Let’s consider a scenario where the outstanding amount against a Sales Invoice is 20,000. When the client makes a payment, they only pay 19,600. The remaining 400 needs to be recorded under the tax withhold account. Here’s how you can manage this situation:

Step 1: Setup Withhold Account

Create a Withhold Account in your Chart of Accounts.

Step 2: Payment Entry

To create Payment Entry, go to unpaid Sales Invoice and create click on Make Payment button.

Step 2.1: Enter Payment Amount

Enter Payment Amount as 19,600.

Step 2.2: Allocate Against Sales Invoice

Against Sales Invoice, allocate 20,000.

Step 2.3: Add Deduction/Loss Account