Overview

Batchly can combine supplier credit notes with bank payments to settle selected bills from Xero. In this article, cash means the amount paid through your bank. Batchly prepares the banking file; your bank transfers the money.

The outcome depends on the amount you choose to settle in this run and the eligible credit allocated to it. Credits may cover none, some or all of that selected amount.

How Batchly decides what to use

When credit allocation is available on your plan and enabled for your organisation, Batchly checks:

• The bills selected and the amount to settle against each bill
• Authorised supplier credit notes with an unused balance
• Whether each credit matches the bill’s supplier and currency
• How much eligible credit can cover the selected amount, and how much cash remains

Batchly uses the oldest eligible credit notes first and allocates them against the largest selected settlement amounts first. An available credit balance is shared across the supplier’s selected bills; it cannot be used more than once.

Possible payment outcomes

Cash payment only

A cash-only outcome occurs when no new supplier credit is allocated to the selected amount. This can happen when:

• Credit allocation is unavailable on your plan or disabled for your organisation
• No eligible unused credit remains for the supplier
• Available credit notes do not match the bill’s supplier or currency

Credits or payments already applied in Xero are reflected in the bill’s outstanding balance after syncing. Batchly does not deduct those amounts a second time.

The selected amount is included in the banking file. After your bank processes the payment, use Mark as Paid to record it in Xero.

Credit plus cash

When credits cover part of the selected settlement amount, the rest is paid through your bank. For example, if you select a bill with $1,000 outstanding to settle in full:

Credit-only

When credits cover the full selected settlement amount, no cash payment is needed for that bill in this run. If the entire run is credit-only, no banking file is needed.

In this example, the bill is fully settled once the credit allocation succeeds in Xero. Any unused credit remains available in Xero.

How partial payments change the outcome

When partial bill payments are available, the amount you select is the total to settle through credits and cash combined. It is not an additional cash payment on top of the credits.

The first example combines credits and cash. The second is credit-only for this run, but $700 remains outstanding. A bill is fully settled only when its entire outstanding balance has been covered.

When Xero is updated

• Reviewing the allocation or downloading the banking file does not apply credits in Xero.
• Click Apply Credits in Xero at the credit allocation step and check that it succeeds. This reduces the bill balance by the credit allocated.
• For any cash portion, confirm your bank has processed the payment before completing Mark as Paid. This records the cash payment in Xero.
• Any balance not covered by successful credit allocations and recorded payments remains outstanding.

What suppliers see

If you send remittances, the advice identifies the bills included and distinguishes amounts settled by credit from cash paid. This helps explain why the bank payment can be lower than the bills’ outstanding value.

A credit-only settlement does not involve a bank transfer. Sending a remittance does not itself apply credits or transfer money.

Important notes

• Batchly allocates existing eligible credit notes; it does not create new credit notes.
• Credit notes must match the supplier and currency of the bills.
• Check the selected settlement amount, credit allocation and cash total before proceeding.
• If a credit allocation fails, resolve it before paying the reduced cash amount through your bank.