How to reduce a customer's outstanding credit balance when you have Receivables Management and Payables Management registered in Microsoft Dynamics GP

This article describes how to reduce a customer's outstanding credit balance when you have the following modules registered:

• Receivables Management in Microsoft Dynamics GP and in Microsoft Business Solutions - Great Plains
• Payables Management in Microsoft Dynamics GP and in Microsoft Business Solutions - Great Plains

Applies to:   Microsoft Dynamics GP
Original KB number:   952377

Introduction

If you have Receivables Management and Payables Management registered, you can have a customer who is also a vendor. If you owe a vendor and if the vendor also owes you as a customer, you can reduce the customer's outstanding credit balance.

For example, customer A buys item B from you. Customer A is also vendor A. You buy item C from vendor A. Customer A owes you 100 dollars for item B. Additionally, you owe vendor A 90 dollars for item C.

Instead of paying the vendor and accepting a payment from the customer, you can reduce the customer's outstanding credit balance by following these steps:

Steps to reduce the customer's outstanding credit balance

1. Create a credit memo for the Receivables Management invoice of the customer who is also a vendor by following these steps:
   1. Click Transactions, point to Sales, and then click Transaction Entry.
   2. In the Document Type list, click Credit Memo.
   3. In the Number field, keep the default document number.
   4. In the Customer ID field, enter the customer identifier (ID).
   5. In the Credit Amount field, enter the credit amount.

      Note

      The credit amount is the amount that you want to reduce from the amount that you owe the vendor.

   6. Note the CRMEMO account number that you use.
   7. Click Post.
2. Create a credit memo for the Payables Management invoice of the vendor who is also a customer by following these steps:
   1. Click Transactions, point to Purchasing, and then click Transaction Entry.
   2. In the Document Type list, click Credit Memo.
   3. In the Vendor ID field, enter the vendor ID.
   4. In the Document Number field, enter the document number.
   5. In the Credit Memos field, enter the credit memo amount.

      Note

      The credit memo amount is the credit amount that you posted in step 1.

   6. Click Distributions.
   7. Change the PURCH account number to the CRMEMO account number that you noted in step 1f.

      Note

      When the PURCH account number is updated, Microsoft Dynamics GP backs out the CRMEMO account number that is posted in Receivables Management.

   8. Click OK.
   9. Click Post.

Note

If you have Customer/Vendor Consolidations in Microsoft Dynamics GP registered, Microsoft Dynamics GP can process these steps automatically. Using Customer/Vendor Consolidations, you can consolidate balances in Payables and Receivables for a single company when you work with that company as both a Customer and a Vendor. You can assign relationships between existing Customers and Vendors and then apply open debit and credit documents against each other to consolidate the current balances.