What's a difference between a Credit Memo and Invoice that Credit AR

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Posted on by alexduy

355

Instead of creating a Credit Memo in the AR Module, my AR Manager sometimes
create an Invoice, and instead of Debit AR when creating an invoice, she credits
the AR account, making it looks like a Credit Memo. Will doing this mess up the AR GL account vs the Aging? Please
advise.

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alexduy 355 on at

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RE: What's a difference between a Credit Memo and Invoice that Credit AR

I mean debit back the revenue
alexduy 355 on at

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RE: What's a difference between a Credit Memo and Invoice that Credit AR

We use project accounting and I believe the reason why she is doing that is because she wants to be able to credit back the revenue to the right project number?
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MichaelC 1,761 on at

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RE: What's a difference between a Credit Memo and Invoice that Credit AR

If I recall correctly, you can't do a negative invoice, so you would be changing the posting accounts and possibly maybe switching distribution types in the distributions window. From a GL basis, it would account correctly, but a couple observations:

1. Wouldn't you still end up with a positive invoice?

2. I would recommend using a credit memo because this can be applied to an existing document.

3. From a GL > AR reconciliation basis...you might run into an issue there. I would check that. On the Gl it would be correct, but your open AR maybe overstated by double since it's in the opposite direction.