What is chargeback accounting

Single document with multiple customer or vendor records

  • 10 minutes to read

Important

Dynamics 365 for Finance and Operations has evolved into purpose-built applications that you can use to manage certain business functions. For more information about these changes, see the Dynamics 365 Licensing Guide.

This topic provides an overview of what happens when you post a single document with multiple customer and vendor records. This functionality will no longer be available in future versions. As a result, we do not recommend using this posting method because of the accounting implications for clearing processing.

Some common examples of using a document for multiple customers or vendors include balance transfers between customers and finding the net worth of balances between customers and vendors in the same organization.

A receipt that contains multiple customers or vendors can be entered using one of the following methods:

  • Use a capture where the Just a receipt number is selected so that each line item added to the journal is on the same receipt.
  • Use a multi-line document that has no offset G / L account with more than one customer or vendor.
  • Enter a receipt, with the account and offsetting account being vendor / vendor, customer / customer, vendor / customer, or customer / vendor.

This topic shows how clearings are processed when a document is posted with multiple customers or vendors. Additionally, this topic provides workarounds that you can use to understand how to avoid using a document with multiple customers and vendors. In particular, there are examples that illustrate two general clearing scenarios that are affected by using a document with multiple customers or vendors:

  • Cash discount accounting
  • Revaluation accounting

How does the offset affect the use of a single receipt?

When you post a document that contains multiple customer or vendor records, a single accounting document is created that contains multiple customer or vendor account balances. During the clearing process, the original accounting entries are used to create accounting entries for the cash discount, unrealized gains and losses, realized gains and losses, and the discharge of the source document summary account. For example, if a cash discount is used when clearing a vendor payment for an invoice, the cash discount accounting must post from the original invoice to the vendor general ledger account. If the original invoice was posted on a document that contains multiple vendor records, the original accounting is merged. Since there is no way to access the detailed accounting entry for each vendor posting in the individual document, there is no way in this case to determine how the user wanted to account for the cash discount.

A document with several vendors and the effects on cash discount accounting

The following example shows multiple vendor invoices in the general ledger on a single document on the page General coverage detected. These invoices are spread across multiple account dimensions.

receiptAccount typeaccountdescriptionburdenCredit
GNJL001supplier1001INV1100,00
GNJL001supplier1001INV2200,00
GNJL001supplier1001INV3300,00
GNJL001Companies606300-001--INV150,00
GNJL001Companies606300-002--INV150,00
GNJL001Companies606300-003--INV2200,00
GNJL001Companies606300-004--INV3300,00

A receipt is created after posting.

receiptaccountBooking typeAmount in posting currency
GNJL001606300-001--Journals created50,00
GNJL001606300-002--Journals created50,00
GNJL001606300-003--Journals created200,00
GNJL001606300-004--Journals created300,00
GNJL001200110-001-Accounts Payable Balance-100,00
GNJL001200110-001-Accounts Payable Balance-200.00
GNJL001200110-001-Accounts Payable Balance-300,00

Note that the document contains three entries for the posting type of the vendor balance in the single document. There is no way to indicate that the debit of 50.00 for 606300-001 and the debit of 50.00 for 606300-002 are intended to clear the vendor balance of 200110-001. This is because the user entered multiple vendor records on a single receipt.

Using this example, we can analyze the impact of using a receipt on downstream clearing accounting. Suppose you pay 197.00 of the invoice for 200.00 by taking a 3.00% discount. Note that the cash discount account value is allocated across all dimensions from the output accounts of the invoice document. This is because a receipt was used to post the above invoice with no indication of how the user intended the expense distributions to correlate with the accounts payable balance in a single receipt.

receiptaccountBooking typeburdenCredit
APPAYM001200110-001-Accounts Payable Balance197.00
APPAYM001110110-001-Bank197.00
14000056520200-001--Accounts Payable0.25
14000056520200-002--Accounts Payable0.25
14000056520200-003--Accounts Payable1,00
14000056520200-004--Accounts Payable1.50
14000056200110-001-Accounts Payable Balance3,00

If the user is dissatisfied with the cash discount being applied across all expense distributions from the original invoice, multiple receipts should be used to record the invoices instead of one receipt. The following example shows how multiple documents can be entered in the general ledger instead of using one document as shown at the beginning of this example.

