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Module:Business Partner Settlements



This module provides a new document where it is possible to settle debts or credit of business partners that are both customers and providers. When a Business Partner is a Customer and a Provider it is possible to have credit as both types. But it is not possible to consume a customer credit in a Payment Out document. In the same way it is not possible to mix purchase or sales invoices on a single payment document. In some scenarios when a business partner has sales and purchase invoices it is desirable to cancel both debts not needing a financial transaction.

In this document you have to select the invoices or credit amount that it is desired to settle. When the document is processed a Payment In and a Payment Out are created. Both have a total amount of zero so no financial transaction is created. The amount settled on each payment is compensated by a GL Item line. Both payments use the same GL Item so the balance of it after the process is zero.


It is not required any specific configuration to work on with this module. It is expected that business partners are already completely defined as Customers and Vendors with their corresponding Financial Accounts and Currency.

It is also required to have at least one GL Item defined for the Organizations where these settlements are needed.

Business Partner Settlement

In this window are registered all the settlements. On new you have to select:

Depending on the settlement type selected process button on the top and child tabs below change accordingly to show either the credit payments or the invoices to be settled.

"Credit Settlement" type:


"Invoice Settlement" type:


Credit settlement

On credit settlements you have to select the credit payments that are required to be settled.

Clicking on Add Credit Payments button a popup is opened where you can select from 2 grids the Credit In and the Credit Out payments.

In the Totals section, total amounts of the selected credit payments are calculated. You cannot close and add the credit payments until the total amounts of each grid are the same.

Above means that Credit In Amount and Credit Out Amount should be the same, therefore Credit Payment is 0.00


Invoice settlement

As in credit settlements by clicking on Add Not Paid Invoicess a popup is opened with 2 grids. The grids in this case show not paid invoices.

Once more, it is not possible to create settlement payments until "Pending Amount" is 0.00, as shown in the image below:

Process settlement

Depending on the status of the Settlement different actions are available:

In this status it is only possible to Process the settlement.
In this status it is possible to Cancel or Reactivate the settlement.
In this status it is not possible to perform any action.


When the settlement is processed a Payment In and a Payment Out are created. Each payment includes all the credit payments or invoices that were selected on the settlement.
See images below in the case of settlement payments related to invoices.

Payment In


Payment Out


The generated payments are set on the Business Partner Settlement header.

The invoices are inserted as Payment Lines while the credit payments are added to the payment as Used Credit.

As the total amount of the settlement payment must be zero an additional payment line is added using the selected GL Item.

The amount on the lines related to the GL Item is the same on both payments, therefore the net effect on the GL item balance is null. In other words the balance of the GL Item is not altered by the settlement process.

Settlement Payment In posting:
2722.50 GL Item ledger account (55500) DEBIT
2722.50 Account Receivables (43000) CREDIT

Settlement Payment Out posting:
2722.50 Account Payables (40000) DEBIT
2722.50 GL Item ledger account (55500) CREDIT

Finally, as the Settlement Payment amount is zero no "Transaction" is created on the Financial Account of the payment, therefore it will not be required to include it in any Reconciliation.


When a Settlement is reactivated the generated payments are cancelled creating a Reverse Payment. This process will restore the debt or credit so it is again available and the invoices are again not paid. The generated payments are removed from the header but the selection of credit or invoices is kept so it is possible to add new items, remove some items and/or edit the settled amounts.

The settlement is left in Draft status so it is possible to process it again when needed.


As in the Reactivate process the settlement payments are cancelled by creating a Reverse Payment and the settled credit or invoices are again available or not paid. But in this case these payments are not removed from the settlement header and the status is changed to Cancelled. In this status it is not possible to modify the settlement any more.

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