AR vs AP Settlement

1

Hi All,

I’m facing an issue that is the AR and AP inflated because due to the nature of my employer services our vendors are our customer at the same time, meaning we sell to them and we buy from them (sales invoice and purchase invoice).

I’m not sure on how to process this as an accounting entry/treatment, shall I;

  1. book all the purchase invoices as AP.

  2. Book all the sales invoices as AR.

  3. Issue Debit Notes and Credit Notes to settle the variances (reconciliation).

Example;

Invoice
Month Operator AR AP Settlement
Jan-22 Z $ 104.40 $ 91.34 $ 13.06
Feb-22 Z $ 109.62 $ 134.02 $ (24.41)
Mar-22 Z $ 139.44 $ 114.22 $ 25.23
Dec-21 A $ 85.19 $ 89.28 $ (4.09)
Apr-22 A $ 82.56 $ 90.02 $ (7.46)
May-22 N $ 0.24 $ 0.27 $ (0.03)

I appreciate anyone who have a solid experience in this scope who can support me.

2

@Haitham_FALEH Please do not add your personal details such as your email and telephone number to your public post again. This is the second time.

1 Like
3

Noted with thanks…

4

Read the Guide about offsetting simultaneous sales and purchase invoices. It covers exactly your situation.

You already liked a post of mine in another thread pointing to the solution.