receiptAccount typeaccountdescriptionburdenCreditOffsetting entry typeContra account
GNJL001supplier1001INV1100,00Companies:
GNJL001Companies606300-001--INV150,00Companies:
GNJL001Companies606300-002--INV150,00Companies<leer>
GNJL002supplier1001INV2200,00Companies606300-003--
GNJL003supplier1001INV3300,00Companies606300-004--

If INV2 is now paid, the following entry is made. Note that the financial dimensions of the cash discount follow the financial dimensions of the assigned expenses.

receiptaccountBooking typeburdenCredit
APPAYM001200110-001-Accounts Payable Balance197.00
APPAYM001110110-001-Bank197.00
14000056520200-003--Accounts Payable3,00
14000056200110-001-Accounts Payable Balance3,00

A multiple vendor receipt and the accounting impact of realized gains / losses

receiptAccount typeaccountdescriptionburdenCreditAccount typeaccount
GNJL001supplier1001INV1100,00Companies606300-001--
GNJL001supplier1001INV2200,00Companies606300-002--

The following example shows multiple vendor invoices in the general ledger on a single document on the page General coverage detected. These invoices are spread across multiple account dimensions. A receipt is created after posting.

receiptaccountBooking typeAmount in posting currency (EUR)Amount in accounting currency (USD)
GNJL001606300-001--Journals created100,00114.00
GNJL001606300-002--Journals created200,00228.00
GNJL001200110-001-Accounts Payable Balance-100,00-114,00
GNJL001200110-001-Accounts Payable Balance-200.00-228,00

Note that the document contains two entries for the posting type of the vendor balance in the single document. There is no way to specify that the debit for 606300-001 should clear the vendor balance entry from 100.00 to 200110-001. This is because the user entered multiple vendor records on a single receipt.

Using this example, we can analyze the impact of using a receipt on downstream clearing accounting. Let us assume that the accounting currency is USD and the above postings were posted in the booking currency EUR. Let's assume that you pay the bill for EUR 200.00 in full, but you notice a realized loss due to a difference in the exchange rate between the time you posted the bill and payment. Note that the account value of the realized loss is allocated across all dimensions from the output accounts of the invoice document. In this case, both dimensions 001 and 002 have been allocated, although in the user's perception, only 002 may belong to the expense account of the invoice that is being paid. This is because a receipt was used to post the above invoice without leaving any indication of how the user intended the expense distributions to correlate with the accounts payable balance in a single receipt.

receiptaccountBooking typeAmount in posting currency (EUR)Amount in accounting currency (USD)
APPAYM001200110-001-Accounts Payable Balance200,00230.00
APPAYM001110110-001-Bank-200.00-230,00
14000056801300-001-Price loss0,000.67
14000056801300-002-Price loss0,001.33
14000056200110-001-Accounts Payable Balance-2,00

If the user is dissatisfied with the fact that the exchange rate loss is apportioned across all expense distributions from the original invoice, multiple receipts should be used to capture the invoices instead of one receipt. The following example shows how multiple documents can be entered in the general ledger instead of using one document as shown at the beginning of this example.

receiptAccount typeaccountdescriptionburdenCreditOffsetting entry typeContra account
GNJL002supplier1001INV1100,00Companies606300-001--
GNJL003supplier1001INV2200,00Companies606300-002--

If INV2 is now paid, the following entry is made. Notice that the financial dimensions of the exchange rate loss follow the financial dimensions of the associated expense.

receiptaccountBooking typeAmount in posting currency (EUR)Amount in accounting currency (USD)
APPAYM001200110-001-Accounts Payable Balance200,00230.00
APPAYM001110110-001-Bank-200.00-230,00
14000056801300-002-Price loss0,002.00
14000056200110-001-Accounts Payable Balance-2,00

A receipt for balance transfers and balancing scenarios

Two common scenarios that use a document that contains multiple customers or vendors include balance transfers from one customer / vendor to another customer / vendor, and the offsetting of a customer and vendor that are the same organization. The following two examples show the preferred method for entering these scenarios as an alternative to entering them in a receipt.

A Balance transfer is a document with several customers that are entered for the purpose of transferring the balance from one customer to another customer (the same applies to vendors). This scenario can occur when responsibility for paying the invoice is transferred to another party, such as when a subsidiary transfers responsibility to the parent company.

