Recording Payments (Money Out)

A Payment is the voucher you record when you pay a vendor — bank transfer, cheque, UPI, cash. This guide covers when to use a Payment vs the Paid now via shortcut on a purchase, and how to track what you still owe.

Time to read: ~10 minutes. You’ll need: at least one vendor with an outstanding bill, and at least one Cash or Bank account in your Chart of Accounts.

What you get when this is done

• A clean record of every payment to each vendor.
• Up-to-date payables — the Dashboard’s Payables tile and Payables Ageing report reflect every payment instantly.
• The right account debited and credited — your bank goes down, the vendor’s outstanding goes down.
• A printable payment advice you can send the vendor as confirmation of remittance.

Where to find the screen

From the sidebar: Daily → Transactions → Payment tab.

When to use a Payment vs “Paid now via” on a purchase

Same two-path choice as receipts, but on the vendor side:

For most B2B flows where vendors give you credit terms (Net-30, Net-15), the Purchase → Payment two-step flow is the default.

The basic flow

1. Daily → Transactions → Payment tab.
2. Vendor — pick the vendor you’re paying. (For payments to non-vendors — owner withdrawals, statutory dues, salary — use a Journal voucher or the payroll module.)
3. Through (Cash / Bank) — pick the account the money’s leaving. Booksmor lists every Cash and Bank account from your Chart of Accounts.
4. Amount ₹ — what you’re paying.
5. Description / narration — optional. “April bill payment”, “Advance for May supply”, etc.
6. Click Post.

A green banner: ✓ Posted — serial PAY/2026/00001. Behind the scenes:

• The Cash / Bank account you chose is credited (your bank goes down).
• The vendor’s Accounts Payable balance is debited (you owe them less).

How payments settle bills

Same running-balance model as receipts (see Receipts KB doc). Booksmor uses the vendor’s Accounts Payable ledger as a running balance — you don’t assign each payment to a specific bill.

To see which bills and payments have netted off, run the Vendor Ledger report (Sidebar → Reports → Ledger, pick the vendor’s AP sub-account). You’ll see every bill and every payment in date order with a running balance.

Advance payments (you pay before invoice)

Many vendors ask for advance payment — partial or full — before they supply. Record the payment first:

1. Payment tab → pick the vendor → pick the Cash / Bank account → enter the amount.
2. Description: “Advance for PO #ABC” or similar.
3. Post.

The vendor’s AP now shows a debit (they owe you — until they invoice you for what you advanced). When the vendor’s bill arrives later, you post a Purchase for the full bill amount; the advance and the bill net off on the vendor’s ledger.

GST on advances paid: advances paid to a vendor don’t trigger your input credit. Credit comes when the vendor issues the actual tax invoice. The advance sits in your books as a debit on the vendor’s AP until then.

Statutory payments — TDS, GST, PF, ESI, PT

Payments to the government (TDS, GST liability, PF, ESI, professional tax) are not vendor payments. Use these dedicated flows:

These get their own purpose-built screens because they generate specific government-format outputs (challans, ECR file, 24Q CSV, etc.) — not just a payment voucher.

Salary payments

Don’t record salaries via the Payment voucher. Use the Payroll module:

• Sidebar → Payroll → Pay Runs to compute the month’s payroll.
• Sidebar → Payroll → Pay Runs → [Run] → Pay-out to disburse — Booksmor posts the bank-side voucher (Dr Salary Payable / Cr Bank) when you mark the run as paid.

A manual Payment voucher to a single employee for ad-hoc reimbursement is fine, but use Payroll → Reimbursements for proper expense-claim tracking with approval workflow.

After posting — voucher view, share, edit

Same flow as other vouchers — single-click expands lines, double-click opens the full Voucher view with Print, PDF, Share, Edit, Delete.

The PDF generated by Print / PDF is a payment advice you can send the vendor as confirmation of the remittance — it carries your company info, the vendor name, amount, and date.

Under GST, Edit and Delete require a Reason, just like sales and purchases.

Tracking vendor balances

Three places give you the answer to “How much do I owe each vendor?”:

The Purchase by Vendor report (Reports → Purchase) shows total billed per vendor — useful for vendor spend analysis, separate from what’s outstanding.

Common questions

My vendor charged me through UPI. Which account should I pick under “Through”? Whichever account the UPI debited from. Most SMBs route outgoing UPI from their main current account, so pick that. If you maintain a separate UPI / wallet account in your COA, use that instead and sweep it from the main bank via a Journal voucher when you reconcile.

Can I record a payment in a different currency? The payment uses your tenant’s Base currency (set in Settings). Multi-currency vouchers aren’t supported in the current release. For payments abroad, record in INR and handle the FX delta separately.

I paid the vendor by cheque that hasn’t cleared yet — what do I do? Two approaches:

• Pessimistic (recommended): record the payment only when the cheque clears. The bill stays open until then.
• Optimistic: create a “Cheques issued — not yet cleared” liability account in your COA, post the payment there immediately, then move it to the bank via Journal when it clears.

Can two payments share the same number? No. The voucher series (PAY/2026/00001, PAY/2026/00002, …) is strictly sequential.

I overpaid a vendor by mistake. How do I recover? Two options:

• Get a refund: when the vendor sends the money back, record it as a Receipt with the vendor selected (yes, Receipt accepts vendor parties for refund cases).
• Adjust against future bills: leave the over-payment as a credit on the vendor’s AP. When the next bill comes, post the Purchase as normal — the over-payment automatically nets against it on the vendor’s ledger.

Why doesn’t Booksmor ask which bill the payment is for? Same as receipts — Booksmor uses a running-balance model rather than bill-by-bill allocation. The Vendor Ledger report shows you the netted view.

Can I print a remittance advice to send the vendor? Yes. After posting, double-click the payment in Recent vouchers to open the Voucher view, then click PDF. The output is a clean remittance advice with your company info, the vendor name, amount, date, and the payment reference.

The Vendor dropdown is empty. You haven’t added any vendors yet. Either click + New beside the dropdown to add one inline, or go to Masters → Vendors to bulk-add.

Troubleshooting

Payment posted but vendor balance didn’t change. Refresh the vendor view — Booksmor caches the dashboard summary for a moment. If the balance still doesn’t move, check that you picked the right vendor in the Payment form (the dropdown is sorted by name).

Post button is disabled. Most common: no vendor picked, no Cash/Bank account picked, or Amount is blank/zero. Payments require all three.

The Bank account I want isn’t in the dropdown. The dropdown lists accounts of category Cash & Bank (or those marked with role cash / bank in the Chart of Accounts). If your bank account is filed under a different category, edit the account in Masters → Chart of Accounts and change its Category to Cash & Bank.

“Allow negative bank balance” warning appears when I try to post. Your bank account’s balance would go negative after this payment. Either deposit first (record a Receipt or Journal) and then pay, OR enable Settings → Allow negative bank balance (only do this if you actually have an overdraft facility).

Need more help? Email support@booksmor.com with: the vendor name, the payment number (if posted), and a screenshot of what’s going wrong.