Offset Invoice versus Bill?

[phraynck]

I have a customer, who we also use as a vendor. We both have $2000 balances we owe each other so we agreed to offset them. What is the best way to process this in peachtree? Am I able to offset the two in one transaction, or do I have to deal with each seperately.
Thanks!

[Jim Dale]

In the following example we will assume you owe a vendor $200 and the vendor owes you $75. You have this person/company set up as both a Vendor and a Customer.


Enter a purchase to your vendor for $200.

Enter a sale to your customer for $75

You really only owe the vendor $125 so write him a check for $125. To do this, go to Tasks, Payments and select the vendor. You should see the $200 invoice as outstanding. Only pay $125 against the invoice. This transaction will debit accounts payable for $125 and credit cash for $125.

Set up a suspense account. If you are unsure as to which account to use check with your CPA. It really doesn't matter what account type you use but the most common area would be Other Current Liabilities. The end result in these transactions will be $0.00

Go to Tasks, Receipts and bring up the customer. You should see a $75 outstanding sales invoice. Click Pay then click the Apply to Revenues Tab. Enter the suspense account in the line description. Then enter negative $75 for the amount. This will result in a $0.00 dollar net amount to cash. Enter a reference number and post.

Repeat step 5 on the Payments side. Go to Tasks, Payments and pull up the vendor. You should see a $75 outstanding purchase invoice. Click Pay then click the Apply to Expenses tab. Enter the suspense account in the account number field then enter negative $75 for the amount. This will result in a $0.00 dollar net amount to cash. Enter a reference number and post.


The Customer Ledger, Vendor Ledger, and General Ledger are the best reports to look at to see the flow of these transactions

[phraynck]

That worked out great....