Is there a preferred way to handle setting off supplier balances against the same entities customer account....or vice versa??
I have always shown the full payment and receipt in the bank account which means that the net payment is correct not obviously not exactly as it appears on the bank statement. I have therefore tried to document this by printing out the statement and highlighting the items 'set-off'.
I only ask as I have come across a client who had received credit notes from their supplier who had intended to provide for this set-off - it clearly hadn't sorted out the sales ledger in my clients accounts. The credit notes are clearly wrong in my opinion and as it was a long time ago (and I do see these amounts in the purchase ledger that tie in with the (now very old) sales ledger balance).....all I can do is raise a credit note in this period to clear the sales ledger. Two wrongs etc.....but what else to do??!
Anyone else seen credit notes used to handle this kind of thing????
