How to reverse a AR Deposit

Modified on Wed, 12 Feb at 3:10 PM

Overview

Reversing an AR deposit may be necessary if a payment was applied incorrectly or requires adjustment. This process involves identifying the original deposit, reviewing the associated journal entry, and recording a reversing journal entry to correct the transaction

Steps to Reverse an AR Deposit

1. Locate the AR Deposit

Navigate to the AR Inquiry program.
Search using either the Customer Number or the Invoice Number associated with the deposit.
Locate the deposit entry. Under the Journal column, note the journal number that was used for this deposit.

2. Review the Journal Entry

Open the GL Inquiry program.
Search by the journal name identified in the AR Deposit entry.
Review which accounts/invoices were affected by the deposit to confirm the correct transaction details.

3. Create a Reversing Journal Entry

Open the Journal Entry program.
Create a new journal entry with the same accounts used in the original deposit but reverse the amounts.
Include the associated Customer and Invoice # on the Accounts Receivable line of the journal.
Enter a description indicating that this journal entry is for reversing an AR deposit.
Post the journal entry to complete the reversal.

4. Verify the Reversal in AR Inquiry

Open the AR Inquiry program.
Search for the Customer Number or Invoice Number associated with the original deposit.
Verify that the reversal has been applied correctly and that the AR balance reflects the intended adjustment.