Compensations in the Finances module
Another method of completing documents is compensation. It is possible to compensate with each other e.g. two cash or bank transactions or two planned payments registered in the payments list, providing that the flow of financial resources on documents being compensated is opposite.
The examples below illustrate simply the essence of compensation.
Example 1
There are two payments registered in the list of deposited payments. The first payment is a planned payment for a sales invoice amounting to 1230 USD. Because the customer returned the purchased item – the second payment is a planned repayment of 1230 USD. Both events can be compensated with each other before the financial resources are actually transferred (e.g. before the bank transfers are cashed)
Deposited payments
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Example 2
One of the customers is a vendor and a recipient at the same time. A company purchases some items from that customer which is confirmed with the invoice PI/002/2007 amounting to 5420 USD. PI with deferred payment generates a planned payment in the list of withdrawn payments. Then the same customer purchases some items in the next two days from that company which is confirmed with two sales invoices with deferred payments amounting to 1500 USD and 1320 USD.
Withdrawn payments
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Deposited payments
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By compensating the three payments, the remaining unpaid amount in the purchase invoice will be 2600 USD. The sales invoices will be paid entirely. Thus, the only financial transaction which needs to be cashed in reference to these three documents is to transfer the rest of the amount (2600 USD) into the customer’s bank account.
Just like the completion operations, compensations can be made in the Finances tab from the level of:
1) List of cash/bank transactions
2) List of receivables/payables
3) Customer and vendor payments