This guide provides instructions on how to record credit losses on sales invoices and how to adjust accounting settings. The guide includes step-by-step instructions for recording credit losses, managing invoices, and handling VAT.
Credit loss entries for sales invoices are made in the Sales > Sales Invoice List section. By filtering the desired invoices to be displayed, the result set can be narrowed down, and from the displayed set, the invoices that are to be recorded as credit losses can be selected. A default account is defined for credit losses where the entries are made. This account can be modified if necessary in the Financial Management > Accounting Settings > Basic Accounting Information > Accounts Used in Default Entries > Sales Credit Loss Account.
Credit loss entry
In the example, the search in the sales invoice list is filtered to show invoices in collection:
Once the invoices are checked, select "Record as Credit Loss" from the Invoice Actions menu.
In the view that opens, the number and amount of invoices are displayed, as well as the account to which the credit loss entries are made.
By default, the entry is made for the current day, but the date can be changed. By selecting "Record as Credit Loss", all selected invoices are recorded as credit losses, their status changes to credit loss, and the entry is recorded in the accounting.
Finally, a summary of the modified invoices is displayed. In this view, the original entry of the invoice is visible. The credit loss entry can be viewed by drilling down to the invoice and the invoice transactions to the entry.
The visibility of the credit loss entry in the invoice transactions:
The entry that has been formed from the credit loss entry:
It is also possible to record a credit loss on an invoice by adding a transaction, which is set to be processed as a credit loss.
Partial credit loss entry
If only part of the invoice is to be recorded as a credit loss, it can be done manually by adding a normal transaction to the invoice for the desired amount. This can be recorded, for example, by opening the desired sales invoice and then "Sales Invoice Actions" > Add Transaction. First, select the desired account/payment method in the "To Account" section (the choice does not matter at this point, it can be a clearing account, etc.). The payment date is recorded as the date on which the credit loss entry is desired, and the amount section is the amount intended to be recorded as a credit loss. After adding the transaction, the entry is modified so that the correct counter account is selected for the sales credit losses defined default account. You can check this account in Financial Management > Accounting Settings > Basic Accounting Information > Accounts Used in Default Entries > Sales Credit Loss Account. After making the necessary changes to the entry, an explanation/additional information related to the credit loss entry can be added to the entry if desired. Then the changes made to the entry must be saved. Unfortunately, this manually recorded partial credit loss entry through the transaction does not appear under the subheading "Credit Loss" in the sales invoice list.
Q: Does the system know how to handle VAT recording?
A: Yes, the system also records VAT off the debt account. If the invoice has invoice lines with different VAT percentages, these are recorded on the entry in proportion to the line amounts. The VAT entry for the credit loss follows the original invoice and its entry.
Q: What if a payment is made on an invoice recorded as a credit loss?
A: Here are two possible ways to proceed. If the credit loss is recorded in an open period, remove the credit loss transaction and cancel the entry formed from the credit loss.
Another example way to do this is to record a transaction on the invoice on the correct date, with the processing method as normal. This creates a double transaction on the invoice. Then make another transaction as negative on the same day. This changes the open amount of the invoice to zero. Then the negative transaction entry must be edited to form a mirror image of the original credit loss entry. This then nullifies the original credit loss entry in the accounting.
Q: If the invoice is in Amil's service and a credit loss entry is made on it, does a message go to Amil?
A: In this case, the system does not automatically send a message to Amil.
Keywords: Credit loss, sales invoice, VAT, accounting, transaction, entry, invoice, default account.
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