View model here for a demonstration of the cladding material (vertical) offset parameter.
https://3dwarehouse.sketchup.com/model/786a28ec-3fb7-43eb-80dc-7489624b46c8/Multi-Story-Construction?tab=general
Note that in this model I've adjusted the offset for both top and bottom walls. I first adjusted the bottom wall cladding so that the first run of siding started at the bottom of the wall as it should. I then adjusted the wall above it to match to the bottom wall. I also turned on the option in the general tab of the global settings which hides the cladding edges, so the two walls appear to blend together.
https://3dwarehouse.sketchup.com/model/786a28ec-3fb7-43eb-80dc-7489624b46c8/Multi-Story-Construction?tab=general
Note that in this model I've adjusted the offset for both top and bottom walls. I first adjusted the bottom wall cladding so that the first run of siding started at the bottom of the wall as it should. I then adjusted the wall above it to match to the bottom wall. I also turned on the option in the general tab of the global settings which hides the cladding edges, so the two walls appear to blend together.