As an administrator, there may be times when you need to void an invoice due to an unsuccessful or refunded electronic payment. This guide will take you through the steps to do this, while also explaining how this will impact your financial accounting.
Steps to Void an Invoice:
Find the invoice that you need to void. This should be one where the electronic payment was unsuccessful or refunded.
To do this use the search, or navigate to People screen and click on the Billing tab. Scroll to the bottom of the page to find Billing History.
Select the invoice you want to void and click on the 'Void' button located in the Actions menu at the top right of the invoice screen. This will initiate the process to void the invoice.
Please note: After voiding an invoice, the invoice information and invoice ledger information are preserved. The open balance is set to $0 and the necessary accounting activity is applied.
Accounting Activity:
Voiding an invoice triggers the following accounting activity:
Accounts Receivable (AR) is credited: This means that the amount owed by the customer decreases.
Revenue or the appropriate plan code is debited: This reduces the income that was previously recognized from the invoice.
If a discount was included on the invoice:
The General Ledger (GL) mapping for the discount is credited: This adjusts the total value of discounts offered.
AR is debited for the discount GL code: This decreases the amount the customer owes for the discounted part of the invoice.
If a 3rd party payer was included on the invoice:
The payer's GL code is credited: This reduces the amount owed by the third-party payer.
AR is debited: This decreases the total amount due.
Ledger Detail Report:
After you void an invoice, it will appear on the Ledger Detail report. This is useful for tracking voided invoices and understanding the financial impact.
Labeling:
For consistency, the labels for voided plans, discounts, and payer allocations are all "Voided". This makes it easier to track these items in your system.
Manual Payment Invoices:
The process for voiding invoices with unsuccessful or refunded electronic payments is the same as for manually paid invoices (e.g., cash or check). If you need an example, please refer to the guide on how to void manually paid invoices.
By following these steps, you can efficiently manage your invoices and keep your financial records accurate. If you have any additional questions, don't hesitate to reach out to our support team for assistance.