Hi how would you deal with a deduction at source from your customer who is also your supplier. They have netted a liability against a sales invoice. Less received?

Hi Mdawini_23, thanks for posting on the Community 

When you have a customer who is also a supplier in QuickBooks, you can record contra payments using a journal entry. The journal entry can then be applied as payment against an invoice/bill. To do this:

1. Select + New > Journal entry

2. On the first line, choose the account Debtors (or Accounts receivable), enter the amount in the relevant Credit or Debits field, and select the customer in the Name field

3. On the second line, choose the account Creditors (or Accounts payable), enter the amount in the relevant Credit or Debit field, and select the supplier in the Name field

4. Save and close 

To link the journal entry to an invoice, go to the customer > new transaction > payment and tick the invoice showing under Outstanding transactions against the journal entry under Credits.

To link the journal entry to a bill, go to the supplier > new transaction > cheque and tick the bill against the journal entry as above.