Adjusting A/R Invoices and Credits

I posted an A/R invoice and there is a problem with it; how do I get rid of it or make a correction?

If you need to remove an A/R invoice you can reverse the invoice or issue a credit. An adjustment can be made to an invoice by entering the same invoice number and customer ID in a new invoice session.

How do I reverse a single invoice?

It depends on how that invoice was entered into the system. There are two transaction sources for A/R invoices:

  • Invoices that were entered manually (no invoice was printed from the system) using Transactions>Accounts Receivable>Enter A/R Invoices (transaction source = ARB), and
  • Invoices that were generated by the system using Activities>Accounts Receivable (transaction source = ARS).

Complete the following steps to reverse a single invoice:

  1. Select Transactions>Accounts Receivable>Enter A/R Invoices.
  2. Enter the session information, and then click the Start button. This is a new session that will contain the invoice reversal, so you will want to label it accordingly.
  3. For ARB documents:
    • Click Reverse Posted Document on the transaction entry form.
    • Select the original Session ID and Document Number that you want to reverse on the Reverse Posted Document form.
    • For the Reversed Document number, leave it the same as the original document number. Usually you leave the dates the same as well. Update the description to indicate it is a reversal or correction.
    • Review the reversal. When satisfied that it is correct, click OK and then click Save or Post.
  4. For ARS documents:
    • Use the same Invoice Number and Customer ID to make an adjustment to the invoice on the transaction entry form.
    • Manually enter the reversal (document amount will be negative and the credit will be to the A/R account), and then click Save or Post.
  5. An alternative method available to reverse a single ARS document is to:
    1. Reverse the entire ARS session containing the invoice that you want to reverse.
    2. Before posting this reverse session, open it using Transactions>Accounts Receivable>Edit A/R Invoices. Delete out of the session, all of the documents that you do not want to reverse.
    3. Post the session (Activities>Manage Sessions>Post Transactions).
How do I copy a single invoice?

It depends on how that invoice was entered into the system. There are two transaction sources for A/R invoices:

  • Invoices that were entered manually (no invoice was printed from the system) using Transactions>Accounts Receivable>Enter A/R Invoices (transaction source = ARB), and
  • Invoices that were generated by the system using Activities>Accounts Receivable (transaction source = ARS).

For manually entered A/R invoices (ARB) do the following:

  1. Select Transactions>Accounts Receivables>Enter A/R Invoices.
  2. Enter the session information, and then click the Start button. This is a new session that will contain the copy of the invoice, so you will want to label it accordingly.
  3. Click Copy Posted Document on the transaction entry form.
  4. Select the original Session ID and Document Number that you want to copy on the Copy Posted Document form.
  5. For the Copied Document Number, leave it the same as the original document number only if you want to adjust the original invoice.
  6. Review the copied invoice. When satisfied that it is correct, click OK and then click Save or Post.

For system generated A/R invoices (ARS) do the following:

  • Since, there is no option available to copy a single ARS document, you must copy the entire ARS session containing the invoice that you want to copy.
  • Before posting this copy session, open it using Transactions>Accounts Receivable>Edit A/R Invoices. Delete out of the session, all of the documents that you do not want to copy.
  • Post the session (Activities>Manage Sessions>Post Transactions).
How do I reverse an entire A/R invoice session at once?

You must first determine how the session was entered into the system.

  1. There are two transaction sources for A/R sessions:
    • Invoices that were entered manually (no invoice was printed from the system) using Transactions>Accounts Receivables>Enter A/R Invoices (transaction source = ARB), and
    • Invoices that were generated by the system using Activities>Accounts Receivable (transaction source = ARS).
  2. Select the Activities>Manage Sessions>Reverse Posted Sessions form. You will then specify the transaction type as ARB or ARS based on your determination in step 1 and indicate which session you want to reverse.
  3. Enter a new Session ID for the reversal and specify whether you want to use the original document and effective dates.
  4. Update the description and Save. A Batch-To Post session is created, which can be reviewed or edited using Transactions>Accounts Receivables>Enter A/R Invoices (for ARB sessions) or Transactions>Accounts Receivable>Edit A/R Invoices (for ARS sessions). Post when satisfied it is correct.
I entered an invoice; there was something wrong with it, so I entered a negative invoice to get rid of it. Now I have a positive and a negative invoice to be paid. What happened, and how do I correct it?

