Ask Me Help Desk - Remove a credit posted wrong, from closed Acct

A Credit was entered for a Customer in 2008, but it should not have been a credit, and showes in the year 2009 as Credit and now in 2010. I just started with that Company some weeks ago and they want me to corret it in Peachtree and I tried anything I know. Could somebody, please help me. I am very good in Software, but I have a major problem at this moment. I apprecitate any help.

Two questions. Do you know what originally happened? i.e. what was the debit that was made with that credit? And, do you know how it was entered? That is, was it done through the cash receipts or the sales journal?

I'm trying to establish not only where the other side of that entry went, but also whether it would have gone BOTH to the customer's account and to the controlling A/R account? Does the A/R match the aged report?

I know Peachtree reasonably well (assuming the newer versions aren't drastically different), but I need to know what happened.

BTW, I feel for you. Practically every job I've been on has followed someone screwing lots of stuff up and me trying to figure out what happened and fixing it all.

Hy Morgain300,

Thank you so much for responding. Ok, the original entry was made in 2008, when the customer paid for two items $590.- each, total $ 1180 dollar, which was paid in one check, only one item was delivered on time, so somebody input one amount of $590.- into the invoice reseived as expense and then the second item was delivered and paid for in a check amt of $590.- and then they closed the 2008 books, so it still showes a credit of $590.- dollar and I have no Idea how to correct that. I will appreciate your help very much, because I really don't know, how to correct it.

Thank you in advance, I mean that.
Monika

I'm still confused.

It was paid in one check. But then you say later the second item when delivered was paid with a check for $590. Are you meaning the customer literally paid for it again, and that's what is creating the credit in their account? Or are you just meaning they didn't record the receipt of it until it was delivered? I can only imagine you mean they really did pay for it again, otherwise where did the credit in their account come from?

I still don't know what exactly happened. In order to know a good way to fix something, I have to know exactly what happened. I can give you two ideas, but it's based on assumptions I'm making, and those assumptions aren't really based on much.

Look at the customer's account and see if there's a negative balance on that invoice. I'm not sure how it got there, because if it was paid in full the first time, the invoice wouldn't show up in the cash receipts list again to even put a negative on it. (That is, once it's zero, it's gone. The negative would have to go on while it still had some balance on it.)

At any rate, if that invoice is still there and has a negative on it, you can simply do a fake negative payment. If you go into the cash receipts and pull up that customer, that invoice would be in there as a negative. Click the box and it'll make a negative payment. That will take care of the customer's account and get rid of the thing.

However, you still have the issue of what that will credit. A negative payment is a debit to the receivables and a credit to... something. It's probably defaulted to your cash account. If cash is off cause that's where they put the original payment, that's OK. If the cash balance is correct, then you need to change that box. You should be able to put any account in there you like. If this never got refunded, theoretically you now have some miscellaneous income so that's as good a place as any to put it. Never hurts to have some miscellaneous accounts to throw stuff like this through.

Now, if that invoice isn't showing up but they have a negative on their account... how can that happen? Um... I can't think how that could happen. (I've even got mine open trying to force this.) If you use the "apply to revenues" tab, even if you put a negative into it, that's not going to do anything to the customer's account. That's for if you don't run it through with an invoice but would like to have record of who the customer was. That doesn't go through receivables at all. So I can't see how that would happen.

So assuming the "credit" is in the customer's account, I can only imagine someone put a payment in bigger than what was in there and made that invoice go negative, which you can solve with the above method. Theoretically, that shouldn't mess up the receivable controlling account. It would have the credit as well (reducing the total) and it'll fix it too.

If that isn't what happened, or the aged report isn't matching the receivables, then I'd need more detail about how that all happened. (Like I'm still confused over that expense thing. Where does an expense come into this?)

Thank you so much, for all your help. The main problem is the Software, they are running Peachtree Complete Accounting and the person who entered everything in 2008 where the problem is, closed the 2008 accounting year in the Peachtree Software, so it want let me correct anything and the amount showes as credit in 2009 (which is not closed as accounting year) and 2010. Again, Many Thanks!

Yeah, I got the idea that they had closed out the year. Otherwise you can just go delete it and do it over.

So did that work? (Just curious how this came out.)

Yes, it would have worked, if the year was not closed out. But you are excellent in accounting, many may, Thanks again!

You should still be able to do this, despite the year being closed out. "Paying" an invoice (even a negative one) isn't dependent upon the year being closed out. If you closed out 2009, aren't there going to be a lot of unpaid invoices left in there? Well, so you can record payments for them, cause those are balances carried forward. Same thing here, as long as that invoice is actually in there.

Well, I get bound and determined I'm going to solve something. ;) I probably could if I were there (seen much worse things). But unfortunately can't see if for myself. Just hate to see you give up.