How to offset AR and AP?

Scenario:

-We have made a sale to a customer for $100,000.

-We have also incurred an expense from the customer for $20,000.

-Rather than just exchanging cheques, customer would like to simply pay us $80K.

 

Problem:

-When we make a sale, entries would be Dr. A/R Cr. Sales $100K

-When we incur the expense, we would enter them in payables Dr. Expense Cr. A/P

-When they appropriately short pay us, I'm left with an open A/R and A/P amount of $20K. -- How do I clear these in the subledger?

 

Thank you.

 

  • Hi Jeremy,

    There is a module called Customer / Vendor Consolidations that can automatically create Credit Memos in both Payables and Receivables to get rid of the remaining 20k balances in both modules. Whether you have this module or not will depend on your Dynamics GP licensing, if you're not sure, your GP partner should be able to help you with it.

    If you do not have the Customer / Vendor Consolidations module, you can do this manually:

    1. Enter a credit memo for $20k in Payables, debit AP, credit Suspense. Apply credit memo to the AP invoice for $20k.
    2. Enter a credit memo for $20k in Receivables, debit Suspense, credit AR. Apply credit memo to the remainder of the AR invoice for $100k.

    You can use any account for the Suspense, since it will net out to zero.

     

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