How do I fix a negative balance Invoice

An invoice can only have a negative balance if a payment was made on an order, then the order amount was reduced (lower than the payment) in Change Orders or during Invoicing.

Let's say that an order was entered for $150.00 and the customer put a deposit of $100.00 on the order. When the job is complete the order has to be adjusted. A detail line for $75.00 must be deleted.

Someone then goes into Change Orders and deletes the line. This adjusts the "AMOUNT DUE" to $25.00CR. That means that the customer overpaid by $25.00.

What to do After a Negative Invoice Updates

Without realizing that the invoice states a negative balance the person completes the invoice and it updates. (There is a way to correct it in invoicing, which will be explained at the end)

Accounts Receivable (and all the reports) will show an invoice with a negative balance. Unfortunately, you cannot apply that negative amount to another invoice. The following steps explain what to do when the invoice has already updated.

If the Overpayment Is Returned to the Customer:

A debit adjustment must be made to the invoice for the amount of the negative balance(this will bring the amount due to zero.) If General Ledger is turned on, then the offset would be to the Cash Account.

Next, run the Adjustment Journal to update the files.

If the Overpayment Is to Be Applied to Another Invoice or to the Customer's Account:

A debit adjustment must be made to the invoice for the amount of the negative balance(this will bring the amount due to zero.) If General Ledger is turned on, then the offset will be to the Cash Account.

A credit adjustment can then be applied to another invoice or to On Account. If General Ledger is turned on, then the offset will again be to the Cash Account. (money swapped from one place to another place)

Next, run the Adjustment Journal to update the files.

What to do During Invoicing

Invoice Entry allows overpayments to be returned to the customer.

If the Overpayment Is to be Returned to the Customer

During Invoicing, if the balance is a negative amount, then at the prompt:

ACCOUNT CLIENT, TO ENTER PAYMENT AMOUNT, TO PRINT RECEIPT

Press to enter a payment. Press for Cash. Type in 0 (zero) for payment amount and press .

The "AMOUNT DUE" field will be set to zero and the "CHANGE" field will contain the amount of the credit.

All of the Cash Reports will reflect a negative transaction reducing the amount of Cash taken in. In effect, the customer got his money back.

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