Clearing with Customers and Vendors

Question

How does this master data attribute work exactly?  To really simply does that mean that if Company A bills Company B for $100 purchase and Company B bills Company A for a different $100 purchase then during payment and cash receipts the two won't actually end up exchanging cash?  Or will they both send invoices of $100 to each other?  When and where would this attribute be used typically?

Answer 1

The clearing between the customer and vendor can happen by following the below settings
1. The customer number must be entered in the corresponding vendor master record
a. FK02->General Data -> Control
In the u2018Account controlu2019 tab, in the u2018Customeru2019 field, enter the customer number
b.In the Company Code Data u2013> Payment Transaction Accounting, select the checkbox - u2018Clrg with Custu2019
note:If you do not fill u2018Customeru2019 field ,the u2018Clrg with Custu2019 field can not display.
2. The vendor number must be entered in the corresponding customer master record
a. FD02->General Data -> Control
In the u2018Account controlu2019 tab, in the u2018Venderu2019 field, enter the vendor number
b. In the Company Code Data u2013> Payment Transaction Accounting, select the checkbox - u2018Clearing with vendoru2019
3. For testing, create a vendor invoice through FB60 and customer invoice through FB70. Note that customer and vendor are properly selected.
4. To see the vendor/customer balance both together use FBL1N/FBL5N, when you execute FBL1N select customer check box, when you execute FBL5N select vendor check box along with open item/cleared item check box
5. For clearing the open items. Use the TCode F-32. On clicking the u2018Process open Itemsu2019, the vendor invoice (KR) and customer invoice (DR) are shown automatically. It will generate the FI document with proper entry.
Note: Partial / Residual payment between customer and vendor is also possible