Negotiated Settlements In A/P

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Negotiated Settlements In A/P

If you negotiate a settlement with a supplier in accounts payable, you would need to enter a credit invoice for the negative amount necessary to bring the amount due to the supplier down to the negotiated amount and charge the invoice to the discounts allowed account. Use this credit when selecting the invoices to be paid in order to write the A/P check for the negotiated amount.
The results of this process should be documented.
We strongly recommend that you consult with your accountant or CPA for the preferred method of handling this transaction. Some transactions may have potential tax and/or legal ramifications that should be discussed with your advisors.