D365 Finance and operation

Netting customer and vendor balances in Dynamics 365 Finance and Operations (D365 F&O) involves consolidating the amounts owed to and from customers and vendors to arrive at a net balance. This process is often used to simplify accounting and reduce the number of transactions processed.

If you want to do netting here some following process you need to use.

1.Identify Open Transactions
2.Calculate Net Balances
3.Adjust for Currency and Aging
4.Review and Reconcile
5.ocument and Maintain Records

You can now complete customer and vendor netting without creating manual journal entry in system,

This article provides an overview of the customer and vendor balance netting process in Microsoft Dynamics 365 Finance. It also explains how to set up the netting agreement, manually net customer and vendor balance.

Create bridging Account: Create bridging account before starting any setup for netting amount.

Setup New journal: Create for new journal for netting for journal type Customers and Vendor Netting

Create netting Agreement: Create new netting agreement to map customer and vendor against each other, because the vendor and customer are the same party. This approach minimizes the exchange of money between an organization and the customer or vendor party.

Netting Agreement helps to map to Bridging account.

Post creating initial setup, you can open netting workspace from cash and Management module, netting workspace.

You can see all customer and vendor pairs will be display.

Netting workspace will display customer and vendor transaction with open balance <> 0.

You can select Free text invoice line manually to settle against with vendor open transaction.

Using this workspace, you can mark open vendor transaction against open customer invoice. Once you are done with Marking customer and vendor open transactions. You can post that using standard post button.

After successfully posting you can print netting.

Print for Netting

Reverse netting

You can reverse posted netting transactions by selecting Reverse netting on the Netting history page. This function automatically unsettles the selected customer invoices, unsettles the selected vendor invoices, and reverses the posted netting journal.

Go to Cash and bank management > Netting > Customer and vendor balances netting.
Select Netting history.
Select the netting transaction, and then select Reverse netting.

You can see all reversed Transactions with status Reversed.