Offsetting a contact's receivable against payable

An offset (or netting) is when a contact has both an outstanding invoice you owe them to pay (a payable) and money they owe you (a receivable). Instead of two payments, you can offset them against each other, settling both with a single net transaction.

Before you start

• The contact must have both a balance due to you (receivable, from a past invoice or sales order) and a balance they owe you (payable, from an unpaid bill or purchase).
• Both balances should be in the same currency. If they differ, offsetting may be complex; ask your accountant.
• You need permission to record payments or create documents.
• This is typically done when there is an agreement with the contact to settle both sides.

Steps

1. Go to Payments → New Payment
   Open in Usystems

2. Choose Payment type: Offset (or Netting, depending on your system).

3. In the Contact field, select the contact name.

4. The system will display:

   • Amount Due from Contact (receivable you are owed).
   • Amount Due to Contact (payable you owe).

5. Confirm the Offset Amount:

   • If the receivable is larger, the offset will reduce what the contact owes you; the remaining balance becomes payable.
   • If the payable is larger, the offset will reduce what you owe; the remainder becomes receivable.

6. Verify the Net Result (the direction and amount after offsetting).

7. Add a Note if needed (e.g., "Q2 mutual settlement").

8. Click Save.

Both sides are now settled to the extent of the offset. Any remaining balance stays on the contact's account.

Accounting impact

When you record an offset:

• The receivable account (money from the contact) is debited (reduced or cleared).
• The payable account (money to the contact) is credited (reduced or cleared).
• The net difference is recorded as a payment or receipt, depending on which side was larger.

This nets out inter-company or inter-contact balances without requiring separate payments.

Tips & common mistakes

• Only offset if both parties agree: an offset rearranges balances; make sure the contact agrees before proceeding.
• Same currency only: if the balances are in different currencies, you must handle them separately with manual exchanges.
• Review the math carefully: offsetting can be confusing if amounts differ. Double-check the calculated net result.
• Document the agreement: keep a note or email confirming the offset arrangement for your records.
• Check for partial offsets: if only part of one balance offsets the other, confirm the remainder is correctly reflected.

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