A payment was applied to the wrong customer and a credit memo was created because it was more than the wrong customer owed. The credit memo may not be deleted and the payment may not be removed.
Since none of these transactions may be deleted, take the following steps to show the right open balance for each customer.
Two customers each with separate invoices
Customer A $10.00
Customer B $20.00
Customer B pays but clerk assigns payment (payment 8) to customer A and because the payment is for $20.00 which is more than Customer A owes, a credit memo is created and says in Comment: From Payment:8. This credit memo cannot be deleted. Also, because there is a Credit Memo involved, Payment 8 may not be deleted.
How to solve this issue:
1. Mark the Payment that has been recorded (for Customer A) in the Deposits screen. The money was received and a deposit presumably has been made. This screen will always show the deposit until it is marked.
2. In journal entry, create a reversing entry for this deposit for the same date as the original.
3. Create a negative Credit for customer A to remove the faulty credit they have been issued.
4. Create a new invoice for customer A since they still owe the money.
5. Record the payment for customer B including in the Deposit screen. Now that the journal entry (step 2) has been created to reverse the effect of the mistake above, the general ledger will correctly show the correct amount of the deposit on this date when payment is recorded and the correct item is selected for deposit.
6. If the initial payment has already been marked on your Bank Reconciliation, you must still follow the process above. Either way, on the next reconciliation, you will mark both the new deposit and the reversing journal entry. If it wasn't already marked, you will also mark the initial incorrectly entered deposit. You do not want to delete a deposit that is associated with a customer payment.
The outcome of the above steps will be:
A correct General Ledger
A correct Customer Balance Report
Correct customer Invoices
Customer Statements will be incorrect at this time. They will not show the negative credit. This has been reported to the development team as a technical issue (CNACT-959)
- CNA A/R - Credit Memo: Create Refund Bill then Delete the Bill (technical issue)
- CNA A/R - Credit Memos: How to remove
- CNA A/R - Overpayment: How to apply
- CNA A/R - Credit Memo: How to issue a Credit when a customer is canceling their account
- CNA A/R - Invoice: How to enter distribution properly to ensure the correct accounts are credited when payment deposit is submitted