This example assumes a sale in which the customer is entitled to a discount if payment is made within 10 days. The customer in this example uses an insurance company that is responsible for paying the invoice. The insurance company is set up as the second customer in the system. The balance of the original debtor is transferred to the insurance company, which pays the invoice using a 2% discount for payment within the discount period.

To illustrate, let's assume that the following sale is made to the customer ACME. The following accounting entries represent the sale.

G / L accountBooking typeburdenCredit
401100-002-023-Sales revenue100
130100-002-Accounts receivable balance100

Next, the user transfers the balance due from ACME to the insurance company in a receipt in the accounts receivable payment journal. The insurance company is set up as a debtor insurance company.

receiptAccount typeaccountdescriptionburdenCreditOffsetting entry typeContra account
ARPAYM001customerACMETransfer100,00customerinsurance

Note that the above entry is contained in a receipt. This document contains two customer records. The following document is created when the above general ledger entry is posted.

receiptaccountBooking typeAmount in posting currency
ARPAYM001130100-002-Accounts receivable balance100,00
ARPAYM001130100-002-Accounts receivable balance-100,00

Then we assume that you receive a payment from the insurance debtor for 98.00 and you choose whether the payment should be settled with the invoice generated by the balance transfer. This leads to the posting of the following document. There may be an expectation that the settlement will use the financial dimensions from the original invoice, but it cannot because there is no invoice document for the insurance debtor. Note that, by default, the cash discount distribution dimensions come from the customer posting created from the transfer, not from the revenue account of the original invoice. The standard is a result of using a receipt to transfer the balances.

receiptaccountBooking typeburdenCredit
ARPAYM002110110-002-Bank98.00
ARPAYM002130100-002-Accounts receivable balance98.00

In the associated voucher for the cash discount, the standard for the financial dimension comes from the customer posting that is created from the transfer because the transfer has more than one customer.

receiptaccountBooking typeburdenCredit
ARP-00001403300-002-Customer account2.00
ARP-00001130100-002-Accounts receivable balance2.00

If the user is not satisfied with the standard for the financial dimensions for the cash discount, several documents should be used instead of one document to record the balance transfer. This scenario should be accomplished by creating a credit memo for the customer who the balance was moved FROM and creating a debit or invoice for the customer who the balance was moved to. The following example shows how multiple receipts can be entered into the customer payment journal to transfer the balance instead of using one receipt as shown earlier in this example.

receiptAccount typeaccountdescriptionburdenCreditOffsetting entry typeContra account
ARPAYM001customerACME100,00Companies401100-002-023-
ARPAYM002customerinsurance100,00Companies401100-002-023-

This means that if the insurance debtor pays 98.00 with the document ARPAYM02, the correct financial dimensions from the G / L account entry of the document ARPAYM002 are used.

receiptaccountBooking typeburdenCredit
ARPAYM003110110-002-Bank98.00
ARPAYM003130100-002Accounts receivable balance98.00

In the corresponding voucher for the cash discount, the financial dimensions from the clearing sales revenue account are used, which is displayed on the voucher from ARPAYM002.

receiptaccountBooking typeburdenCredit
ARP-00001403300-002-023-Customer account2.00
ARP-00001130100-002-Accounts receivable balance2.00

A document with a netting for several customers and vendors

Offsetting can be useful when an organization purchases from the same company that it sells to. Instead of paying the vendor invoices and waiting to receive payment for the customer invoices, the vendor and customer invoices are netted. The balancing entry is cleared against the outstanding balances.

To illustrate, let's assume that vendor 1001 and customer US-008 are the same entity. So, your organization wants to balance the accounts payable and accounts receivable before the remaining balance is paid / received. So let's say the customer record owes $ 75 and the vendor record owes $ 100. That means you would prefer to settle the balances and only pay the vendor $ 25.00. Further assume that the accounting currency is USD. In this case, a netting posting is entered in a receipt in the accounts payable payment journal.

receiptAccount typeaccountdescriptionburdenCreditOffsetting entry typeContra account
APPAYM001supplier1001Offsetting75,00customerUS-008

In order to avoid undesirable problems with future clearings for this posting, several documents should be entered in the entry for recording the balancing postings instead of one receipt. Note that the customer and vendor balances are settled with a single clearing account to avoid using a document that contains multiple customer and vendor balances.

receiptAccount typeaccountdescriptionburdenCreditOffsetting entry typeContra account
001customerUS-00875,00Companies999999---
002supplier100175,00Companies999999---