Old Invoice

Question

My boss just pulled out a purchase invoice from 6 years ago that he owes a large sum of money on. He wants to put the unpaid invoices from this company towards what he owes them. 
 My question is, since this invoice has never been entered into Simply before how would I go about entering it? What about the unclaimed GST? 
 Would I be better off starting a separate liability account to apply payments to or entering as a normal purchase invoice? If I enter as a purchase invoice when should I date it for? 
 
 Any help is appreciated. 
 Thanks!

phughes · Accepted Answer

I agree that the invoice needs to be posted in the current fiscal year and ITCs should not be claimed on such an old invoice. You can enter the invoice to the first day of the current fiscal year and make relevant notes in the description field about the circumstances. If this vendor is also a customer of yours and the boss wants to apply his outstanding payable invoice against the client's AR, you can post offsetting payments to both the vendor and customer accounts using a clearing account or as an in and out from your bank account. As long as the amounts and dates are the same the net effect on your payment account will be zero but both the sales and payable invoice balances will decrease.

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