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January 2012
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Quick Tip: Accountants Corner

Offsetting Vendor and Customer Balances

Quite often you may have a trading partner who is both a customer and a vendor to your organisation. In such instances you may have a need to offset a vendor balance, in the form of unpaid bills, against a customer balance, in the form of unpaid invoices.

Potentially there are a few different ways of offsetting these balances. The easiest is most probably to use a Journal transaction. To do this you will need to:

Debit : Accounts Payable
Credit : Accounts Receivable

In generating such a journal it is very important that you insert both the customer and vendors names in the “Name” field on each line of the journal. If you don’t do this the transaction won’t reflect against the Customer/Vendor account and your AR/AP control accounts will end up out of sync with their respective General Ledger balance sheet accounts.

It is also important that the transaction does not create a VAT/Tax transaction. To ensure this does not occur, you should either not insert any VAT/Tax codes or use a VAT/Tax code which is specifically setup to not display in your VAT/Tax reports.

To “Apply” the offset amounts against both the open Invoice and the Bill (and thus “close” the Invoice and Bill), you need to “check” the applicable journal on the “Credits” tab of the open Invoice and the journal on the “Apply” tab of the Pay Single Vendor screen. Once you have netted off the journal against the respective Customer Invoices and Bill you will have a zero value Customer Payment and/or Bill Payment. This is correct (unless you still have a valid remaining balance still to pay or receive after performing the offset) as this transaction in effect simply “Applies” the journal against the correct Customer Invoice/s and Bill/s and “Closes” them.


Billing Customers in Advance of Fulfilment
It is possible to turn on "Bill in Advance of Fulfilment" in Setup > Accounting > Setup Accounting but there are important considerations to take into account before doing this which you need to be prepared for:

  1. If you turn on "Bill in Advance of Fulfilment" it applies globally to all Sales Orders.
  2. Remember that you will be billing all sales orders irrespective of whether or not you have sufficient stock or not. The implication of this is that you will probably end up issuing a lot of credits/refunds for goods billed that for some reason or other you could not ship at the time of billing.
  3. Billing the customer's credit card in advance of shipping the goods is sometimes contrary to the terms and conditions of your Merchant account facility. Normally the funds are only pre-authorised at time of order and the credit card is only actually charged once the goods are shipped and the subsequent Sales Order is Billed (Invoiced).

In practice customers who try out this option often end up reverting back to the standard process, mostly because of the added effort required in processing additional refunds.

NetSuite Version 2012.1 Release

NetSuite Version 2012 Release 1 is about to begin rollout. Some of the new features being introduced include:

  • Inventory Available-to-Promise Visibility for Manufacturers and Wholesalers
  • Allow Serial/Lot Items as Components of a Kit Item
  • Accept Customer Deposits on Sales Orders and Invoices
  • Global Electronic Payment Processing including BACs Standard
  • Reply to and Forward Messages within NetSuite Email
  • New Advanced Ignite Ecommerce Platform
  • CSV Import Performance Improvements
  • QuickView "Hovers" Enhancements

View the Version 2012.1 Sneak Peak here »

Did you know?

You can add a "Last Sales Activity" field to your customer record:

You can now easily add the Last Sales Activity (LSA) field to lead, prospect, customer, contact, and opportunity records. The field displays the last date any sales activity was performed for that record. The "Last Sales Activity" could be your last Call, Event, Task or Campaign that was associated with that record.

How does this help you?
The Last Sales Activity field can be used to drive reminders, KPIs, call cycles or email notifications set up as saved searches based on a records last sales activity date. For example you could create a saved search on your sales teams dashboard which displays all customers that have not been contacted in the last 30 days.

How do I set it up?
To set it up you need to install NetSuite Last Sales Activity Suiteapp bundle which is freely available. For detailed instructions go to the NetSuite "Help" and search on "Last Sales Activity"

Customer spotlight: Orlebar Brown

Learn how BlueBridge One together with NetSuite has helped leading Swimshorts and Resort Ware designer, Orlebar Brown, streamline their fast growing business. Read case study »

We're moving offices:

From the 1 March we will be relocating our offices to Weybridge, Surrey. The new address will be:

Abbey House
Wellington Way
Brooklands Business Park
KT13 0TT
United Kingdom

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