Sage 500 ERP Version 2014 has a new process available that greatly simplifies making corrections regardless how careful you might be when applying payments and memos, eventually someone will make a mistake and misapply a transaction. To correct this kind of error, you ended up adding credit memos and debit memos and applying them to reverse the effect of the misapplied transaction. There is a new task available in Accounts Receivable that makes it a one-step process to undo these miss posted transactions.
The incorrect applications are reversed and the original transaction is available to be applied correctly. All in one step. The new step is called reverse applications, and is found in “Accounts Receivable” > “Activities” > “Reverse Applications.” Let’s see how it works.
First, fill out the batch header with a batch number and a post date. Notice, there are two buttons to the right. One to reverse memo applications and one for payment applications. We are going to start with reversing a credit memo that was applied to these two invoices (109 and 108), but it was intended to be a correction for invoice 1114. 109 is closed and 108 has $215 applied to it from credit memo 1115. Let’s reverse the application of credit memo 1115.
First, we are going to look up our customer and find the memo which was misapplied. Identify which transactions we want to reverse – in this case we want to reverse both invoices. Post to register, and now we can go back to look at our BIE view, do a refresh, and we can see that our credit memo 1115 has a $5000 balance. The two original transactions where it was applied have now been reversed by two additional transactions. Invoices 108 and 109 are back to their full value and both are open.
Next, we want to look at reversing a payment. In this case we have a payment that was applied to the newest invoices for this customer instead of the oldest invoices. That is skewing our aging and management is complaining and wants it corrected. This one payment was applied to ten invoices, and we are going to reverse that so that it can be applied correctly.
Again, create a new batch, enter our post-date, select “Reverse Payment Applications”, identify the customer, find the item to reverse, and select all to reverse all the transactions. You can leave one or multiple unapplied or applied and not reversed. Register and post and then refresh your view. You can see that the cash receipt has unapplied $120,000. If we look at the details for this we’ll see that we had ten transactions originally, ten adjustments, and ten reversals of those applied transactions. That’s it! Simple, fast, powerful reverse applications is a terrific addition to Sage 500 ERP.