Payments partially allocating error when Negative line entry in customer invoice

Nicole NewmanNicole Newman Member Posts: 1
edited July 15 in Accounts Hosted

Issue: We use a customer account to enter daily takings for a retail business . Items have been set up for the sales groups, but also for other accounts such as the funds put in the ATM, internal suspense accounts, variance accounts  and the POS debtors. 

Before recognising the payment could also be entered as a line item within the daily takings invoice, we entered the payments manually and allocated to each day. However we had an issue when trying to allocate payments to invoices that they would seem allocated but once the allocation was processed an amount still remained unpaid, repeating the process seemed to decrease the amount infinitely but never totally.

Reckons advise is negative line items cannot be entered in customer invoices, and discount should be used. However this was not appropriate as the payments go through for the bank rec (its not a discount on the sale) - we are using the functionality of the customer ITEM set up to channel to the relevent part of the ledger , not reduce
the value of a sale

Reckon told me to reverse Each and Every transaction on the
entire account, well over 5000 transactions. I asked if they meant just the affected transactions and they said no we would need to reverse all of them. This is not correct

You don’t have to reverse every transaction – you don’t even have to reverse negative lines at all UNLESS the negative line item on the invoice when the line item is set up as PAYMENT type (not other charge) 

So you can have negative line items on a customer invoice, providing the Item is set up as a other charge (not payment) when there is instances the line amount needs to be negative


  • John GraetzJohn Graetz Member Posts: 1,653 ✭✭✭
    edited July 15
    Hi Nicole.  Some very interesting findings that you have recounted and I am delighted that you have found a way around a "problem" which supposedly could not be fixed without some "hard yacka".

    Despite what you have stated in your last paragraph, my experience is totally different to yours, so it seems that there must be cases of some "horses for courses".  In my case, I do the books for a small Retirement Village where fees are mostly payable on a fortnightly basis, by direct debit only.  In my case, the Invoice lists a charge and then a negative line for the same amount, representing the payment by direct debit, meaning that the invoice ends up with a zero balance.  In my case, the negative line is set up as a payment type, which is being directed to a bank account, which means that I do not have to enter the receipt for the payment, because it is happening automatically by the issuance of the invoice..  So, whilst you say in your last paragraph that the negative line should be set up as a other charge, I find that my experience is that having set up the item as a payment type, it is working just fine for me.  I am not saying that you are necessarily wrong, but it is apparent that there are circumstances whereby setting up the negative line as a payment type, does work.

    I can tell you though, that generally speaking, setting up a negative line in recording a bill, does have the problems that you encountered for invoices.  The only way out generally seems to be the need to follow the Reckon advice that negatives should only be entered by way of a credit note.

    Thanks for reporting your experiences.

    John L G
  • Kwikbooks (Professional Partner)Kwikbooks (Professional Partner) Member Posts: 876
    edited April 11
    Hi Nicole

    I use negative on invoices all the time, no issues, and negatives on bills, again no issue.

    There has been issues reported where the invoice by all purposes has been paid in full, balance nil, customer account balance nil, but on an AR report shows up with an odd balance still owing.  This has been due to a negative on an invoice...but... it is caused by a negative with a different tax type, the negative has to follow the same tax type  i.e  item 1 gst  followed by -item 2 gst... if you put item 1 Free followed by -item 2 gst .... this can create the issue.

    I have clients with a retail outlet and till, cash takings, eftpos, and pays wages & bills from till.  I set up item codes in a sales receipt so she could enter daily taking, and show the expenses taken from the till.   Eft was entered on one sales receipt and matched the merchant settlement in the bank, the other sales receipt was entered as follows

        Item code1-income acct    cash takings from till  (full amount)           Free          $$$
        item code2-income acct    cash takings from till  (full amount)           GST          $$$
        item code3-bank acct        less expenses from till                                ----          ($$$)
                                                                            total to undeposited funds ready to take to bank

       Bank acct set up was "expenses from til" (petty cash acct), the expenses were paid from this account tracking the correct NCG NCF, and the account was reconciled to 0.00

    I have also had client who was paid for work, but charges/comm was taken from her money first, so the sales receipt showed the full amount of income, and I set up item codes to expense accounts for whatever was deducted and these were negative entries on the sales receipts.

    Never a problem.
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