Have you ever encountered a vendor who also was a customer? In this unique situation, the balance in accounts payable can be offset with the balance in accounts receivable.
Here’s an example:
Next, offset AP with the AR balance.
Select “Yes” to update the Daily Transaction Register to ensure the AP trail balance and AR trail balance both will balance to the general ledger.
Note that bank code Z is used during the clearing process.
After the update, the customer has a clearing payment for individual invoices, and the vendor has either a debit or credit invoice posted to the account balance. AP invoices don’t have individual invoice postings. The debit or credit invoice posted to AP can be processed like invoices entered using Accounts Payable Invoice Data Entry. This invoice can be paid or applied to another invoice during manual payment entry by using General Ledger Distribution.
To learn more about this topic or others, contact a BKD Technologies Sage professional.