Accounts Receivable organizes records by Invoice number. If you enter a negative invoice and the number is not EXACTLY the same, you will create a new (negative) invoice. To correct the problem you need to find the exact numbers of both invoices and then reverse them or issue a credit against them.

I want to issue a credit to a customer, but there are no unpaid invoices for that customer against which to apply it. How do I enter it into the system?

Enter it as a negative invoice with the appropriate description to denote it is a credit using the Transactions>Accounts Receivables>Enter A/R invoices form.

Can I issue a credit against a negative invoice?

Yes, the feature of a credit is that it will reduce the A/R portion of an invoice, regardless of the balance. It is up to you to enter the opposite balance in the proper account (usually your revenue account). However, if the invoice was negative, your document amount for the credit will also be negative.

How do I write off an invoice?

Use a credit (Transactions>Accounts Receivable>Enter A/R Credits).

My Auditor gave me an amount to adjust my A/R account by. However, the system will not let me make journal vouchers to my A/R account. How do I enter the adjustment?

This adjustment must be broken down and made against one or more existing invoices. You can use a credit to make the adjustments (Transactions>Accounts Receivables>Enter A/R Credits) or adjust the invoices directly by using the same invoice number and Customer ID (Transactions>Enter A/R Invoices).

Rather than adjusting invoices, can I just enter a new invoice to make the Auditor's adjustment?

No, while this would make your A/R account in your General Ledger have the desired balance, the adjusting invoice will remain outstanding and waiting to be paid. If it ever were paid, then your balances would be incorrect. Additionally, you will want your A/R subledger to reflect correct balances for each customer. Any adjustments that must be made need to update the appropriate customer balances.

What if I do not have the invoice numbers or amounts for the adjustment given by the auditor? Is there another way to do it?

Adjustments to the A/R accounts must be made to the individual customer balances. Thus, they must be entered through an Accounts Receivable transaction, such as, an invoice adjustment or a credit. There is not an alternative.

I have an A/R invoice that has had a lot of activity (reversals, receipts), and it is showing up as outstanding (with a positive or negative amount). What do I do without making it worse?

Run a Detailed A/R Ledger using the Reports>Accounts Receivable>Detail A/R Ledger report.

  1. Select <DetailAR-This Year-L>.
  2. Modify the report.
    • Setup Tab - Verify that the dates encompass the year effected.
    • Content Tab - Add Session ID and Transaction Source to the Report Body.
    • Filter Tab - Filter for one customer with the problem.
    • Options Tab - Deselect Summarize Amounts.
    • Enter "Research AR" as the Report Title on the Setup Tab.
  3. Print the Report.
  4. Locate the invoice with the incorrect balance.
    • If it has an opening balance, expand the date items on the Setup tab and reprint.
    • Review the charges and payments to determine the source of the error. The Transaction Source column should be used to determine how the error occurred.

    5. Code

    Transaction Source

    ARB

    A/R Invoices (Transactions>Accounts Receivable>Enter A/R Invoices)

    ARM

    A/R Credits (Transactions>Accounts Receivable>Enter A/R Credits)
    ARP A/R Prepayments (Transactions>Accounts Receivable>Enter A/R Receipts)

    ARC

    A/R Payments Received (Transactions>Accounts Receivable>Enter A/R Receipts)

    ARS

    A/R System Generated Invoices

    (Activities>Accounts Receivable>Create Transactions)

    ARV

    A/R Void Invoices (Activities>Accounts Receivable>Void Invoices)

    By locating the source of the error, you can proceed to correcting the problem whether it is by reversing an incorrect invoice or correcting a receipt.