Accounts Receivable and Payable Management: End-to-End Balance Sheet Analysis and Foreign Currency Settlements

Managing Accounts Receivable and Payable with Customers and Suppliers

A customer has collected the goods but will pay the remaining amount later. A supplier's invoice has only been partially paid. One supplier delivers goods in both Ukrainian hryvnias and foreign currency. After a product return, the outstanding balance changed unexpectedly. In all these situations, a business owner needs answers to a few simple questions: who owes whom, what caused the debt, which payments have already been made, and which currency should be used for settlement?

What Are Accounts Receivable and Accounts Payable?

Accounts receivable — money owed to your business. For example, a regular customer received goods with deferred payment terms but has not yet paid the full amount.

Accounts payable — money your business owes to others. A typical example is a store that has received goods from a supplier but has paid the supplier's invoice only partially or not at all.

In Torgsoft, these transactions are consolidated into a goods and cash balance: the software matches product transactions and payments with a specific business partner. The main tool for checking this information is Payment → Balance with Partners. Here you can view customers, suppliers, or business partners who act in both roles. 

In this article, an end-to-end balance analysis does not refer to a separate software feature. It describes a verification method: starting with the total outstanding balance and tracing it back to the specific invoice, payment, and product transaction that created it.

First, Check Who Owes Whom

Open Payment → Balance with Partners and select the relevant partnership type. To quickly identify outstanding balances that require attention, use the «My Debtors», «I Owe», and «Outstanding Debts» filters.

You can specify a reporting period separately. If no period is selected, Torgsoft displays transactions for the entire time the software has been used. For retail chains or businesses operating through several companies, additional filters are available by accounting center and company. 

For example, a business owner operates three stores. All three receive goods from the same supplier. To check the overall balance, view the supplier's account as a whole. If the question concerns a specific store, apply an accounting center filter.

Do not try to determine who owes whom based solely on whether an amount is positive or negative. The software already provides clear filters for different types of debt.

How to Find Out Where an Outstanding Balance Came From

The overall balance answers the question «how much?», but business owners often need to understand «why exactly this amount?».

Select a business partner in «Balance with Partners» and open the Settlement Card.

It shows transactions for the selected period, opening and closing balances, goods received, and payments. You can also see the accounting center, cash register, or bank account associated with each transaction. 

If you need more details, open Balance with Partners Breakdown.

This allows you to examine individual documents:

• the business partner's invoices;

• the value of goods;

• payment amounts;

• the remaining outstanding balance;

• currency;

• company;

• payments linked to an invoice;

• payments not linked to a specific invoice.

This is important when the total amount appears correct, but it is unclear which particular delivery or sale remains unpaid. The breakdown lets you move from the total balance to individual documents and see how the debt was calculated.

A common situation reported to technical support is that a payment to a supplier has been recorded, but the expected debt remains outstanding. In this case, you need to check not only whether the payment was made but also whether it is linked to the correct incoming invoice and whether the correct currency was selected. A payment that is not linked to an invoice may affect the overall balance while the specific invoice remains unpaid or partially paid.

How to Monitor Debts to Suppliers

For day-to-day management of accounts payable, use Warehouse → Incoming Invoice Register.

Here you can filter documents by:

• supplier;

• currency;

• company;

• payment due date;

• payment status — unpaid, partially paid, or paid;

• payment terms — prepayment, deferred payment, consignment, or payment upon delivery.  

For example, on Friday you need to determine which suppliers should be paid the following week. Instead of reviewing every supplier individually, open the register and use the «Pay By» field together with the payment status filter. This will give you a list of invoices that have not yet been fully settled.

You can make a payment directly against the relevant incoming invoice. Torgsoft automatically fills in its amount and currency. You then select the source of funds: the cash register, a bank account, or personal funds. 

After making the payment, return to Balance with Partners and check the result. This simple rule is particularly useful for partial payments or when one supplier has a large number of invoices.

If Goods Are Received on Consignment

In this case, receiving the goods does not necessarily mean that you must immediately pay the supplier the full amount. Settlement depends on the goods actually sold.

For this scenario, Torgsoft provides Analysis of Sales of Supplier Goods on Consignment. This tool helps identify the goods sold and the amount owed to the supplier in the selected currency. 

Therefore, you should not treat an ordinary unpaid invoice balance and settlement for goods received on consignment as the same process.

How to Monitor Customer Debts

For regular customers who are allowed to take goods and pay later, the Torgsoft documentation describes a separate workflow for VIP customers.

In Payment → Unpaid VIP Sales, you can see:

• the date by which the customer must pay;

• the amount already paid;

• the remaining amount due. 

