If my customer is also my vendor, how do I offset the money I owe them and the money they owe me?

If you have a customer who is also your vendor, you have to link them. Here’s how:

• Go to Sales on the left sidebar and select Customers or go to Purchases on the left sidebar and select Vendors.
• Select the customer/vendor.
• Click the More icon and select Link to Vendor or Link to Customer.
• Click Link.

The customer and vendor will now be linked.

Now, you need to create an account to record the offset. Here’s how:

• Go to Accountant on the left sidebar and select Chart of Accounts.
• Click + New Account in the top right corner of the page.
• Enter a suitable Account Name. For example, Offset and Adjustment.
• Select Other Current Asset as the Account Type.
• Enter the Account Code and provide a short Description for the account if required.
• Click Save.

You would offset the amount for the contact in the following cases:

• When the money you owe the contact and the money they owe you are the same
• When the money you owe the contact is less than the money they owe you
• When the money you owe the contact is more than the money they owe you

When the money you owe the contact and the money they owe you are the same

Let’s assume you have sold an item worth $6000 to your contact, and you have purchased an item worth $6000 from the same contact. In this case, you will neither receive nor make a payment to the contact. To record these transactions in Zoho Books, you’ll need to create an invoice and a bill, and then record a payment for them. When recording the payment, you have to associate them with the Offset and Adjustment account.

To record payment for the invoices:

• Go to Sales on the left sidebar and select Invoices.
• Choose the invoice for which you want to record payment.
• Click Record Payment at the top of the invoice’s Details page.
• Enter the Amount Received.
• Select the Offset and Adjustment account as the Deposit To account.
• Fill in the other details and click Record Payment.

To record payment for the bills:

• Go to Purchases on the left sidebar and select Bills.
• Choose the bill for which you want to record payment.
• Click Record Payment at the top of the bill’s Details page.
• Enter the Payment Made.
• Select Offset and Adjustment in the Paid Through field.
• Fill in the other details and click Save.

Once the payment is recorded, the invoice and bill will be offset.

When the money you owe the contact is less than the money they owe you

Let’s assume you have sold an item worth $6000 to your contact, and you have purchased an item worth $4000 from the same contact. In this case, the contact has to pay $2000 to you. To record these transactions in Zoho Books, you’ll need to create two invoices (one to offset the difference and another for the payment received) and a bill, and then record a payment for them.

To record payment for the invoices:

• Go to Sales on the left sidebar and select Invoices.
• Choose the invoice for which you want to record payment.
• Click Record Payment at the top of the invoice’s Details page.
• Enter the Amount Received.
• Select the required account in the Deposit To field.

To record payment for the bills:

• Go to Purchases on the left sidebar and select Bills.
• Choose the bill for which you want to record payment.
• Click Record Payment at the top of the bill’s Details page.
• Enter the Payment Made.
• Select Offset and Adjustment in the Paid Through field.

When the money you owe the contact is more than the money they owe you

Let’s assume you have sold an item worth $4000 to your contact, and you have purchased an item worth $6000 from the same contact. In this case, you have to pay $2000 to the contact. To record these transactions in Zoho Books, you’ll need to create two bills (one to offset the difference and another for the payment made) and an invoice, and then record a payment for them.

To record payment for the bills:

• Go to Purchases on the left sidebar and select Bills.
• Choose the bill for which you want to record payment.
• Click Record Payment at the top of the bill’s Details page.
• Enter the Payment Made.
• Select the required account in the Paid Through field.

To record payment for the invoices:

• Go to Sales on the left sidebar and select Invoices.
• Choose the invoice for which you want to record payment.
• Click Record Payment at the top of the invoice’s Details page.
• Enter the Amount Received.
• Select Offset and Adjustment in the Deposit To field.