Application between vendors and customers

Veica
Veica Member Posts: 43
edited 2011-12-07 in NAV/Navision Classic Client
Hello,
Since finance is not really my thing I'm asking for your help! We have a vendor that issued us a credit memo and I need to apply that credit to a customer's invoice. Is there an easy way to accomplish this?

Thank you in advance!

Answers

  • David_Singleton
    David_Singleton Member Posts: 5,479
    You need to ask your accountants or auditors how they want this handled. Companies have different ways of handling their finances, so you need to do it the way your company needs it done.
    David Singleton
  • Veica
    Veica Member Posts: 43
    I did ask the CFO and all he wants is for the accounting clerk to apply the vendor's credit memo to the customer's invoice. How can we do this? I've tried through the gen. journal, sales journal and payables....
    Thanks
  • jglathe
    jglathe Member Posts: 639
    Hi Veica,

    you can do this by posting in two lines, one with the customer account and one with the vendor account. The document type must be empty. Both lines can select the entries which are to be applied.

    with best regards

    Jens
  • Veica
    Veica Member Posts: 43
    Hello,

    I've tried that posting the 2 lines but because the invoice on the customer's account is a negative sign and so is the credit memo on the vendor's side I'm always out of balance. I'm pretty sure I've seen this done before but I just can't figure it out.
  • Savatage
    Savatage Member Posts: 7,142
    What we would do is:
    Sales Journal - add a credit memo to the customer
    Puchase journal Apply an Invoice to the Vendors Credit Memo to wipe out.

    The key is to use the same "balance account no." for both entries. they will balance out to zero and now the customer has the credit not the vendor.

    & make a note in the journal description field of both entries. "Moved from Vendor XXX" or something to describe the action taken
    Harry Ruiz
    http://www.BiloBeauty.com
    http://www.autismspeaks.org
  • Veica
    Veica Member Posts: 43
    Thank you Savatage!

    I'll let finance know how to apply the entries :D
  • David_Singleton
    David_Singleton Member Posts: 5,479
    Savatage wrote:
    The key is to use the same "balance account no." for both entries. they will balance out to zero and now the customer has the credit not the vendor.

    Am I the only one that sees it as unusual to apply a debit to a debit.

    (Vendor Credit memo = -ve) --> (Customer Invoice = -ve)

    how can a -ve balance out a -ve.

    Try it. Its the same as trying to apply a sales invoice to another sales invoice.

    as I said you need to talk to someone in Accounting and figure out exactly what it is they are trying to do and how they want it recorded on the accounts.
    David Singleton
  • Veica
    Veica Member Posts: 43
    Yes I know....I can't apply the customer's invoice to the vendor's credit memo both documents are negative! Finance just wants to clear the customer's invoice and the vendor's credit.
  • David_Singleton
    David_Singleton Member Posts: 5,479
    Veica wrote:
    Yes I know....I can't apply the customer's invoice to the vendor's credit memo both documents are negative! Finance just wants to clear the customer's invoice and the vendor's credit.


    So basically in accounting terms they want to take some liquid paper and remove the entries from the system. This can also be done in any accounting system, but you will get caught out in an audit. even in a manual system, eventually someone will figure that there is an imbalance between debits and credits.

    I still stand by my first post. This is not a Navision issue, it is an accounting/business issue that needs to be resolved as such.
    David Singleton
  • Savatage
    Savatage Member Posts: 7,142
    David Singleton wrote:
    Am I the only one that sees it as unusual to apply a debit to a debit.

    Hmm, I was thinking in terms of giving a credit to a customer and charging the vendor. :-k
    Harry Ruiz
    http://www.BiloBeauty.com
    http://www.autismspeaks.org
  • David_Singleton
    David_Singleton Member Posts: 5,479
    Savatage wrote:
    Sales Journal - add a credit memo to the customer
    Puchase journal Apply an Invoice to the Vendors Credit Memo to wipe out.

    am I missing something here.

    In my mind

    "credit memo to the customer" means I give money to the customer.
    "an Invoice to the Vendor" means I give money to the Vendor,

    in both cases money if going out of the company, so there is no plus minus to offset. One of us is missing something, but to be honest I am not sure now who is right and who is wrong.

    :-k
    David Singleton
  • Savatage
    Savatage Member Posts: 7,142
    you are right - In my previous post I mentioned a credit to the customer and then applying a credit to the vendor as if the vendor was covering the customers credit.

    but a credit to the customer and invoice to the vendor is a double loss.

    so now rethinking it - it has to made clear if that vendor expects to see you deduct that credit on your next check, if so then I would just make a credit to the customer only.

    vendor ->give you credit You give credit->customer
    Harry Ruiz
    http://www.BiloBeauty.com
    http://www.autismspeaks.org
  • Veica
    Veica Member Posts: 43
    Ok, I think we're going to do this the easy way. Since we will short pay the vendor for the credit amount he gave us, we will credit the customer and reference the vendor's credit.

    Thanks everyone for your help with this, hopefully the issue is closed :D

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