Clearing Documents

What is a Clearing Document?

A Clearing Document is a bookkeeping tool that offsets items against each other. No money moves and the customer's overall balance does not change. It links something the customer owes (an outstanding invoice or a refund) to a credit (a credit/negative invoice, an unapplied payment or a house credit) so the two cancel out on the books.

It is not a payment, a bank reconciliation or a refund. Nothing is sent to the GL or the ERP (for example NetSuite or QuickBooks) as money. Its only job is to keep invoice and payment balances tidy, linked and auditable.

Typical uses

• Close a credit memo against an outstanding invoice.

• Apply a floating (unapplied) payment or house credit to a specific invoice, instead of waiting for automatic application.

• "Self-clear" a credit (negative) invoice that has nothing to offset yet, turning it into a reusable floating house credit.

• Settle a refund directly against existing floating credit, with no invoice involved.

The feature is only available for customers set up for dynamic payment application. If the organisation is not configured that way, the Clearing Document screen does not appear.

Where to find it

On Customer Details, open the Apply Credit (House Credit) dropdown and choose Clearing Document.

The screen lists four groups of items for the customer:

• Debit Invoices – outstanding invoices with a balance owed.

• Credit Invoices – negative or credit invoices.

• Open Debit Payments – refunds or negative credits; payments that themselves owe money.

• Floating Payments – unapplied payments or house credits that can be used as a credit source.

The system can also create a Clearing Document on its own during a NetSuite or QuickBooks sync, to mirror records the ERP has already applied against each other (a "journal charge"). This also moves no balance; it only links records that are already correct.

Statuses

• Paid – the document is active and in force. The label does not mean cash was received.

• Voided – the document has been reversed.

An active document is also shown as reversible or not reversible. It becomes not reversible once the floating house credit it created has been spent elsewhere. The Reverse button is then disabled, with a tooltip explaining why.

How to create one

1. Select items. Tick the invoices, payments or credits to offset. Each item is always taken for its full current balance; there is no field for a partial amount. The screen shows a running Debit total, Credit total and Difference so you can see whether the selection balances.

2. Clear Selection (optional) unticks everything so you can start again.

3. Review. Enabled when the selection is Balanced (debits equal credits), Self-clearing (only credit/negative invoices, no debit) or Partial (debits and credits that do not match; the remainder is handled automatically).

4. Confirm screen. Shows exactly what will happen: which invoices close, which credits are used and any new house credit that will be created. It is produced by the same logic that posts the document, so what you see is what you get.

5. Confirm and Post. Writes the document. Every invoice and payment link it touches is stamped with the same Clearing Document ID and shows "Cleared by #ID", so the group can be traced and reversed together.

What happens automatically

• Self-clearing: credit/negative invoices close to zero and a floating house credit of the same amount is created for later use. If credits are greater than debits, the surplus becomes that house credit.

• If debits are greater than credits, the shortfall stays outstanding on the oldest unfunded debit. Nothing is forced.

• A refund or negative credit can be offset directly against a floating payment or house credit, with no invoice involved.

Guardrails

• Every line uses the item's full balance. No partial amounts.

• A floating payment or credit can never be cleared on its own. It always needs a debit to apply to.

• A payment already linked to an active clearing cannot be used in another one.

How to reverse one

Open the Clearing Document's detail screen and click Reverse Clearing Document (shown only when the status is Paid and the document is still reversible), enter a note explaining why, and confirm.

• Every invoice and payment goes back to its pre-clearing balance. The original links are kept as reallocated for history, and any house credit the document created is voided.

• The status changes to Voided.

• Reversal is all-or-nothing. The whole document is reversed as a group; single lines cannot be reversed. The customer balance stays unchanged.

A document cannot be reversed if the house credit it released has already been spent elsewhere. The Reverse button is disabled, with a tooltip explaining why.

Note: if you reverse the underlying payment from its own detail page while it is part of an active Clearing Document, the system takes you to this group reversal instead of reversing the payment alone.

Who can use this

Only these roles can create, view or reverse Clearing Documents:

       System Superuser   |   System Support   |   Admin   |   Supervisor

Sales Agents can see the Apply Credit button on Customer Details, but not the Clearing Document option.

Worked examples with screenshots

Example A – Credits greater than debits

Several outstanding invoices are ticked together with negative invoices, payments and a credit whose total is higher than the debits. The invoices close in full and the extra credit is carried forward as a floating house credit for later use.

Screenshots below, in this order:

1. Before clearing – the customer's invoices, payments and credits before anything is done.

2. Clearing screen – the ticked items, the Debit and Credit totals, and the message that the extra credit will remain available.

3. Confirm screen – what will close and what will be spent.

4. After clearing – the invoices now closed.

5. Clearing Document detail screen – the posted document and its lines.

6. Carry-forward amount – the surplus held as a floating house credit.

Example B – Debits greater than credits

The ticked invoices are worth more than the ticked credits. The credit is applied oldest-invoice-first and whatever cannot be covered simply stays outstanding on the last invoice; nothing is forced.

Screenshots below, in this order:

1. Before clearing – the starting balances.

2. Clearing screen – the ticked items with debits higher than credits.

3. Confirm screen – which invoices will close and which will stay partly open.

4. After clearing – closed invoices and the one that still has a balance.

5. Clearing Document detail screen – the posted document.

6. Outstanding balance after clearing – the remaining amount still owed.

Example C – Multiple negative invoices (self-clearing)

Only negative invoices are ticked, with no debit. They close to zero and their combined value becomes a floating house credit that can be applied to future invoices.

Screenshots below, in this order:

1. Before clearing – the negative invoices on the account.

2. Clearing screen – only negative invoices ticked.

3. Confirm screen – the house credit that will be created.

4. After clearing – the negative invoices closed.

5. Clearing Document detail screen – the posted document.

6. Carry-forward amount – the new floating house credit.

FAQ and things to watch for

• Does this move real money? No. A Clearing Document never moves cash and is never exported to the GL or NetSuite as a financial transaction. It only re-links existing balances.

• Why can't I enter a partial amount? Every line clears the item's full current balance by design, to keep the netting clear and auditable. Leftover credit or debit is handled automatically after you post.

• Can I undo just one line? No. Reversal is all-or-nothing for the whole document.

• Why is the Reverse button disabled? The house credit this document released has already been spent elsewhere. Reversing it would leave that spend pointing at nothing, so it is blocked.

• Where do I see the history on an invoice or payment? Look for "Cleared by #ID" on the invoice or payment and open that Clearing Document's detail screen for the full breakdown, including any reversed (reallocated) lines.

• I don't see the Clearing Document option at all. Either your role does not have access (see Who can use this), or the customer's organisation is not set up for dynamic payment application.