Why Cash May Remain After Credits

Why Cash May Remain After Credits

Overview

A bill may still have a remaining cash payment after Batchly applies supplier credit notes.

This usually happens when the available credit notes only cover part of the bill amount. Batchly applies the available supplier credits first, then calculates the remaining amount that still needs to be paid by cash.

This article explains why a cash payment may still be required after credits are applied, what appears in the banking file, and what happens in Xero.

Why there may still be a cash payment

Supplier credit notes reduce the amount that needs to be paid, but they only cover the value available in Xero.

A remaining cash payment may still be required when:

  • The available credit notes are less than the bill amount
  • Only some of the supplier’s credit notes are authorised or available in Xero
  • The credit notes belong to a different supplier
  • Some credit notes have already been partly or fully used
  • The selected bills are greater than the available supplier credit balance
Batchly can only apply supplier credits that are available in Xero and belong to the same supplier as the selected bill.

Simple example

If a supplier has a $1,000 bill and $300 in available credit notes, Batchly can apply the $300 credit and leave $700 as the remaining cash payment.

Bill AmountCredit AppliedRemaining Cash Payment
$1,000$300$700

In this example, the bill is not fully settled by credit note because the available credit is lower than the bill amount. The remaining $700 still needs to be paid by cash.

How Batchly calculates the remaining amount

Batchly calculates the remaining cash amount by comparing the selected bill amount with the available supplier credits.

StepWhat Batchly ChecksResult
1Selected bill amountThe amount due on the bill or selected payment amount
2Available supplier credit notesThe credit value available to apply in Xero
3Credit allocationCredits are applied against the selected bill where possible
4Remaining balanceAny amount not covered by credit becomes the cash payment amount

What appears in the banking file?

Only the remaining cash payment amount appears in the banking file.

The credit note portion is allocated in Xero and is not sent to the bank because it is not a bank payment.

Banking file example

Bill AmountCredit AppliedBanking File Amount
$1,000$300$700
If the credit notes fully cover the bill, the banking file amount for that bill is $0.

What happens in Xero?

Batchly writes the credit note allocation back to Xero. This reduces the bill balance by the amount of credit applied.

If there is a remaining cash payment:

  • The credit note allocation reduces the bill balance in Xero
  • The remaining cash amount can be paid through the banking file
  • After the cash payment is marked as paid, the bill balance is reduced again by the payment amount

If the credit note and cash payment together cover the full bill amount, the bill is settled in Xero.

How this works with partial payments

If partial payments are enabled for your organisation, you may be able to choose a smaller cash payment amount after credits are applied.

This means a bill can be partly settled by credit note, partly paid by cash, and still have a remaining balance left open in Xero.

Partial payment example

Bill AmountCredit AppliedCash PaidRemaining Open Balance
$1,000$300$400$300

In this example, the bill is not fully settled. The remaining $300 stays open in Xero.

What suppliers see

If you send remittances from Batchly, the supplier remittance helps explain the final outcome of the payment run.

The remittance may show:

  • The bills included in the run
  • The amount settled by credit note
  • The amount paid by cash
  • Any remaining balance, where applicable

This helps explain why the cash payment may be lower than the total bill amount.

Important notes

  • A remaining cash payment usually means the credit notes did not fully cover the selected bill amount
  • Batchly can only apply credit notes that are available in Xero
  • Credit notes can only be applied to bills for the same supplier
  • Only the cash portion appears in the banking file
  • If partial payments are enabled, the selected cash payment may be less than the full remaining balance
  • Any unpaid balance remains open in Xero

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