Offset Accounts Payable Vendor with Accounts Receivable Customer in Sage 100

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:

SPL & Associates has an Accounts Payable invoice of $625.

Customer 02-SPL has an Accounts Receivable balance of $14,457.50. (Note:  The customer number and vendor number don’t need to be the same).

First in Accounts Payable | Setup | Vendor and Customer Link Maintenance, select the customer, then select the vendor and click “Accept” to accept the link.

Next, offset AP with the AR balance.

In Accounts Payable | Period End, select “AP from AR Clearing Selection.”

Select “Proceed.” Select the printer to run the AP from AR Clearing Register.

Select “Yes” to update the register.

Print the Daily Transaction Register.

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.

A review of your vendor will show the update:

A review of your customer also reflects the new information:

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.