Accounts Payable: Credit Entries and Voided Checks Accounts Payable: Credit Entries and Voided Checks
Reversing Invoices Which Are Not Yet Paid
To reverse an invoice which is still open, go to the original entry screen used to make the invoice entry (Trade Invoice or Subcontract Invoice Entry). Create an invoice which is identical to the original invoice in every aspect, with the exception of dollar amounts and quantities, which should be proceeded by a negative sign (-).
Pay special attention to subcontract invoice entries where retention, backcharge, and/or discount amounts may have been specified in the original invoice entry. Make certain these amounts are all duplicated preceded by a negative sign (-).
After proof listing and backup, post the invoice. the accounting system will make all the needed reversing entries to all the data files involved.
When printing an A/P Aging report after the posting, both the original and the credit invoices appear on the aging list. These now balance out to zero, so the vendor totals are correct. Eliminate these invoices from the listing to avoid clutter and confusion.
To remove both invoices from the open listing, they must be marked as Paid. This is accomplished through the Payment Selection option.
In Payment Selection, mark both invoices for payment. It is possible to mark them For Computer Payment or mark them both as Paid by Hand-Written Check.
During the check printing process, the system will mark these invoices as Paid. If the invoices are marked For Computer Payment, the system will attempt to print a check to the vendor for the balance of the two invoices. When the system finds that the balance is zero, it will not print a check or make any G/L transaction. It will simply mark both the invoices as Paid.
Voiding A/P Checks by Reversing Paid Invoices
The manual method for voiding Accounts Payable checks is by reversing the paid invoice. This means finding the invoice(s) which were paid off by the check and making reversing entries for each invoice.
When making this reversing entry, follow the same instructions followed above for entering a credit accounts payable invoice. The one exception occurs when the system asks if this is a Prepaid Invoice. Place a check in the Prepaid box. The system will ask for the date of payment and the check number. A date and a check number must be entered so the system can void the check while reversing the invoice.
If multiple invoices were paid with the same check, there is the possibility to enter a corresponding credit invoice for each original invoice or enter one credit invoice for the total of all the invoices. Be careful if choosing to enter one credit invoice for multiple original invoices. In this case special care must be taken to ensure that costs are applied to the same G/L accounts and/or job cost codes that were originally charged.
After proof listing and backup, post the invoice(s). The system will create all the transactions necessary to void the check and reverse the invoice(s). No payment selection or check printing processes need to be performed because the newly-created invoice will not appear on the A/P Open Invoice Listing.
Entering True Vendor Credits
There are other reasons for entering credit invoices. Most notable among these are situations where the vendor actually owes a certain dollar amount. In this instance, a credit invoice for any dollar amount may be entered, proof listed, backed up and posted. When it comes time to select items for payment, a regular invoice and a credit invoice may be selected for payment and the system will cut a check for the difference.
For example: if both an invoice for $1,500.00 and a credit voucher for -$300.00 for payment are selected, the system will print a check to the vendor for $1,200.00.
NOTE: This feature may not operate properly if the two invoices involved were posted to two different jobs. Depending on the user’s responses to questions in the check printing program, the system may print one check to the vendor for each job. If this is the case, the system will not print the difference of the two selected invoices, but will print one check for $1,500.00 and one voided check. It will mark the -$300.00 invoice as Paid and create a new -$300.00 open invoice with a description of Balance Forward.
If Balance Forward invoices show up on the aging report, please call Technical Support.
A/P Checks can be voided automatically by the accounting system. When the check number is entered into the Check Voiding screen, the accounting system will seek out and retrieve all associated A/P invoice data and give the option of either voiding the check and resetting the invoice(s) to Open or voiding the check and reversing the invoice(s) entirely. The user can also instruct the program to place an unposted copy of the invoice into an invoice batch for editing and posting at a later time.
A/P Invoices can also be voided automatically. The system will display a list of invoices that have not yet been paid. The user can tag the desired invoices and the system will post a reversal for the tagged invoices. Once again, the user will have the option of telling the system to place an unposted copy of the invoice(s) into a batch.