Understanding Netting Reports
When you do a large volume of business with another organization as both a customer and a supplier, you can net the receivable and payable transactions with that organization. When you net transactions, you calculate the net amount due from or due to another organization. This enables you and the other organization to mutually resolve open transactions with a single payment.
You can print netting reports that show whether the company owes or is owed money. These reports do not make adjustments to the account ledgers. Instead, the reports provide comparisons between accounts receivable and accounts payable amounts, and are useful in these situations:
The accounts receivable balance is a credit.
The accounts payable balance is a debit.
The customer or supplier has both accounts receivable and accounts payable balances.
You can use this information to net the receivable and payable balances for eligible organizations.