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Reverse Invoice

Technical Blog Post


Abstract

Reverse Invoice

Body

Many of us who has been working with Financial (FI) accounting systems knows when an invoice transaction saved in the FI system, it automatically post account entries to a General Ledger in response to the entries being saved in the financial accounting systems. Occasionally, an invoice produced by a financial accounting system may need to be reversed or removed from financial records within the General Ledgers (e.g., in case of an error without performing the return of the goods, etc.). In order to accomplish reversal of the invoice, a user may generate a reverse invoice for processing by the financial accounting system. The reverse invoice includes a transaction that effectively modifies or nullifies the transaction of the produced invoice within the financial records of the General Ledger. The reverse invoice is similarly posted automatically to the General Ledger in response to the reverse invoice being entered and saved in the financial accounting system. When the reverse invoice contains an error or is erroneously directed to the wrong invoice, several accounting entries typically need to be generated in order to correct this error within the financial records of the General Ledger. Which contains many of accounting entries to make correction for when reversed wrong invoice.

Starting Maximo 7.5 released, the Maximo included the 'Reverse Invoice' functionality in Invoice application. This new Reverse Invoice has an option to automatically posted to the General Ledger or 'Stage Reverse Invoice'. This new option of 'Stage Reverse Invoice' provides a double check the transaction prior to approve the transaction to record in the financial system.

This multiple stage process enables creation of a reverse invoice, and provides a user with an intermediate stage to enable cancellation of the reverse invoice prior to posting of account entries corresponding to the reverse invoice within the financial computer system. If a correct invoice is selected to be reversed, a corresponding reverse invoice is approved and processed, and transactions corresponding to the reverse invoice are posted by the financial computer system to the General Ledger.

However, in the case where a wrong invoice is selected for reversal, the intermediate stage avoids the need to generate and process additional accounting entries to correct the effects of the erroneous reverse invoice within the financial records of the General Ledger. Basically, when a user enters a reverse invoice, the user has the option to select a status for the reverse invoice (e.g., a “Pending Reverse” status) that enables the user to later selectively approve or cancel the entered reverse invoice. Thus, the reverse invoice may be canceled prior to posting to the General Ledger. This reduces the complexity of maintaining accounting journals, and obviates the need for the user to create a new invoice when a wrong invoice has been reversed.

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ibm11134729