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.

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