Functionality of offsetting receivables and payables of suppliers and buyers in Microsoft Dynamics 365 Business Central

In the course of doing business, it often happens that the customer/buyer is also our supplier. To simplify billing and avoid unnecessary payments, Microsoft Dynamics 365 Business Central offers a balance consolidation feature.

In practice, this means comparing the amounts owed and payable to a given company, and then offsetting them so that only the difference remains to be paid. The purpose of balance consolidation is to simplify financial processes, reduce the number of transactions and reduce operating costs, such as bank or administrative fees.

What does it look like in practice?

Let's assume that a supplier with a file number of 3000 and a buyer with the same number are actually one contractor, and we want to be a modern company focused on optimizing our processes. Therefore, we are betting on a new facility that will reduce the number of transactions on our part.

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To start the consolidation process, Business Central needs to link the supplier's account to the corresponding buyer's account. This will allow the system to compare the balances of both parties.

1. go to the buyer file 3000 - Graphic Design Institute, then from the ribbon select contact

2. then select Related -> Contact -> Company -> Types of cooperation

3. if there are types of cooperation - remove them.

4. in the same way as before, enter the file, this time supplier 3000, and then from the ribbon select Contact.

5 Actions -> Functions -> Link to existing -> Acquirer

6 Indicate the number of Purchaser 3000. From now on, the two files are connected by a relationship.

7 Let's compare the supplier/buyer files, where purchase and sales invoices have been posted before. On both files, we have the field Balance as supplier/buyer.

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Supplier file:

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Buyer file:

8. The moment has come to settle with the contractor, so let's go from the magnifying glass to the page Payment logs. Then select from the ribbon Prepare -> Settlement of mutual buyer/supplier balances.

9. Complete the fields Document number and Supplier No.. Confirm with the button OK.

10. The payment journal lines have been automatically completed. Complete the other required fields you need to post the journal.

11.When all the required fields are completed, you can post the payment journal lines.

12. if you, like me, are prompted for a missing dimension set, click Add a set of dimensions on the right in the column Recommended action.

13 Return to page Payment logs and post the lines again.

14 - We got it! The lines have been posted. Go to the buyer's file to see what has changed.

The Balance (PLN) has zeroed out, and the Balance (PLN) as a supplier has decreased by the amount that previously appeared as a balance. Below is a summary of the values of the fields before and after the receivables/payables offset.

And that's it for today's post. Offsetting receivables/payables in Business Central is just a few clicks that will save you time and money!

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