How to Offset an Open Invoice and Open Credit Memo in the AP Open Item File

Release: 11/30/2022
Version: 7.x & Up

Accounts Payable has an Open Item file that contains all the vouchers, checks, credit memos, and adjustments.  AP does not have a reapply utility like Accounts Receivable, so you are unable to reapply an open credit memo to a voucher when there is no check to print.  In the example below, credit memo 1526CM needs to be applied to invoice 1526 for $7,450.86.

Even though the vendor balance is $0.00, the open items still print on the A/P Open Item Report.  Another way to offset the credit memo and invoice is to use the Manual Payment function in AP Open Item Adjustments to pay the invoice (positive) with the credit memo (negative) in the same batch.  This will mark the records as “fully paid.”  In AP, Processing, AP Open Item Adjustments, and Add, select Trx Type “M” (Manual Payment).  Enter the invoice as you normally would, but give the check number a special value (i.e., 99).

Now create a manual payment for the credit memo.  The check number should be 99, same as the invoice payment, and the payment amount should be negative (-7.405.86) as well.

Make sure Check-Totals is $0.00 on the A/P Open Item Adjustment Edit List.  This is very important.

Post the transactions in Post Adjustment Transactions in AP Processing.  Print the Manual Payment Register in AP Report to verify the transactions posted.  Print the AP Open Item Report to make sure the offset is successful.

MAD

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