Netting off the purchases with Sales


I have a customer who is a supplier at the same time. I purchased from him 1000 materials and I sold him services for 1500.

He want to pay me the net off amount $ 500.

How I can post it on Manager?

Read the Guide:

If you have entered the

  • Purchase invoice for 1000
  • Sales invoice for 1500

When he pays you 500 you need to

  • enter the payment for 500
  • allocate 1500 to accounts receivable, him as a customer, his sales invoice
  • allocate -1000 to accounts payable, him as a supplier, his purchase invoice
  • print all 3 documents & send to him as a summary of the transaction

I don’t think that this is correct under a legal point of view since this doesn’t reflect the logical succession of the events.

You must have an evidence that is fine for both of you to compensate the credit and the debit (it is sufficient even an email and a replay between the two parts).

Once you have it, you do a journal entry with which you compensate liabilities and assets dated with the same day of the agreement.

Once you receive the money you close the accounts receivable.

I had assumed the invoices are sent as owing initially.

When payment is received they are sent showing paid together with the payment document

If you want Manager to do better than this, then look at this suggestion

Me too. That’s why you have to do a journal entry.

Many countries aren’t that particular from a legal perspective, it’s just an ad hoc understanding between the business. Each business has issued their respective invoice, how they are settled is by mutual agreement.

A payment by any one of the businesses confirmations the arrangement.

Offsetting of receivables against payables is permitted under the IFRS provided that it is contractually agreed by both parties.