This page describes the process of entering sales as credit losses and the adjustment of credit losses in situations where the payment will not be received for the invoice.
Entering credit losses
1. When sales are entered as credit losses, the invoice should be removed from open invoices and accounts receivable.
2. In order to create a credit note for the sales invoice to be entered as a credit loss, go to the original sales invoice’s Invoice view and press Edit > Create a credit note. Check the invoice information and make any required changes, for example, to the date or invoice channel.
- If you don’t want to send the credit note when entering it as a credit loss, the invoice channel can be set as No sending.
3. When approving the credit note set the statuses of both invoices (the original sales invoice and credit note) as Paid elsewhere on the same date. The payment date will be the current date as a default, but it can be edited if needed. Select Credit loss as the payment method and click Continue.
4. Go to the credit note’s Accounting-page and change the default sales entry into the credit loss account.
- The credit note will reduce the payable amount of VAT summary as much as the payable VAT was for the original invoice.
5. After these steps the invoice will be:
- removed from the open invoices
- settled from accounts receivable
- entered as credit loss
Instead of creating a credit note, the credit loss can also be entered as a journal receipt. In this case, the original sales invoice will also be marked as Paid elsewhere.
Adjusting credit losses
- If a payment is received for an invoice that has been entered as a credit loss, a new sales invoice must be created and adjusted the credit loss entry. The new sales invoice is created for the credit loss adjustment to be entered correctly as sales VAT.
- The new sales invoice can be created by copying the original sales invoice by choosing Edit > Copy in the Invoice view of the original sales invoice.
- When the new sales invoice has been created the received payment can be allocated to the sales invoice either with the Edit reference payment function (if the payment has been received with reference code) or through Bank statement allocation (if the payment has been received without reference code).
- Alternatively, the sales invoice can be marked as paid through the invoice’s Special situations view by choosing Add payment transaction.
- In the accounting page of the sales invoice the default sales entry should be changed into the credit loss account. This way the credit loss entered with the credit note will be corrected.