Perform Netting of Customer Payment Difference against Supplier Invoice

This instruction explains how you match a recorded difference between a customer payment and the original customer invoice with a supplier invoice. This is also called netting.

Netting is used when a customer (or rather, a payer) is also a supplier and has reduced the customer payment with reference to a previously sent supplier invoice. The payment is allocated to the customer invoice as a full or partial payment. The payment difference is then set off, or matched, against a supplier invoice in accounts payable.

Outcome

Customer payment differences are netted against invoices in accounts payable. An accounting journal, a customer payment journal, and a supplier payment journal are printed.

The general ledger, accounts receivable, and accounts payable are updated. The following account entries are created:

Account Debit Credit Accounting Rule
(1)

Customer

x

(2)

Supplier

x

AP10-200

Bank

x

(1) Account entry based on the original customer invoice.

(2) Account entry based on the supplier invoice.

Before you start

  • The starting conditions listed in Adjusting Customer Payments must be met.
  • FAM function AP20 for calling 'Supplier Payment. Enter Manual' (APS120) in accounts payable must be selected in a detail record under FAM function AR30. This is done in 'FAM Function. Open' (CRS405).
  • The customer number must be entered for the supplier in 'Supplier. Define Purchase & Financial' (CRS624/E). This number is used to identify the customer with the supplier.

Follow These Steps

Prepare for Netting

  1. Enter a payment directly on 'Payment Received. Record' (ARS110/E), using 'Journal Entry & Payment. Open' (GLS110/B), or on 'Payment Document. Enter' (ARS105).

  2. When the allocation panel (ARS110/F) is activated, select sorting order 1 = Payer and enter the payer

  3. If you entered a payment amount, allocate the entire amount to the respective customer invoice records.

  4. Select option 1 = 'Full payment' or 11 = 'Partial payment' for the invoice record(s) that should be netted.

    For detailed information on using these options, refer to See Also.

    The invoice record amount is displayed in the 'Amount left to distribute' field.

Carry Out Netting

  1. Select option 17 = 'AP netting' in the Option field in the panel header to activate 'Supplier Payment. Enter Manual' (APS120/F).

    The F panel lists all invoices recorded for the customer/supplier. The amount left to distribute in (ARS110/F) is automatically transferred.

  2. Change the proposed supplier, if necessary.

  3. Allocate the transferred amount to the relevant supplier invoice records by using the available accounting options in (APS120/F).

    The accounting options are listed by pressing F1 in the Option field in the panel header.

  4. When the entire amount is allocated, press F3 to create an accounts payable voucher and to return to (ARS110/F).

    It is not possible to return to (ARS110) until this amount is completely allocated.

Finish the Activity

  1. In (ARS110/F), press F3 to assign a voucher number to the voucher.

  2. Inform the customer that you have deducted the supplier invoice amount with the amount of the customer invoice you created.

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