Frequently Asked Questions

Why do I have accounts with the same name as a Customer or Supplier?
Last Updated a year ago

Supplier records and Customer records in Bookkeeping are like contact records and do not directly affect the ledger and the chart of accounts. They are used to hold the Customer or Supplier name and contact details. However if a Supplier or Customer has a credit balance then they need to have a credit account to hold this balance and that is recorded in the chart of accounts with an account of the same name as the Customer or Supplier.
If you have a credit balance with a Supplier then that is an asset in your chart of accounts because it is a debt that is owed to you by the Supplier. If you have a credit balance with a Customer then that is a liability in your chart of accounts because it is a debt that you owe to the Customer.
The easiest way to manage these credit accounts is to create a summary account under Assets and move all of these creditor accounts for Suppliers under the summary account. Then do the same thing for the credit accounts that relate to Customers, creating a summary liability account and then moving all of these credit accounts for Customers under the summary account.
By default when you create a new Customer or Supplier record there is no associated credit account created. However if you enter an overpayment of an Invoice or a Purchase then a credit account will automatically be created and the overpayment amount recorded against that credit account.
You cannot delete credit accounts that are associated with a Customer or Supplier record or that have transactions associated with the account. You would need to ensure that there were no transactions associated with the account, then unlink the account from the Customer or Supplier record, and then you could delete the account.

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