiscal year covers that date. Open the next fiscal year under Books first.": date the voucher in an open period, or ask for the period to be unlocked. See No open period for the date (trouble.accounting.fiscal-year-missing).
• "These books are inactive. Reactivate them under Books to post entries.": see Books inactive (trouble.accounting.books-inactive).
• "No bills match" or "No open bills.": clear the filters, or the party has nothing open. Arriving from the Ageing report's bill count, the tab shows every open bill: pick the ledger again. See Report shows nothing (trouble.accounting.ledger-report-date-range).
• No New voucher menu or no Save and post button: your role lacks the Create or Post permission on Vouchers. See No access (trouble.admin.no-access).

Related

• Outstanding bills
• New voucher
• Voucher
• Ageing
• Ledgers
• Record a manual voucher
• Post a draft voucher
• Record a receipt