Offset Balance Between AR & AP

It is possible for the same business partner to play more than one role. An agent might sell your products to customers while also supplying services to you. From an accounting perspective, this means the partner can appear in your system as both a Debtor (Accounts Receivable) and a Creditor (Accounts Payable).

In Tourplan, Debtors and Creditors are managed in separate applications and are not automatically linked. Because of this, balances cannot be netted off directly. Instead, finance teams use a contra process through the General Ledger to offset amounts cleanly and accurately.

This article explains the:

• concept

• setup

• practical steps for offsetting AR and AP balances in Tourplan

Written especially for finance staff and beginner accountants.

Setup General Ledger, Receipt Type and Payment Type for AR AP Conta

1. Open the General Ledger Financials > General Ledger

   1. Click the Home Menu to expand it:

      

   2. Click the Financials menu option to expand it:

      

   3. Click General Ledger to go to the General Ledger application:

      

2. Insert a General Ledger for AR AP Contra.

3. Open Code Setup > Debtors > Receipt Type.

   1. Click the Code Setup menu to expand it:

      

   2. Click the Debtors menu option to expand it:

      

   3. Click Receipt Type to open the Receipt Type screen:

      

4. Insert a Receipt Type and link it to the AR AP Contra General Ledger.

5. Open Code Setup > Creditors > Payment Type.

   1. Click the Code Setup menu to expand it:

      

   2. Click the Creditors menu option to expand it:

      

   3. Click Payment Type to open the Payment Type screen:

      

6. Insert a Payment Type and link it to AR AP Contra General Ledger.

Offset an outstanding amount between AR and AP using the Contra General Ledger

1. Open the Debtors application, locate the Debtor.

2. Insert a Debtors Receipt using Receipt Type AR AP Contra.

   

3. Select the AR Invoice for payment.

   

4. Preview the AR Transactions screen.

   

5. Check there is a Balance in the GL before paying the Creditors outstanding.

   

6. Open the Creditors application. Locate the Creditor.

7. Insert a Cheque within the Creditor using Payment Type AR and AP Contra.

   

8. Select the AP Invoice for payment.

   

9. Preview the AP Transactions.

   

10. Open the General Ledger.

11. Net Effect at General Ledger Balance is offset to 0.00.

    

12. Detailed entries can be found from Transactions tab.