I created an invoice for a customer and then processed receipt for this invoice. Mistakenly, I later cancelled this invoice and the system automatically created a credit note. Moreover, later I created another invoice so that this receipt could be recorded and again processed this receipt against the new invoice.
I can go to the receipts journal and process the credit note. But this does not make sense to me.This would credit our bank, when we have not actually paid the credit note. How do I deal with this situation?
I would really appreciate any help.
Hi Jen Guo,
When a paid sales invoice is reversed, the system will automatically create a credit notes as there is no invoice to reverse (paid already) The credit notes is actually a negtaive invoice. This negative invoice offset the original one.
When you open the receipt windows for that customer, you see a negative invoice, the credit notes, sitting there. You only need to apply the amount under amount received. The entry will then offset your original receipt.
The general idea is:
Original invoice is offset by the credit notes Original receipt is offset by the receipt to the credit notes
The net result is zero
Hope this helps
Thanks for clarifying.
I wanted to make sure what I am doing is right becuase when I looked at the transaction , processing the credit note credited the bank and debited the accounts receivable. As you said, it is a result of offsetting the previous transaction.
You are correct.
For the original receipt, it will debit the bank account and credit the account receivable
For the receipt you post against the credit notes (negative invoice), it will debit the account receivable and credit the bank account.
Therefore, they offset each other and the net result is zero.
© 2015, Sage Software, Inc. All Rights Reserved. Sage energizes the success of businesses and their communities around the world through the use of smart technology and the imagination of our people. Sage has reimagined business and brings energy, experience and technology to inspire our customers to fulfil their dreams. We work with a thriving community of entrepreneurs, business owners, tradespeople, accountants, partners and developers who drive the global economy. Sage is a FTSE 100 company with 14,000 employees in 24 countries. For more information, visit www.sage.com.
Community Terms of Service | Community Guidelines | Blog List | Community Help