# AR-AP Adjustmen

### **Module Guide: AR/AP Adjustment**

#### **Module Location**

#### Finance > AR/AP Adjustment

#### **Module Objective**

#### The **AR/AP Adjustment** module is a special accounting tool used to perform a "netting" process. Netting is the process of offsetting an Accounts Receivable (AR) balance with an Accounts Payable (AP) balance for the same entity, which acts as both a customer and a supplier.

### **1. Main View (Adjustment List)**

#### The main page of this module displays a list of all AR/AP Adjustment documents that have been created.

![image.png](https://manual.kokola.co/uploads/images/gallery/2025-09/scaled-1680-/N7Zimage.png)

#### **View Explanation & Filters**

#### This page is for viewing the history of adjustment/netting transactions that have been performed.

- #### **Filters**: You can search for a specific document by **Document Number** or a date range (**Start Date / End Date**).
- #### **Adjustment List**: The table below will display all documents that match the filters, with columns such as **Document Number**, **Document Date**, and **Document Status**.

#### **Button Functions**

- #### **\[New\]**: The primary button to create a new AR/AP Adjustment document.
- #### **\[Cancel\]**: To cancel an adjustment document that has already been created.

### **2. Steps to Perform an Adjustment (Netting)**

**![image.png](https://manual.kokola.co/uploads/images/gallery/2025-09/scaled-1680-/24Oimage.png)**

#### **Step 1: Create a New Adjustment Document**

#### From the Main View, click the **\[New\]** button to open the **AR/AP Adjustment** form.

#### **Step 2: Fill in Header Information**

- #### **Type**: Select the type of adjustment, for example, **Netting**.
- #### **Category**: Select whether you will perform netting for a specific **Customer / Supplier** or a **Group**.
- #### **Customer / Supplier Group**: Select the entity to be netted.
- #### **Transaction Date**: Enter the effective date of this adjustment transaction.

#### **Step 3: Select Receivable (AR) Documents**

#### In the **AR** section, select one or more outstanding sales invoices from that customer that you want to use to reduce the payable.

#### **Step 4: Select Payable (AP) Documents**

#### In the **AP** section, select one or more outstanding purchase invoices from that supplier that you want to reduce with the receivable above.

#### **Step 5: Save and Confirm**

#### After selecting all the relevant documents, the system will calculate the totals. Verify the amounts, then click the **\[Confirm\]** button to process the adjustment. This action will create a journal entry that **debits Accounts Payable (AP)** and **credits Accounts Receivable (AR)**.

### **Tips & Important Notes**

- #### This is an **advanced accounting tool** and must be used with a proper understanding. Always ensure a valid netting agreement exists with the customer/supplier.
- #### After confirmation, this transaction will effectively **"settle"** part or all of the selected receivable and payable balances.
- #### This is an efficient way to settle transactions with business partners who have a **two-way relationship** (as both a buyer and a seller).