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mtcbell
Level 1

Reclassifying Credit Balances from A/R to Current Liabilities

I have a question about customer credit memos and their presentation on my balance sheet, or more specifically my A/R reports. I had to issue a large number of credit memos to customers that would like to keep the credits on their accounts to use at a later date. I used the Credit Memo function within the sales module to do this, and they all present properly in the individual customer accounts as negative balances ready to apply to future invoices. I do not want to change that presentation, as I need those credit memos available to auto-apply to the future invoices.

 

My issue stems from the fact that I now have a very large number of customers with negative balances on my A/R Summary and A/R Detail reports. I would like to somehow remove these line items from the A/R reports, so that those reports only show actual receivables, and reclassify the "negative A/R" properly as a current liability on the balance sheet.

 

I have tried using a Journal Entry to debit A/R and credit a Current Liability. Debiting A/R requires me to list the customer name, which properly removes that line item from the A/R aging but then puts a journal entry on the customer account screen that is marked as "overdue". I can get rid of that "overdue" by using the Receive Payment function, but that applies the Credit Memo to the Journal Entry and then I lose the ability to apply the Credit Memo to future invoices.

 

There has to be a better way. Any suggestions would be appreciated!

1 Comment 1
john-pero
Community Champion

Reclassifying Credit Balances from A/R to Current Liabilities

If you were to successfully move all negative A/R to a different liability account you would have to move them back in order to apply them.  The better way is to change what you see. Customize the reports you use to only show positive numbers (it already ignores 0 values)

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