A supplier credit balance should not silently reduce another creditor claim

The net total conceals two different positions

The accounts-payable report contains large amounts owed to suppliers and several negative balances. Your proposal uses only the net total as the creditor liability figure. Before relying on that number, explain the negatives. They may represent credits, overpayments, posting errors or another transaction, rather than cash available to reduce what unrelated creditors are owed.

Review each negative separately

List the supplier, amount, date and underlying document. Ask the bookkeeper whether an invoice is missing, a payment has been entered twice or a credit has been applied incorrectly. Keep any genuine amount recoverable from a supplier visible as its own issue. A debit balance in one account does not explain a different creditor's claim.

Use the supporting records

Business.gov.au's record-keeping guidance includes business invoices, payments and banking records. Reconcile those records with the ledger before changing the proposal. Preserve the original entries and the explanation for corrections. Avoid deleting an inconvenient balance or applying a credit to a different entity simply to produce a total that matches the proposed funding.

Source: business.gov.au: Record keeping

Consider an advance for undelivered goods

Imagine one supplier account shows an advance payment for goods not yet delivered while another supplier is owed for completed deliveries. A net report can make the total exposure appear lower. The advance still requires its own analysis: delivery, refund and recoverability are separate questions. It should not be assumed to fund the other supplier's payment.

Ask the adviser how to present the position

Provide the gross creditor balances and the explanation of negative items to the accountant and insolvency adviser. Ask how claims, possible assets and any legally available set-off should be treated in the actual process. This reconciliation does not establish an entitlement to combine balances or determine the amount any creditor must accept.

Reconcile the proposal to the underlying accounts

Keep a bridge between the original report and the reviewed schedule, showing each correction and unresolved item. Update the figures consistently before circulation. A clear liability base separates money owed from credits or possible recoveries, giving creditors a proposal they can understand without mistaking a convenient net figure for the complete financial position.