How do I transfer vendor balance from one vendor to another?

Before you record the balance transfer, you must create an account for it. To create an account:

• Go to Accountant on the left sidebar and select Chart of Accounts.
• Click + New Account in the top right corner of the page.
• Select Other Current Liability as the Account Type from the Account Type dropdown.
• Enter the Account Name as Vendor Balance Transfer.
• Enter the Account Code and write a short description for the account, if required.
• Click Save.

Next, you have to record payment for the vendor’s bill as you are not liable to pay the vendor. To record payment:

• Go to Purchases on the left sidebar and click Bills.
• Select the vendor’s bill for whom you want to record payment.
• Click Record Payment.
• Enter the necessary details.
• Click the Payment Mode dropdown and select Configure Payment Mode.
• Click + Add New and enter mode as Adjustment Mode.
• Select the account as Vendor Balance Transfer in the Paid Through field .
• Click Save.

To track this payable amount against another vendor, you can raise a Credit Note. Here’s how:

• Go to Purchases on the left sidebar and select Bills.
• From + New dropdown, click Create Credit Note.
• Select the vendor for whom you want to create the credit note and fill in the required details.
• Select the Account as the Vendor Balance Transfer. Provide description if required.
• Click Save.

Now, you can track the bill until it is paid off.