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Hi We had an invoice created in old software.
We have AR entry for that customer as an initial balance.
That invoice will never get paid so we need to deal with it.
How would we do it? Creating Credit note does not seem to work as it creates two entries in the AR.
We paid taxes on that amount so we need to make sure that this is taken into account too for next reporting period.
Thank you.
Hi Robert,
If the credit note is making two entries in the AR, you've selected the wrong account.
In the credit note, the invoice line you create shouldn't have your AR account selected. Instead, it should be the counterpart of the entry, either an income or expense account. The decision will just change where it appears on your financial statement, do you want to reduce your sale figures (use income) or do you want to keep your sales, but increase your bad debts expenses (use expense).
Cheers,
Jake Robinson
Thank you Jake, so if I create a credit note with line items of inside sales what journals/accounts should be updated? how do I pay that note? I need this note to be paid from the AR and effectively reducing it.
There will generally be 3 journals items created:
- 1 for the account you specify in the invoice line (income or expense as above)
- 1 for the taxes that you've applied to that line (will not exist if no taxes, or multiple if multiple taxes)
- 1 that Odoo automatically creates which is the AR entry to balance the other two.
This AR entry will be able to be reconciled against any other AR entry that partner has, reducing their payable amount. This can be done in the manual reconciliation screen.
If you have initial balances only instead of open invoices, as recommended when initiating the accounting, you'll have to post a reverse entry directly against your debtor loss account with the corresponding tax rate.
Thank you. Are you referring to a general entry? if so could you please give an example? I am not accountant so it is a little knew to me. :)
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