How to settle a customer or vendor opening balance in Accounting?

Customers opening balances

If the opening balance is an invoice:

1. Click on the Banking tab
2. Hover the mouse on New, and select Sale/receipt from the drop-down list
3. Under the Customer receipt tab, select your Customer, and fill in all the relevant fields: Paid into Bank Account, Method of payment, Date received, Reference (optional), Amount received
4. Select the check box for the invoices opening balance that the customer has paid.

TIP: If you enter a value in the Amount Received field, as you select invoices, the value that is left to allocate is reduced. If there’s an amount leftover because the customer has overpaid, a payment on account is created for the remaining amount. 

TIP:  To partially pay an invoice, click the Paid column for the applicable invoice. In the Part Pay window, enter the payment amount in the Amount to Pay field, and then click Apply.
If you have an amount left to allocate, you’re asked to save this as a payment on account. To do this, click Yes. Alternatively, to return to the Receipt page and allocate this amount to another invoice, click No.

If the opening balance is a credit note:

1. Click on the Banking tab
2. Hover the mouse on New, and select Expense/Payment from the drop-down list
3. Under the Customer refund tab, select your Customer, and fill in all the relevant fields: Paid into Bank Account, Method of payment, Date received, Reference (optional), Amount refunded
4. Select the check box for the credit notes opening balance that you need to refund to your customer. 
    
   NOTE: You can only fully refund your customer, so the amount in the Left to allocate field has to be 0 to enable you to save your refund.  

Another option to settle your credit note opening balance is to allocate it to an outstanding invoice. You can easily do this by following the steps indicated in Allocate credit notes and payments on account in Accounting 

Vendor opening balances
 

If the opening balance is an invoice:
 

1. Click on the Banking tab
2. Hover the mouse on New, and select Vendor/payment from the drop-down list
3. Under the Vendor payment tab, select your Vendor, and fill in all the relevant fields: Paid into Bank Account, Method of payment, Date received, Reference (optional), Amount paid
4. Select the check box for the invoices opening balance that you have to pay to your Vendors

TIP:  If you entered a value in the Amount paid field, as you select invoices, the value that is left to allocate is reduced. If there’s an amount leftover because you overpaid your Vendor, a payment on account is created for the remaining amount.

TIP: To partially pay an invoice, click the Paid column for the applicable invoice. In the Part Pay window, enter the payment amount in the Amount to Pay field, and then click Apply.
If you have an amount left to allocate, you’re asked to save this as a payment on account. To do this, click Yes. Alternatively, to return to the Payment page and allocate this amount to another invoice, click No. 

If the opening balance is a credit note:
 

1. Hover the mouse on New, and select Sale/Receipt from the drop-down list
2. Under the Vendor Refund tab, select your Vendor, and fill in all the relevant fields: Paid into Bank Account, Method of payment, Date received, Reference (optional), Amount refunded
3. Select the check box for the credit notes opening balance that your Vendor is refunding to you.
    

NOTE: You can only fully record the refund received from your vendor, so the amount in the Left to allocate field has to be 0 to enable you to save your refund. 

Another option to settle your credit note opening balance is to allocate it to an outstanding invoice. You can easily do this by following the steps indicated in Allocate credit notes and payments on account in Accounting