Issues with common party in erpnext i faced

1

Identified Issues

  1. Separate Journal Entries Instead of a Single GL Entry
    The system creates separate journal entries instead of posting a single GL entry that reflects the movement between the supplier and the customer (and vice versa) for a common party.

  2. Journal Entry Is Not Linked to the Invoice
    When a journal entry is created, it is not linked to the original invoice. As a result, any modification made to the invoice does not update the related journal entry.

  3. No Reversal Entry on Returns
    When a return (Sales Return or Purchase Return) is created, the system does not generate a proper reversal GL entry corresponding to the original transaction.

  4. Payments Do Not Reverse Customer GL Entries
    Upon payment, the system does not create a reversing GL entry against the customer account, leading to inaccurate balances for common parties.

  5. GL Statement Displays Journal Entry Numbers Instead of Invoice Numbers
    In the General Ledger statement, the system displays the journal entry reference number rather than the actual invoice number, which makes reconciliation and auditing difficult.

  6. We propose introducing a configurable option at the invoice level that allows an invoice to be:

    • Reconciled against the supplier account, or

    • Paid directly using the same customer account,
      when the customer and supplier belong to the same common party.

Proposed Solution

  • Append GL Entries using the same e-Invoice number as the source document.

  • Ensure that all GL postings:

    • Are linked directly to the originating invoice

    • Share the same reference (Invoice Number)

  • Automatically reverse GL entries:

    • From Supplier Account to Customer Account (and vice versa)

    • During returns

    • During payments

  • Ensure that:

    • Any change in the invoice is reflected automatically in the related GL entries

    • The GL statement shows the real invoice number, not the journal entry number

This approach will ensure:

  • Accurate Common Party accounting

  • Proper traceability between invoices and GL entries

  • Correct reversals for returns and payments

  • Clean and auditable General Ledger reports