ERPNext Conference 2019* Blog

How to account for returned payment to a supplier?



I have a Purchase Invoice from which I have created a Payment Entry.
Now the supplier had change its bank account of, so the funds where returned from the overseas bank (because the bank account the payment was sent to does not exist any longer).

How can I account for this correctly in ERPNext?

I need to ‘reopen’ invoice (which is marked as paid) and also return the funds back on to our outgoing bank account (of course not all of it because both involved banks took a bite from the money).

I was looking at journal entry but can not link that neither to a payment entry, nor to a ‘paid’ Purchase Invoice.

Can anybody kindly advise how to handle such a scenario?


Did you try the Create/Return function? That may handle everything. Just to make sure the return accounts are correct.

If you happen to have the Purchase Invoice created from a Purchase Order then the Order will stand as a different status where you can continue as regular.

Should be straightforward for you if I’m not mistaken about your experience.


If there was a “return” on the payment Entry I’d do that. But the Purchase Invoice itself is not affected by this whatsoever. It needs to remain and to be set back to ‘unpaid’. So from that perspective making a ‘return’ the Invoice is besides what really happens.


Then, this is a pure accounting issue. If you can issue a payment/journal entry as receive from the supplier and another payment entry, it would just be fine. Moreover, you have to do this so thst your accounts reflect all the movements in your bank account.
I’d rather do the returned payment with a journal entry and link that journal entry to the Payment Entry in which you issued the initial payment. If I may know about your Chart of Accounts and settings, I may assist further.


I though about something along those lines. Unfortunately you can not choose a payment entry as reference in a line of a journal entry. What can be chosen is a purchase invoice, but only if it is not paid yet, so this neither is a workable option.

What I practically tried is

line     dr/cr      account             party          amount
line 1   credit     payable account     my supplier    1000
line 2   debit      bank account        -              1000

this creates a new liability against the mentioned supplier but does not make the PINV unpaid (which it practically is).