Single Offset

Single offset means you can offset one credit bill against multiple debit bills and vice-versa in the same currency. Let us understand this with the help of an example.

The following table lists the bills of a customer which are available for single offset:
Account Bill Due Date Bill Segment Contract Type Priority Bill Segment Amount Outstanding Bill Amount Hold Amount
A1 Bill 1 06-18-2018 BS1 10 -$100 -$100 -$20
Bill 2 06-12-2018 BS2 10 $30 $30 (This is because $20 is already paid.) $10
BS3 20 $20
Bill 3 06-22-2018 BS4 10 $30 $30 $10
Bill 4 06-28-2018 BS5 20 $30 $40 -
BS6 30 $10

The system enables you to offset these bills through a single offset request. While creating a single offset request, you can add the Bill 1 as the primary bill against which you can offset the debit bills - Bill 2, Bill 3, and Bill 4. Note that you can only add completed bills to an offset request. The system then calculates the total credit and debit bill amount which is available for offsetting, as shown below:

Sum of credit bills’ amount which is available for offsetting: 
(-$100-(-$20))= (-$100+$20)=-$80
Sum of debit bills’ amount which is available for offsetting: 
(($30-$10)+($30-$10)+($40))=$80

The system considers the credit or debit bills’ total whichever is less as the default offset amount. You can change the offset amount of a bill, if required. However, you need to ensure the following:

  • Offset amount of the selected bill is not equal to zero

  • Total debit offset amount is equal to total credit offset amount in the offset request

  • Negative offset amount is specified for the debit bill and positive offset amount is specified for the credit bill

  • Offset amount is less than or equal to the current outstanding amount of the bill

Note: If you add or remove a bill from the offset request after updating the offset amount, the system overrides the offset amount with the default offset amount. In such scenarios, you have to update the offset amount of the bills once again.

On submitting or approving a single offset request, the system creates the transfer or offset adjustments using the adjustment type which is specified in the offset request. If the Transfer Adjustment option is selected in the respective offset request type, the system creates the transfer adjustments in the Frozen status.

The following table lists the transfer adjustments that are created during the single offset with respect to the above example:
Transfer Transfer Adjustments
1

  • $20 transfer adjustment is created for Bill 1 and matched to -$100 bill segment cancellation (BS1) FT 1

  • -$20 transfer adjustment is created for Bill 2 and matched to $30 bill segment (BS2) FT 2
2

  • $20 transfer adjustment is created for Bill 1 and matched to -$100 bill segment cancellation (BS1) FT 1

  • -$20 transfer adjustment is created for Bill 3 and matched to $30 bill segment (BS4) FT 4
3

  • $30 transfer adjustment is created for Bill 1 and matched to -$100 bill segment cancellation (BS1) FT 1

  • -$30 transfer adjustment is created for Bill 4 and matched to $30 bill segment (BS5) FT 5
4

  • $10 transfer adjustment is created for Bill 1 and matched to -$100 bill segment cancellation (BS1) FT 1

  • -$10 transfer adjustment is created for Bill 4 and matched to $10 bill segment (BS6) FT 6

However, if the Transfer Adjustment option is not selected in the respective offset request type, the system creates the offset adjustments in the Frozen status. Considering the above example, the system will create the following offset adjustments for the offset request:

  • $80 offset adjustment is created for Bill 1 and matched to -$100 Bill Segment Cancellation (BS1) FT 1

  • -$20 offset adjustment is created for Bill 2 and matched to $30 bill segment (BS2) FT 2

  • -$20 offset adjustment is created for Bill 3 and matched to $30 bill segment (BS4) FT 4

  • -$30 offset adjustment is created for Bill 4 and matched to $30 bill segment (BS5) FT 5

  • -$10 offset adjustment is created for Bill 4 and matched to $10 bill segment (BS6) FT 6

Similarly, the transfer or offset adjustments are created when the bills are offset across accounts of the person and its hierarchy. The system distributes the amount from the credit bill starting with the oldest due date. For more information on how the offset amount is distributed, see C1-OFST-DIST.

You can create a single offset request through the Account Receivables Central and Offset Request screens. For more information on how to create a single offset request, see Creating an Offset Request.