Compensations

If a partner is both a vendor and a customer and has both debt and receivables recorded in Business Central, it is possible to create a compensation suggestion with purchase and sales invoices available for applying. The compensation suggestion is sent to the partner for approval, and meanwhile the customer and vendor ledger entries included in the compensation suggestion are marked for compensation, preventing them from being applied manually. Following the receipt of the partner’s approval for compensation, the general journal entries are posted and customer and vendor ledger entries applied or closed.

Application setup

General journal template setup:

General journal template:

General journal batch:

User manual

Creating a compensation suggestion

Open the payment journal, general journal template KOMPENZAC:

Select the general journal batch KOMPENZ:

For creating a compensation suggestion, click Home, Suggest compensation:

A window opens, where the user enters the posting date of the compensation (the default date is always the current date), changes the description if necessary and enters the order of suggestion for the compensation – invoices first, credit memos first or by entry no:

Furthermore, the user enters the vendor no. for which the compensation suggestion is created.

After clicking “OK”, the system creates the general journal lines with suggested customer and vendor ledger entries for compensation (mutual applying):

The default Reason Code is set to KOMPENZAC and the document number can be predefined in the number series in the General Journal Batch.

The documents to be applied are also automatically entered in the application fields, thereby enabling the application of customer and vendor ledger entries at the same time of posting the compensation in the payment journal.

Printing the compensation proposal and reserving entries for compensation

After checking the general journal, the compensation proposal is printed by clicking Home -> Compensation Proposal:

The compensation proposal is available in English and Serbian, depending on the selected language in My Settings. It lists all the documents available for mutual offsetting:

As soon as the compensation suggestion is entered in the payment journal, all the documents in the general journal lines listed in the compensation suggestion are marked green in the customer and vendor ledger entries and the field “Reserved by compensation” is checked:

This prevents the entries marked for offsetting to be applied manually or automatically with other entries. As soon as the entry marked for offsetting is deleted from the general journal line, it will no longer be checked as Reserved by Compensation, and it will not be green anymore.

Users are able to delete or change the general journal lines created as compensation suggestion.

Posting the compensation

After receiving confirmation of the compensation proposal from the partner, the compensation is posted by clicking Home -> Post:

Entries are posted in the general journal on GL accounts defined for receivables from customers and vendor debts:

And the applications are posted in the Detailed Customer/Vendor Ledger Entries:

[Note]: It is possible to create as many compensation suggestions in the general journal as necessary. Each compensation suggestion will receive a new, subsequent document number, and the posting of a chosen compensation is possible by filtering the general journal lines by document no.