Currently, the local finance records entire payment to their supplier in account payable at a lump sum amount which has net off with list of debit memos and credit memo. Thus, the debit memo and credit memo are not accounted in the accounting book at all,

I understand that this made the book or financial statement not transparent , but I am not sure if this an acceptable practise ?
Could anyone you please shed me some light about me what is other financial impact ?

I want to make sure we are talking about the same thing. I usually see memo entries for corrections or items returned. If this is what you are referring to, they do need to be recorded or you are understating or overstating your accounts payable and costs.

Please explain further if you have a different meaning. Thanks.