Transferring a Balance or Amount from One Client to Another
The system doesn’t have a direct tool called “transfer balance between clients”, but you can move an amount from one client’s balance to another’s with a Journal Entry between the two clients’ accounts, while the recorded invoices and payments stay as they are. This guide explains the correct method, its effect on each client’s account statement and balance, and the methods we don’t recommend.
Contents
When do you need to transfer a balance?
| Case | Entry |
|---|---|
| Client A has a credit balance (they overpaid or made an advance payment), and you want to move it to be used for Client B’s account | Debit Client A / Credit Client B |
| Client A owes an amount, and Client B will bear it instead | Debit Client B / Credit Client A |
| An amount was recorded on the wrong client by mistake | Depending on the direction of the amount, as in the two cases above |
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Note: The rule: the account whose credit balance you want to reduce (or whose amount owed you want to increase) is debited, and the account whose credit balance you want to increase (or whose amount owed you want to reduce) is credited.
Recommended method: a journal entry between the two clients’ accounts
Example: Client A has a balance of 1,000, and you want to move it to Client B’s balance:
- Open Add Entry from Accounting › Journals Entries.
- Set the date, and write a description, for example: “Balance transfer from Client A to Client B”.
- In the first line, choose Client A‘s account (search by name or code) and enter 1,000 in Debit.
- In the second line, choose Client B‘s account and enter 1,000 in Credit.
- Click Save.
| Account | Debit | Credit |
|---|---|---|
| Client A | 1,000.00 | |
| Client B | 1,000.00 | |
| Total | 1,000.00 | 1,000.00 |
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Note: Don’t transfer more than Client A’s available balance, shown on their page as Client Credit. If their balance becomes negative, some payments that were paid from their credit may be cancelled automatically (see auto-pay invoice using client credit).
Alternative method: an expense and an income
If the transfer actually goes through the treasury (refunding the amount to the first client and receiving it from the second):
- Add an Expense for the amount, and choose Client A‘s account as the account, plus the treasury.
- Add an Income for the same amount, and choose Client B‘s account as the account, with the same treasury.
The effect on the treasury is zero, and both transactions appear in the treasury log. If no money actually moved, the journal entry is more accurate.
Effect on the account statement and both clients’ balances
| Client A | Client B | |
|---|---|---|
| Account statement | The entry appears as a debit transaction (it reduces their credit balance). | The entry appears as a credit transaction (it increases their credit balance). |
| Client Credit | Decreases by the amount. | Increases by the amount, and can be used to pay their invoices. |
| Earlier invoices and payments | Stay as they are. | Stay as they are. If auto-payment is enabled, their unpaid invoices are paid from the new balance automatically. |
| Revenue and tax | Not affected. | Not affected. |
Watch out for
If the Auto Pay Invoices Using Client Credit setting is enabled in Sales Settings:
- The balance moved to Client B is used automatically to pay their unpaid invoices, from oldest to newest.
- If Client A’s balance was already used to pay their invoices (Client Credit payments), and you transfer more than their remaining balance, the most recent of these payments may be deleted automatically so their invoices become unpaid again.
- Cash or bank payments recorded for Client A aren’t affected in any case.
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Tip: To keep all payments unchanged, transfer only Client A’s remaining unused balance, or turn off auto-payment before the transfer if you want to allocate the balance manually.
Methods we don’t recommend
| Method | Why it doesn’t work |
|---|---|
| Creating a sales invoice for Client B for the amount | An invoice is a new sale: it records revenue and tax that aren’t real (and an electronic document under e-invoicing), increases what Client B owes instead of giving them a balance, and changes nothing in Client A’s account. |
| Linking Client B to Client A’s account from Accounts Routing (Specify per Each) | It doesn’t move any amount; it makes both clients share one account. Their balances get mixed in the chart of accounts, each one’s transactions appear in the other’s account statement, and each one’s client credit becomes wrong. |
| Editing the payment and changing the client | Not available; a payment can’t be moved to another client by editing it. Deleting it and re-entering it changes the payments. |
FAQ
Does the system have a balance transfer or client merge tool?
There’s no direct tool for that; use a journal entry between the two clients’ accounts.
Do the recorded payments change after the transfer?
No, all invoices and payments stay as they are, provided you don’t transfer more than Client A’s available balance while is enabled.
Does the transfer appear in both clients’ account statements?
Yes, the entry appears as a transaction in each one’s account statement.
Where do I find the client’s account to choose it in the entry?
Type the client’s name or code in the account field of the entry; each client has a sub-account under the clients account.