Accounts Receivable: Credit Entries and Voided Checks

Reversing Open Invoices

Creating reversing entries in Accounts Receivable is very similar to the process described for Accounts Payable. Invoices may be reversed by entering a credit invoice with negative dollar amounts. Once a reversing invoice has been entered and posted, it will show up on the A/R Aging report as a negative entry. The totals for the customer will reflect the negative entry. To remove the entry from the aging list, reconcile the errant invoice and the credit invoice against one another.

To reconcile the two invoices, go to Receipts Entry and create a new receipt. When the system asks for an amount received, enter an amount of 0.00 in the field. Now continue on until invoices appear in the Reconciliation section of the screen. Both the positive and the negative invoices are listed. In the payment data column, indicate full receipt of both the positive and the negative invoices. This will offset and fully reconcile the 0.00 receipt and then it will be possible to save, proof list, backup and post this receipt. Both invoices will be marked as reconciled and will be removed from the aging list.

Entering True Customer Credits

There are situations where a certain dollar amount will be owed to the customer. In this instance, a credit invoice for any dollar amount may be entered, proof listed, backed up and posted. The credit invoice will appear on the aging list as a negative amount. When it comes time to enter money received from the customer, input the Amount Received as the actual check amount and reconcile the receipt to both a regular invoice and a credit invoice.

For example: if an invoice for $2,500.00 has been posted and a credit invoice for -$400.00 has been posted for payment, a check for $2,100.00 might be printed. In receipts entry, enter $2,100.00 in the Amount Received field then use the payment data column to reconcile both invoices in full. Once the receipt has been proof listed and posted, both invoices will disappear from the aging list.

Entering Credit Receipts

Money may be received from a customer where there is no invoice to which to apply the money. This may be a customer deposit or a payment for an invoice that has not been entered into the system yet.

The accounting system will allow this receipt to be entered and credited to the customer’s account. When entering the amount in receipts entry, the system will search for any open invoices to the customer. If none are found, the system will give the option to credit this receipt to the customer. If invoices are found, the system will attempt to apply the received amount to the oldest invoices first. If it is not desired to have the money applied to any invoices, use the Payment Data column to zero out any figures and the system will credit the receipt to the customer.

After the receipt has been proof listed, backed up and posted, it will show up on the aging list as a negative amount. It can only be removed by reconciling it to an open invoice or entering a negative receipt.

In Receipts Entry there is a specific option for reconciling posted receipts to posted invoices. This option is exactly like receipts entry, except that a receipt number is required (found on the aging report) so the system can retrieve the correct posted receipt. From this point on, the entry process is identical to normal receipts entry.

If choosing to enter a negative receipt to offset the original unreconciled receipt, two receipts will show up on the aging list, one positive and one negative. These are more difficult to remove. They must both be applied to an invoice, but there is usually not an open 0.00 invoice lying around when one is needed.

There are two methods of removing these receipts from the aging list. First, the Reconcile Posted Receipts option may be used to apply these receipts to a common invoice. The invoice amount must be at least equal to the receipt amount for this to work. Also, both the positive and the negative receipt cannot be reconciled in the same Batch. They must be posted in separate Batches, but to a common invoice. This option is a bit unwieldy, but it works.

The second option is to call Technical Support for assistance.

Automatically Voiding Invoices or Receipts

Invoices and Receipts can be voided automatically. The system will display lists of unreconciled AR Invoices and Receipts. The user can tag the desired invoice or receipt and the system will post a reversal for the tagged entry. The user will have the option of telling the system to place an unposted copy of the invoice or receipt into a batch for later editing and re-posting.