Lettering
Lettering associates with one another the lines of the same third-party account — typically an invoice (debit 401 or credit 411) and its payment. This is what makes it possible to know the real balance of each third party and to know, invoice by invoice, what is paid and what remains due.
It takes place after posting, as soon as an invoice, a credit note, a payment or a shareholder current account needs to be cleared. It also plays a tax role: it is what makes VAT on payments due at the right moment. When you validate, you make a call on the associated lines, whether the lettering is complete or partial, and any differences.
The accounts concerned
Lettering applies mainly to third-party accounts: 401 (suppliers, invoices ↔ payments), 411 (customers, invoices ↔ collections) and 455 (shareholder current account).
Lettering by hand
The agent selects the lines to associate, and Simon checks that they respect four rules: same account (on the first three characters), same financial year, lines not already lettered (except partial lettering), and a debit − credit sum of zero (except authorized partial lettering).
Partial lettering
When the balance is not exactly zero but stays within a threshold (€1 by default), Simon allows partial lettering: the group is marked as partial and keeps track of the residual difference, without blocking the work. The group can be completed or adjusted later.
Automatic lettering
Simon can also propose groups on its own, according to four complementary algorithms:
| Approach | Method | Use case |
|---|---|---|
| Zero balance | Combinations of 2 to 6 lines whose sum is zero | Universal (default) |
| Identical amounts | Pairs debits and credits of the same amount | Simple payments |
| Document reference | Groups lines sharing the same reference | FEC import |
| Label | Groups lines with the identical label | Invoices/credit notes |
The agent can then apply the suggestions in batch.
Furthermore, at posting, as soon as an entry touches a third-party account (4xx) with an identified third party, Simon immediately attempts a lettering: it looks, among the unlettered lines of the same account/third party/financial year, for a combination summing to zero (up to six lines).
The lettering codes
Each group receives a unique letter per (account, financial year) pair, following the sequence A, B, C… Z, then AA, AB… Whether the lettering is complete or partial is not carried by the letter’s case — it is tracked separately, by an indicator specific to the group.
VAT on payments
For companies under the VAT-on-payments regime (service providers), VAT is only due at payment, not at invoicing. Lettering is precisely the event that materializes this payment — so it is what makes the VAT due.
The mechanism rests entirely on the tax metadata, with no additional journal entry. When an invoice is posted, its VAT lines (44566 / 44571) are marked as relating to VAT on payments and excluded from the CA3/CA12 calculation as long as the invoice is not lettered. At lettering (invoice ↔ payment), this marking flips: the VAT becomes due and appears on the CA3.
flowchart LR A["Invoice issued<br/>VAT flagged, off CA3"] -->|Lettering = payment| B["VAT due<br/>visible on CA3"]Partial payment
If the invoice is only partly settled (down payment, schedule), the VAT made due is proportional to the payment:
VAT due = total VAT × (amount settled / gross amount of the invoice).