Once an invoice is closed, the invoice amount cannot be adjusted by editing the invoice itself. If the balance of a closed invoice is incorrect, a credit note can be created to credit an overcharged amount or another invoice can be generated to invoice an undercharged amount.
Credit notes and adjusted invoices can be created to credit or adjust the balance of a closed invoice in the following ways:
by processing an adjustment timesheet in an invoice batch (for timesheet-based invoices only)
by using the Credit Rebill process
by creating a manual credit note to credit a manual invoice
by creating an ad-hoc manual credit note.
Each of these methods is described below.
Processing an Adjustment in an Invoice Batch
The Invoice Batch process, which creates timesheet-based invoices automatically, creates credit notes or bundles invoice items into a consolidated invoice automatically based on adjustment timesheets that are processed as part of an invoice batch.
Whether the Invoice Batch process creates a credit note or consolidates the adjusted items onto an invoice depends on the adjustment type (positive or negative) and how your system is configured to handle each adjustment type. This can be configured differently for each billing company.
Where an adjustment timesheet has been created to adjust items on an original timesheet but the original timesheet is yet to be invoiced, the Invoice Batch process ignores the original timesheet and invoices the adjustment timesheet only. In such cases, a credit note is not generated because the resulting invoice is already adjusted according to the information on the adjustment timesheet.
Using the Credit Rebill Process
The Credit Rebill process creates a credit note automatically to credit the balance of a timesheet-based invoice, thereby negating the invoice. It then creates a new, adjusted invoice that is then distributed to a debtor.
This method prevents the need for the debtor having to pay the original invoice only to be credited or invoiced an additional amount in relation to that original invoice. Instead, the original invoice can be ignored and the debtor simply pays the new invoice, which has been adjusted accordingly.
Creating a Manual Credit Note to Credit a Manual Invoice
Where it is necessary to credit an amount against a closed manual invoice, a manual credit note can be created against the original invoice. The resulting manual credit note is linked to the original invoice to allow ease of reconciliation of the credit amount against the original invoice amount.
To create a credit note to credit a closed manual invoice you must specify the following information:
credit note type account group credit note terms
credit items billing contact invoice message tax message
credit note reason.
The credit note type account group determines the general ledger account that will be affected by the credit note. For example, for accounting and reporting purposes the agency may maintain different accounts for supply of white collar and blue collar labour respectively. Depending on which group is selected, the relevant account will be debited when the credit note is paid out.
The credit note terms determine the payment terms that will apply to the credit note and how the payment terms are displayed on the credit note.
The billing contact identifies the agency staff member who acts as a contact person for the debtor regarding the credit note.
The credit items are one or more items for which the client is being credited. The credit items that can be added to a credit note are determined by the manual bill codes that are configured in the Rates and Rules application. For each credit item that is added to a credit note, you must specify the corresponding job order to which credit item corresponds. Each credit note can include multiple credit items, with
each credit item referencing one or more job orders.
The invoice message determines the billing company or client specific communication to be printed at the bottom of the credit note. The invoice messages are predefined and you can choose the relevant message from a list of options.
The tax message determines which tax exemption or non-exemption message will be printed on the credit note, if any. If tax messages have been configured and the job order being credited has been flagged as being tax exempt, you can select a tax exemption message that is to be printed on the credit note. If the job order is not tax exempt, you can select a tax non-exemption that is to be printed on the credit note.
The credit note reason identifies the reason for the invoice being credited. The credit reasons are predefined and you can choose the relevant credit reason from a list of options.
Once the manual credit note has been created, it can be saved or closed. Saving the credit note allows it to be edited prior to being distributed or to be deleted if necessary. Closing a credit note flags the credit note as ready to be distributed to the debtor and allows it to be selected via the Delivery screen. However, the credit note cannot be edited or deleted once it is closed.
Adjustments to Manual Invoices
Creating Ad-hoc Manual Credit Notes
Under some circumstances, it may be necessary to force a credit through the system to balance invoice and credit amounts. In such situations, an ad-hoc manual credit note can be created.
The ability to create ad-hoc manual credit notes is not designed as a day-to-day means of creating credit notes; it is designed to cater for exceptional situations. Because ad-hoc manual credit notes are not linked to original invoices, reconciliation of such credit notes against invoice amounts can be difficult if a large number of such credit notes are created.
To create an ad-hoc manual credit note, you must specify the following information:
credit note type account group
credit note terms
credit items billing contact invoice message tax message
credit note reason.
For more information about these attributes, see Creating a Manual Credit Note to Credit a Manual Invoice above. In addition to the attributes listed above, you must also select the relevant debtor and billing company.
The debtor identifies the legal entity responsible for paying invoices for candidates and services provided by the agency. For example, if the client belongs to a parent company and the parent company pays all labour hire costs for companies that it owns, the debtor could be the client's parent company.
A billing company defines the legal entity within a recruitment agency that issues a credit note. For example, if the agency belongs to a parent company and the parent company issues and processes credit notes on behalf of the agencies it owns, the billing company may be the parent company to which the agency belongs.