Delinquent Accounts Payable

by Gary Tucker
(Kansas City KS USA)

Delinquent A/P

Delinquent A/P

I am behind financially with my manufacturer. About a year ago, he took the old balance I owe and has treated it as a completely separate amount from the business I have done with him since. I have sent him thousands of dollars for orders since he separated and isolated that old balance. It's like 2 accounts. The old balance keeps getting older and older. I have however paid some against the old balance as well.

Shouldn't any money I send to him be applied to the balance as a whole and not separated from one balance to another which would keep the account from growing farther and farther behind? Shouldn't the money be applied to the back end and not the front end? All the business I have done with this company has been for the same products for over 6 years.

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Dec 06, 2017
Unpaid Invoices
by: Anonymous

There are many ways in which unpaid invoice balances can be applied and accounted for. Typically, the invoices would not have been split into two and therefore any payment would automatically be applied to the oldest invoice first.

However, it sounds like he may have changed those original past due invoices into one loan payable which is why there are now two balances. In this case it would be normal to apply all payments to the oldest invoices first and have a separate payment to be applied to the loan.

If you want to make one payment for both, you would need to designate exactly which invoices you are paying and how much should be applied to the original balance payable.

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