Supplier Balance Adjustment – An overview

Introduction

Usually, the advance payments of a supplier and the liability documents are booked at various stages.  Also, raising debit and credit notes effects post invoice corrections. If these are not set off or matched against the other, then the supplier account will show an un-reconciled debit and credit balances. For example, a supplier raises an invoice of USD 5000/- towards which an advance of USD 2500/- has already been paid. If the advance is not set off against the invoice, the supplier’s control account and prepayment account would be reflecting an amount of 5000/- credit and 2500/- debit respectively. Also, the invoice will be reflecting an unadjusted amount to the tune of 5000/- and when retrieved for payment, will be for an amount of 5000/-.

In order to reflect the correct adjusted balances of the supplier, there is a need to carry out a process of adjustment. This Component helps achieving the above objective.

Feature Highlights

Following are some of the features supported in this component:

• Facility to adjust multiple debit and credit documents at the same time as a part of a single adjustment voucher batch.

• Facility to adjust documents that have been raised in different business units within the same company

• Facility to adjust the debit and credit documents of different currencies through the ”Multi-currency Adjustment Voucher” activity.

• Facility to calculate the “Discounts” for early payments and “Penalty” for delayed payments based on the payment schedule and the settlement dates. This information can also be modified.

• Facility to calculate and book the variances in the exchange rates for the base currency and the parallel base currency when the adjustment voucher is authorized.

• The system retrieves the account codes for the supplier based on the defined account rule.

• The system retrieves the account codes for the variance, discount, penalty accounts from the account rule defined for the additional usage.

• The exchange rate that is considered will be the one with which the participating documents were originally recorded.

• When adjustments are made across finance books the Inter FB accounts are debited / credited as the case may be.

List of Activities