If you empty this processing option, the system defaults to the value in the customer table by division (F03012) for AR compensation or the value indicated in the vendor database table (F0401) for AP compensation. Demarcated assets or liabilities resulting from the sale of goods and services should be recognised at all times for gross tax purposes, whether the transactions are actually settled by netting or by net cash flow statement. Therefore, income tax, withholding tax and value added/percentage tax are calculated on the basis of gross amounts. I`ll use this example: your customer buys $500 worth of services, but sells you products worth $300, so you want to deduct the $300 you owe them with the $500 and only pay them $200. One of the ways to do this is to create two additional accounts – AP with NETTING and AR with NETTING. Then, the AR and AP accounts of the partners with whom you have a clearing agreement are assigned to the same account. Do it based on what that partner does most of the time. If they buy from you most of the time – their AR and AP accounts would both be put on AR with NETTING. If they sell to you most of the time, their AR and AP accounts will both be put on AP with NETTING. You need to bypass the business rules that prevent you from choosing a credit account for AR and a deposit account for AP. To do this, import the new accounts instead of editing them through the user interface. If your business has both liabilities and receivables on and on the same entity, both Quickbooks accounts should be properly billed and billed.