Processing Invoice Adjustments

This procedure is used to adjust or write-off the balance of an accounts receivable invoice (or a portion of it), and to charge the amount of the adjustment to a specific account in the General Ledger.  You may use this procedure to "write off" individual invoice balances off to Bad Debt Expense or to process other invoice adjustments as required.  To adjust an invoice you should perform the following steps. 

1.  Verify that all Daily Startup Procedures have been successfully completed.

2.  Identify the invoices that require adjustment and the amount and nature of the adjustments for each invoice.

3.  Determine the general ledger accounts that each invoice adjustment will be charged to.  Note: You may not post invoice adjustments to a general ledger cash account (cash transactions should be handled using the AR Payment Entry program) or to an accounts receivable control account (this will cause the AR sub ledger to go out of balance with the general ledger accounts receivable control account).

4.  Select the AR Invoice Adjustment program from the menu.  Confirm that the correct posting period is displayed at the top of the screen.  The posting period used for invoice adjustments is the current default accouting period and it cannot be changed by the user. 

5.  Enter the batch number to be used for the adjustments you will be making or press the ENTER key to have the system assign the next available sequential batch number to the transactions you will be processing.  The batch number is an optional field that can be used during reporting. 

6.  Use the prompt button located next to the Inv No: window to activate the Invoices Selection List, which can be used to find the invoice to be adjusted.  Once you have selected a valid invoice record, the invoice amounts and the invoice company are displayed in the top section of the program.

7.  Accept or change the department the adjustment will be charged to.

8.  Use the prompt buttons located next to the Acct: Sub: or the Account Description windows to select the General Ledger account to be used for the adjustment.  The GL Accounts that can be selected are restricted to accounts with an autopost greater than 500 (to prevent posting to cash, receivables and other invalid accounts).

9.  Enter a brief (optional) note into the AR Memo field.  The adjustment program displays the Memo field from each accounts receivable invoice that you load into the program.  You may view or modify the information that is displayed in this field as required.  Note:  If you enter information into this field, it will overwrite any information that was previously stored in the field.

10. Enter a brief (optional) note into the Project field.  The information which you input into the project field is stored in the journal entry that is created to post the adjustment transaction.  This information may be viewed on-line or printed using the various inquiry programs and reports that are available on the system.

11. Accept or change the pay code to be used for the transaction.  The pay code field is used to classify accounts receivable payment and adjustment transactions.  The Pay Code information can be used during reporting and these codes are also used when displaying customer payment history.  The valid entries for the Pay Code field are determined by the Transaction codes that have been set up in the Transaction Codes Table.   Valid pay codes normally include ADJ (adjustment), BAD (bad debt adjustment) and STA (sales tax adjustment).  Additional pay codes may also be set up as required (Please see the System Administration Guide for more information about setting up the transaction codes which are used by the accounts receivable system).

12. Accept or Change the Post Date to be used for the transaction.  The Post Dates is displayed in Invoice Activity Lookup programs and it used to specify the date on which a transaction took place.  The field can also be used when running reports to make year end accruals.

13. Enter the amount of the adjustment to be made to the selected invoice.  The amount you input can be used to increase or decrease the current open balance of the invoice. 

14. Enter an AR Comment for the Invoice.  The AR Comment can be used to explain why the adjustment is being made, and it will print for the invoice when the invoice is output on an AR Aging.

15. Press the Adjust Up or the Adjust Down button to increase or decrease the invoice balance by the specified adjustment amount.  The system will not allow you to drive a positive invoice negative or a negative invoice positive (this is to force consistency during payment application and reduce confusion when communicating with customers).


AR Deposit Processing