I wrote off any invoice earlier in the year to bad debt. I created a credit memo against it and applied it, both show zero balance. However, if I look at the customer account balance, it still shows the invoice amount but is no showing on the A/R Aging report. Now, the customer just contacted us and paid the invoice with a credit card. How do I receive this??
Both the Credit memo and the Invoice are "AR transaction activities" and they show as Activity for that name. They don't Go Away. You ran your AR reports and confirmed the customer is not on the Aging report at all? That is how you prove you applied the credit memo to the Invoice.
The AR Aging report should not show the name at all. The Customer Center, on the left, should show 0 for them. If not, what did you enter on the Credit Memo as the Write Off item? It should not be linked to Bank or AR and should not be a Payment item type.
Now, what they just paid is processed as a Sales Receipt, because you had a sale, you wrote it off, and then you got paid, anyway = this is New activity.
Original sales made by invoice in June. Write off by credit memo in Nov.
Thank you for your quick reply. I ran the A/R Aging for 500 days back and this customer does not show as outstanding. The invoice is in April and the write off in June of this year. On the credit memo, I created Bad Debt and created it under "Other Charge". If I am looking in the customer center, there are 2 columns next to the name. It shows Balance total of the amount of the invoice $2847.
We don't use Sales Receipts so would I just create a new invoice in December and apply the payment to that?
The Name should be on the AR Aging summary at all. You don't need to Go Back. The open balance carries forward, until paid or cleared out.
If you see a balance next to the name, in Customer Center, and that column is titled Balance Total, then you left AR open balance and did not write off the invoice with the credit memo properly.
The Write Off item should be linked to an Income account you use for refunds and write offs. Edit that item to confirm where you linked it. It is not AR; using it on the Credit Memo is what makes it AR. Credit Memo, Invoice and Receive Payment are AR activities, by definition. If you link that item to AR, the item creates a Debit; a Debit to income as Contra- sales, or Reversal of that income. If you link it as Debit AR, that is the same as an invoice = creates open AR balance. The Item might be where you made your error.
You use Sales Receipt for the payment, now. There is no Invoice; you were not anticipating this payment and there was no Sale waiting to be paid. Just use the same info on the sales receipt that you would normally put on an invoice.
invoice = unpaid sale for this date, waiting for the funds to arrive later
sales receipt = paid sale, the funds are right here as of this date
Use Sales Receipt, now. There is no reason to do it in two steps: invoice and payment for the Sames date = Sale Receipt. That's why it exists.