We have a few customers who each have several hundred retail locations, and each location orders and is billed as a job/sub-customer, but the corporate headquarters (parent customer) issues combined payment - which we receive in QB and then apply to the numerous jobs/sub-customer invoices with no problem.
However, when the parent company is due credits and deduct them from a payment that needs to be applied to multiple sub-customer invoices, the credit memo requires 2 general journal (GJ) entries in order to apply it to job/sub-customer invoices. Why does QB require these GJ's for applying credit memos to sub-customer invoices, but does not require this for applying payments to sub-customer invoices?
As an example:
30 stores (jobs/sub-customers) order $1,000 of product each ($30,000 total)
We ship and invoice each order separately per customer's requirement (30 job/sub-customer invoices)
Approximately 3 weeks later, we receive a payment from the corporate office
The payment identifies all 30 invoices but also several deductions from payment:
invoice payments = $30,000
payment deductions = - $10,000
Net Check Amount = $20,000
We apply the $20,000 to 20 jobs/sub-customer invoices; everything applies directly with no problem.
We create a credit memo under the corporate company (parent customer), but in order to apply it to the 10 remaining job/sub-customers accounts, we have to open each invoice separately, then select apply credits, QB then creates a general journal entry moving the credit Out of the parent customer account, and then a 2nd general journal entry moving it Into the job/sub-customer account to apply it to the invoice.
Question:
Why will the credit memo not apply directly from parent to job/sub, like the payments do?
Is there something we should do differently in creating the credit memo??