From here, you can accept payment for a specific sale or process the return of unpaid goods.

If a payment is overdue, Torgsoft can flag the sale and display the date when the permitted payment period expired. This information is intended for monitoring, not automatic debt collection: the software cannot force a customer to pay and does not replace the store's procedures for dealing with debtors. 

The process is different for regular customers. According to the documentation, an ordinary unpaid sale is generally treated as a situation that may have occurred because of a technical failure, such as a power outage. Such a sale should be checked, paid for, or correctly deleted if the goods have already been processed again. This should not be used as a standard method of selling goods on credit. 

How to Work with a Supplier in Different Currencies

A typical situation is when goods are purchased in foreign currency but sold in Ukrainian hryvnias. Alternatively, the same supplier may deliver some goods in hryvnias and others in a foreign currency.

For suppliers, Torgsoft maintains settlements in the currencies in which the goods were received. This is why Balance with Partners includes a «Currency» filter. If a supplier works with you in both hryvnias and US dollars, for example, each currency balance must be checked separately. 

This is an important point. Debts in different currencies should not be treated as a single amount. UAH 50,000 and USD 700 are two separate obligations until you establish a conversion rule.

Such questions regularly arise in technical support: business owners ask which currency a debt is displayed in when deliveries are made in different currencies, how to settle foreign currency debt, or why an amount remains outstanding in another currency after payment. Therefore, whenever you encounter an unexplained difference, the first things to check are the invoice currency, payment currency, and currency filter in the balance.

Exchange Rate

An exchange rate is needed when goods are recorded in foreign currency, currencies are exchanged, or prices are calculated using exchange rates.

It is configured through Payment → Exchange Rate. The «Buy» and «Sell» values are specified from the business owner's perspective: the rates at which the business buys and sells foreign currency. 

If You Need to Pay a Supplier in Foreign Currency

For cash payments in foreign currency, you first need a cash register account in the corresponding currency. You can then purchase the currency through Payment → Financial Document → Currency Exchange and make the payment to the supplier.

After that, in Balance with Partners, select the relevant supplier and the exact currency in which the goods were delivered. Record the payment and refresh the balance again: the outstanding amount should decrease by the amount paid.

In this way, Torgsoft allows you to trace the entire sequence: goods received in foreign currency → foreign currency debt → movement of funds → supplier payment → updated outstanding balance.

However, the reviewed sources do not confirm the existence of a separate automatic «consolidated debt» feature that combines several currencies for one business partner into a single amount. For reliable monitoring, it is better to handle each currency separately.

What to Do with Opening Balances

If a store starts using Torgsoft with existing business records rather than from scratch, it may already have outstanding customer or supplier debts on the transition date.

You can enter an opening debt balance in the business partner's profile:

• «I Owe» or «Owed to Me»;

• amount;

• currency;

• company, if accounting is maintained for multiple companies. 

For example, when Torgsoft is first introduced, a store already owes a supplier UAH 30,000. If this amount is not recorded as an opening debt, subsequent goods receipts and payments will not provide a complete picture of the settlements.

Opening balances require particular attention if you operate through several Sole Proprietorships or companies. A debt can be linked to a specific company, so an error made during the initial setup may later appear as an incorrect balance.

Why Two Users May See Different Balances

Check the accounting center, company, and access permissions.

The documentation specifically notes that a user with restricted access may not be able to see certain accounting centers, while an opening debt is linked to the accounting center that was active when it was created. As a result, the owner and an employee with restricted permissions may see different totals.

Therefore, when reconciling debts, first make sure that you are comparing the same period, currency, company, and set of accounting centers.

If a Debt Remains After a Return

Do not adjust the amount at random.

First, open the Settlement Card, then the balance breakdown. Check:

1. the original invoice or sale;

2. the return document;

3. linked payments;

4. unlinked payments;

5. currency;

6. company.

Technical support receives requests involving exactly this situation: a customer purchased goods under an outgoing invoice, then returned them, but an outstanding balance remained in the settlement records. The correct approach is to review the sequence of documents and payments rather than create an arbitrary financial transaction simply to bring the balance to zero.

A Simple Step-by-Step Process for Monitoring Debts

If an outstanding balance raises questions, follow these steps:

1. Open Balance with Partners and determine who owes whom.

2. Check the period, currency, accounting center, and company.

3. Open the Settlement Card.

4. If you need to understand the reason behind a specific amount, open the Balance Breakdown and reconcile invoices with payments.

5. Pay suppliers against the correct invoice and in the correct currency.

6. After making a payment, processing a return, or correcting a document, refresh the balance and check the result again.