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Making payment for Invoice Owing previously recorded as Accounts Payable

Liabilities are essentially debts – amounts payable (but not yet paid) to other entities for goods or services supplied.

You may have entered a new liability when your supplier billed you for goods or services provided and you chose not to pay immediately. At the time you recorded a journal entry to reflect the amount owing. Refer to Liabilities – add new journal entry for details on how to complete the initial journal entry.

You have now paid the outstanding invoice form your SMSF bank account. We have assumed the outstanding invoice was for $1,000 and was paid from a CSF bank account.

Select More then select Journal Entries from the sub-menu. This will take you to the Journal Entries screen.

Select ADD NEW JOURNAL ENTRY and the Journal Entry screen will appear.

To reflect the payment of the outstanding invoice, you need to DEBIT 2-2000 Accounts Payable and CREDIT the bank. This will reduce Accounts Payable and the Bank balance by $1,000 each.