Where the company is both a customer and a supplier it is possible to offset an amount owed on a debtor account against a creditor account to reduce the amount outstanding on both. Once users has determined the amount being offset users will need to enter transactions on both the debtors side and the creditors side as per below.

 

Debtors Side

 

1.Enter a Debtors Journal via Debtors Journal Entry

2.Enter the amount as a negative (eg. a Credit Journal), using tax code N, to the general ledger account for ‘General Clearing’ (eg. G/L 2810). Enter more than one journal if the debt is spread across multiple customers. Update the batch.

3.Offset these CJ (credit journals) against the invoices in Debtors Posting.

 

Creditors Side

 

1.Enter a creditors invoice via Creditors Invoice Entry/Maintenance - use CJ numbers from the debtors side as the invoice number,

2.Enter the amount as a negative, using tax code N, to your general ledger account ‘General Clearing’ (eg. G/L 2810).

3.Save invoice and update the batch.

4.Offset the credit(s) against the invoices by using the ‘Apply Credit’ option in Creditors Invoice Enquiry.