Chargebacks and Adjustments
Receivables lets you create adjustments and chargebacks against transactions to which you are applying a receipt. You can create multiple chargebacks and adjustments against each transaction, for positive or negative amounts.
- Receivables lets you enter a chargeback against a credit memo or an on–account credit if they have a positive balance.
- Receivables uses the transaction type of the transaction you are adjusting to validate the adjustment or chargeback amount. If the transaction type does not allow overapplication, you cannot enter an amount that would reverse the sign of the balance of the debit item.
- Chargebacks and adjustments do not follow the natural application rules; this lets you adjust transactions in either direction, regardless of the Natural Application flag.
- If the profile option AR: Cash – Allow Actions is set to No, the Chargebacks and Adjustments buttons are not available in the Applications window.
Creating a Chargeback
Use chargebacks to create a new debit item for your customer when closing an existing debit item. For example, your customer sends payment of $75 for a $100 invoice. You can apply the receipt to the invoice, then create a chargeback for the balance due.
- Receivables requires that you automatically number your chargebacks.
- You can change the base number for your chargeback numbering sequences by updating the Last Invoice Number field for this chargeback batch source in the Transaction Sources window.
- Charge backs can be viewed in transacrtion window but needs to be created while applying receipts to transactions. the following error message 'll be shown if you try to create a chargeback in transaction form.
To create a chargeback:
1. Navigate to the Receipts window. Query or enter the receipt. Choose Applications.Select or enter the Transaction to which you want to apply this receipt and click on Chargebacks button.
2. Enter the transaction Type and the Amount of this chargeback. The default chargeback amount is the remaining amount of the transaction. Receivables displays the new remaining amount in the Balance Due field. You can enter an amount greater than the balance due only if the Allow Overapplication option for this transaction type is Yes.
3. If document numbering is enabled and the document sequence associated with this receipt is Manual, enter a Document Number for this chargeback. If the sequence type is Automatic, Receivables assigns a document number when you save.
4. Enter the Account for this chargeback. The transaction type provides the default account, but you can change it.
5. Enter the Due Date for this chargeback. The default due date is the value of the Chargeback Due Date parameter in the System
Options window. For example: Current Date, Deposit Date, Open Invoice Due Date, or Receipt Date.
6. Open the More tabbed region, then enter a Reason for creating this chargeback and any Comments (optional). Chargeback reasons can
include Refund, Billing Error, or Write Off. You can define additional chargeback reasons in the Receivables Lookups window.
1. Navigate to the Receipts window. Query or enter the receipt. Choose Applications.Select or enter the Transaction to which you want to apply this receipt and click on Chargebacks button.
2. Enter the transaction Type and the Amount of this chargeback. The default chargeback amount is the remaining amount of the transaction. Receivables displays the new remaining amount in the Balance Due field. You can enter an amount greater than the balance due only if the Allow Overapplication option for this transaction type is Yes.
3. If document numbering is enabled and the document sequence associated with this receipt is Manual, enter a Document Number for this chargeback. If the sequence type is Automatic, Receivables assigns a document number when you save.
4. Enter the Account for this chargeback. The transaction type provides the default account, but you can change it.
5. Enter the Due Date for this chargeback. The default due date is the value of the Chargeback Due Date parameter in the System
Options window. For example: Current Date, Deposit Date, Open Invoice Due Date, or Receipt Date.
6. Open the More tabbed region, then enter a Reason for creating this chargeback and any Comments (optional). Chargeback reasons can
include Refund, Billing Error, or Write Off. You can define additional chargeback reasons in the Receivables Lookups window.
After completing chargeback we can verify the intial invoicve against which the chargeback is done and it should reflect the transaction in Adjustments header.
After the chargeback is created we can query it in transaction form.
Accounting entries for chargeback is same as that of invoice i.e Receivable Dr.
Revenue Cr.
Revenue Cr.
Creating an Adjustment
Create adjustments to increase or decrease the balance due for an invoice, debit memo, chargeback, or commitment. For example, you apply a receipt to an invoice, but there is still an open balance of two dollars. You can create an adjustment to write off the remaining amount and close the debit item.
Note: If you create an adjustment during a receipt application (for example, to write off a small remaining amount) and then unapply the application later, Receivables reverses the adjustment and assigns it a status of ’Adjustment Reversal.’
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