Reversing/Crediting a Client Invoice

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Circumstances may arise when an existing Client Invoice is incorrect such as the Invoice Price or Sales Tax of an Item is wrong.  After a Client Invoice has been posted, it cannot be edited.  In order to make changes, the Invoice must be reversed and reissued with the correct Items and figures.  To do so, go to Accounting - Client Invoices / Finance Charges to display the Client Invoices / Finance Charges Window and click the Existing Tab on that window.  Then, click the Credit button which will open the Reverse/Credit Invoice Window shown below.

 

reverse invoice window

 

An Invoice cannot be reversed if it has any Payments, Adjustments, or prior credits applied to it.  In order to reverse or credit the invoice, all Payment and Invoice Adjustments recorded for the Invoice must first be voided.  A Client Invoice also cannot be reversed if it is itself a Credit Invoice or it has been credited previously.  A warning will appear to alert you when this happens.

 

Fiscal Month:  The Fiscal Month defaults to the original Fiscal Month of the Client Invoice.  Provided the user has the Allow Fiscal Month Changes Password Attribute, the Fiscal Month can be changed if desired.

 

Date:  This is the date that prints on the Credit Invoice, and the date that the credit will be posted to the General Ledger.  This date will default to the current system date, but you may wish to "back date" the Credit Invoice to the original Invoice date in certain circumstances. As Sales Tax is recorded on a calendar-basis, it is the Credit Invoice Date, rather than the Fiscal Month, that determines which month the credit for the Sales Tax of the Credit Invoice is recorded.

 

Transaction Description (Desc.):  You may optionally enter an explanation of the Credit (i.e. Merchandise Returned) for your future reference.

 

Hide on Reports:  You can use this option to prevent the Credit Invoice and the original Invoice from appearing on certain reports such as the Sales Journal.  This is convenient if the Invoice was simply an error and you do not wish to have the erroneous transactions cluttering your reports.

 

Skip Printing:  If you do not require a printed copy of the Credit Invoice, you can select this option.

 

After properly configuring the above options, provided that the Skip Printing option is not selected, click the OK button to display the Print Credit Invoice Window from which the Credit Invoice can be reviewed in the Print Preview Window or sent to the printer.  After printing and reviewing the Credit Invoice, you will be asked to Accept or Reject the Credit Invoice.  Accepting the Credit Invoice will post the Credit Invoice, effectively reversing the accounting of the original Client Invoice.  If the Skip Printing option is selected, you will immediately be asked "Are you sure that you wish to post this Credit Invoice?".  Selecting Yes will post the Credit Invoice while clicking No will take no effect.

 

Accounting:  Crediting an Invoice will reverse all of the accounting entries made by posting the original Client Invoice.  If the Credit Invoice is made to a Fiscal Month different than the original Client Invoice then you may have open Accounts Receivable entry for the Client Invoice between the two Fiscal Months.  You should not post a Credit Invoice to a period prior to the original Invoice.

 

Note:  Some information such as the Item Description can be changed using the Update Description button on the Client Invoices / Finance Charges Window - Existing Tab without crediting the Invoice.  For more information see Client Invoices / Finance Charges Window - Existing Tab.