Customer account adjustments

In this example, a payment was applied to an account without indicating the discount, which created left a balance due of $18.87 on the customer's account. There are two options for resolving this:

Option A: Enter a cash receipts adjustment without reversing the original transaction.

1. Go to Accounting > Accounts Receivable > Cash Receipts Posting.
2. Enter or search for the customer. The system will display all open items in tabular format.
3. Leave Payment Type set to Check and enter a description such as “DISCOUNT.”
4. Enter $0.00 dollars in the Amount field. The bank account displayed at the top of the window will not be involved in this transaction.
5. Navigate to the Discount column and enter the value to be written off as a positive number. As soon as the discount is entered, the Balance will change to zero.
6. Cash applied will default as $0.00.
7. Because there is no change in cash, this item may be posted individually or with a regular cash batch.

Cash Receipts Journal G/L effect: Debit Customer Discounts / Credit Accts Receivable

Option B: Reverse the entire payment and start over.

1. Go to Accounting > Accounts Receivable > A/R Check Void.
2. Enter or search for the customer.
3. Enter or search for the check number.
4. Click the Void button at the bottom right of the screen.
5. The transaction will be exactly reversed and a negative cash receipt will be created as an individual item on your bank reconciliation.
6. The General Ledger effect of the reversal is posted in the current accounting period, regardless of the original date of the transaction.
7. Go to Accounting > Accounts Receivable > Cash Receipts Posting.
8. Choose the bank account if it is different than the default.
9. Enter or search for the customer. The system will display all open items in tabular format.
10. Enter payment type, description and amount.
11. Choose the item to be paid by clicking the box to the left.
12. Enter the net invoice amount in the Cash Applied field. This is the gross minus the discount.
13. Enter the discount in the Disc Taken field. The invoice balance will change to zero if the correct amounts were applied.

    Note: Disc Taken will automatically default if the discount date is prior to the Check Posting Date.

14. Proceed to the next item or click Save to add this customer to the batch.



Cash Receipts Journal G/L effect:

Void: Debit Accounts Receivable / Credit Cash In Bank

Reentry: Debit Cash in Bank / Debit Customer Discounts / Credit Accounts Receivable

If a customer’s payment is only a few days past the finance charge “grace period,” it is common business practice to remove the charge from the account.

1. Go to Accounting > Accounts Receivable > Cash Receipts Posting.
2. Enter or search for the customer. The system will display all open items in tabular format.
3. Leave Payment Type set to Check and enter a description such as “F/C ADJ.”
4. Enter $0.00 dollars in the Amount field. The bank account displayed at the top of the window will not be involved in this transaction.
5. Navigate to the Adjustment column and enter the value to be written off as a positive number. As soon as the adjustment amount is entered, the Balance will change to zero and the box will check itself.
6. Cash applied defaults to $0.00.
7. Choose the G/L account used to record “Service Charge Income” or “Finance Charge Income.”
8. Because there is no change in cash, this item may be posted individually or with a regular cash batch.

   Cash Receipts Journal G/L effect: Debit Finance Charge Income / Credit Accts Receivable

   

   For non-discount adjustments, use the Adjustment column and choose the appropriate G/L account.

   Note: If your company has Company Master Flag: “Produce Finance Charge Invoice” set to Yes, you have the ability to void your Finance Charge Invoice, and therefore do not need to write off with a $0 Cash Receipt

Use this approach to remove uncollectable debt from an open customer account. Please note that there are additional considerations when removing bad debt from the books, such as crediting sales tax.  Always check with your management and CPA for guidance before proceeding.

1. Go to Accounting > Accounts Receivable > Cash Receipts Posting.
2. Enter or search for the customer. The system will display all open items in tabular format.
3. Leave Payment Type set to Check and enter a description such as “WO 2017.”
4. Enter $0.00 dollars in the Amount field. The bank account displayed at the top of the window will not be involved in this transaction.
5. Navigate to the Adjustment column and enter the remaining value to be written off as a positive number.When the adjustment amount is entered, the Balance will change to zero and the box will check itself.
6. Choose the G/L account used to record “Bad Debt Expense.”
7. Because there is no change in cash, this item may be posted individually or with a regular cash batch.

8. 8. For customer invoices with Sales Tax follow these instructions:

   1. Right-click open invoices and choose Issue Tax Credit to credit any billed sales tax first. Note that this sales tax method is only appropriate for invoices originating in Inform. See also Sales tax rate changes.

   2. Click off customer invoices, the newly created sales tax credit memos, and then click the Adjustments box at the bottom. In the Overall Adjustment, enter the amount as positive, choose the G/L account used to record Bad Debt Expense.

Cash Receipts Journal G/L Effect: Debit Bad Debt Expense / Credit Accounts Receivable

• Use the individual line item Adjustment and G/L fields to write off specific transactions.
• For blanket adjustments, use the Adjustments button at the bottom of the screen.
• Note that the resulting credit will need to be applied to open debits.
• Use the correct method for adjusting Sales Tax.
• Do not manually write off sales tax through an adjustment
• Substantiate tax write offs on Sales tax Journal
• Avoid the following accounts in an Adjustment field:
• Any reconcilable bank account
• Any inventory account
• Accounts Receivable
• Accounts Payable
• Sales Tax Payable
• Sales or Sales Returns

•  Warranty Receivable and Warranty Pending (Clearing)

•  POS Deposits