> ## Documentation Index
> Fetch the complete documentation index at: https://www.aiaccountant.com/help/llms.txt
> Use this file to discover all available pages before exploring further.

# Bill and invoice allocation

> What the allocation window does, when to use New Reference, and how to split an entry against an advance.

Allocation tells Tally how an amount should be tracked against a party. It is what makes an entry appear in Tally's outstanding statement with a reference and a due date, rather than as a bare amount.

Sales invoices and purchase bills are allocated the same way, from the **Allocate Invoice** window.

## The fields

| Field             | What to enter                                                                                                                        |
| ----------------- | ------------------------------------------------------------------------------------------------------------------------------------ |
| Type of Reference | New Reference, for a fresh sale or purchase.                                                                                         |
| Name / Ref No     | The reference shown in Tally's outstanding statement. Use the invoice number for a sale, the supplier invoice number for a purchase. |
| Due Date          | When payment is expected or falls due. This drives ageing and outstanding reports in Tally.                                          |
| Amount            | Must add up to the entry total across all reference rows.                                                                            |

Click **Confirm & Allocate** when the rows are correct.

## Reference types

| Type              | Use it when                                                                |
| ----------------- | -------------------------------------------------------------------------- |
| New Reference     | The entry creates a fresh receivable or payable. This covers most entries. |
| Against Reference | The amount settles a reference already outstanding for that party.         |
| Advance           | The amount relates to money received or paid before the invoice.           |
| On Account        | The amount is not being tied to a specific reference.                      |

## Splitting an entry across references

If part of a bill is adjusted against an advance already paid to the vendor and the rest is a new payable, use two rows: one for the advance portion, one with New Reference for the balance.

Click **+ Add Another Reference** to add the second row. The rows must total the entry amount. For most entries, one New Reference row is enough.

## Common mistakes

* **Using a reference other than the invoice number.** The outstanding statement in Tally becomes hard to match against the physical document. Keep them the same.
* **Leaving the due date generic.** Ageing buckets in Tally are only as good as the due dates you set.
* **Rows that do not total the entry amount.** The allocation will not confirm until they do.