Hi,
We frequently have customer invoices that are overpaid, and we handle the overpayment through a credit write-off, recognizing it as income.
However, when we process the credit write-off for the overpaid amounts, the journal entry does not include the associated tax.
Typically, the journal entry only debits Accounts Receivable (AR) and credits the income account. How should we handle this situation if we need the tax to be properly accounted for as part of the credit write-off?
Best answer by mblassingame35
Yes, you could do a reclassification batch instead of a manual journal entry. There is no way to account for tax in a reason code. That is why I mentioned using a Business Event.
+4You could do a journal entry to move from income to tax or you could create a Business Event to do this for you. If the tax is a different percentages, it may be more difficult to do a Business Event as you would need to figure out when to use what percentage.
Hi
+4Yes, you could do a reclassification batch instead of a manual journal entry. There is no way to account for tax in a reason code. That is why I mentioned using a Business Event.
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