How To Apply One AR Invoice Against Another Using a Journal Entry

Overview

Use this procedure to move an existing AR invoice to another open invoice. 

The journal entry uses the Accounts Receivable GL account on both lines:

• One line removes the credit from its current invoice.
• The second line applies the credit to the intended invoice.
• The amounts are equal and opposite, so the journal balances to zero.

Important: The example below applies a credit or negative balance against a debit or positive balance for the same customer. This process can be followed to move an AR Invoice to another customer account as well. 

Before You Begin

In AR Inquiry, confirm the following:

• You know the AR GL account associated with the invoices.
• Both invoice numbers are valid in Evolution.

The Journal Entry screen requires an invoice number for an AR detail and validates the entered number.

Example

A customer has the following balances:

After applying $500.00:

• Invoice 10001CR will have a zero balance.
• Invoice 10025 will have a remaining balance of $250.00.

Steps

1. Create the Journal

   1. Open Accounting > Journal Entry.
   2. Enter a journal name, or click Next Journal #.
   3. Select the appropriate Effective Date.
   4. Click Add to create the journal header.

2. Remove the Credit from Its Current Invoice

   Enter the first journal detail line:

   Account

   The appropriate Accounts Receivable GL account

   Amount

   A positive amount equal to the credit being moved
   Example: 500.00

   Customer #

   The customer number

   Invoice #

   The invoice currently holding the credit
   Example: 10001CR

   Description

   For example: Move credit to invoice 10025

   Click the plus sign to add the detail line.

3. Apply the Credit to the Destination Invoice

   Enter the second journal detail line:

   Account

   The same Accounts Receivable GL account

   Amount

   The same amount entered as a negative value
   Example: -500.00

   Customer #

   The same customer number

   Invoice #

   The open invoice receiving the credit
   Example: 10025

   Description

   For example: Apply credit from invoice 10001CR

   Click the plus sign to add the detail line.

4. Review and Post

   Confirm the following:

   • Both lines use the correct AR account.
   • Both lines use the correct customer.
   • Each line references the intended invoice.
   • The amounts are equal and opposite.
   • The journal is in balance.

5. Once the journal is balanced, click Post, and confirm the posting when prompted.