You can reverse a note receivable in the Reverse Receipts window. You can reverse a note if it is delinquent, the note issuer has stopped payment, or if you want to return it to the issuer before the note maturity date. If a note is delinquent (for example, funds are not available on the note maturity date), you can either exchange or repurchase the note. To repurchase a note receivable, create a debit memo reversal.

When you create a debit memo reversal for a note receivable that was remitted, Receivables changes the note status to Delinquent.

When you create a debit memo reversal, Receivables does not update any of the receipt activity associated with the original receipt. The new debit memo reversal is actually a new receivable that replaces the item closed by the original note.

• Return: You can return a note to the issuer on or before the note maturity date. You can return a note by creating either a standard or a debit memo reversal.

• Exchange: You can replace a returned, delinquent, or repurchased note with a new note. You may want to do this if, for example, the note holder and the note issuer agree to send another note as an exchange. This is also called Renewing a note.

• Repurchase: You can repurchase a factored note that has reached its maturity date, but funds were not paid. Receivables assigns this status when you reverse a note and create a debit memo reversal, and the reversal date is after the note maturity date.

• Delinquent: You can reverse a remitted note that has reached its maturity date, but funds were not paid. Receivables assigns this status when you reverse a note and create a debit memo reversal, and the reversal date is after the note maturity date.

The procedure for reversing a note receivable is the same as for a cash receipt. This is true for both standard and debit memo reversals.

To return a note before its maturity date:

1. Navigate to the Reverse Receipts window.

2. Query the note to return.

3. Specify a Reversal Date that is on or before the note maturity date.

4. Create either a standard or debit memo reversal for this note. See: Reversing Receipts.

5. Save your work. Receivables assigns this note a status of Return.

To repurchase a delinquent, factored note:

1. Navigate to the Reverse Receipts window.

2. Query the note to repurchase.

3. Specify a Reversal Date that is after the note maturity date.

4. Create a debit memo reversal for this note. See: Reversing Receipts.

5. Save your work. Receivables assigns this note a status of Repurchase.

To reverse a delinquent, remitted note:

1. Navigate to the Reverse Receipts window.

2. Query the delinquent note.

3. Specify a Reversal Date that is after the note maturity date.

4. Create a debit memo reversal for this note. See: Reversing Receipts.

5. Save your work. Receivables assigns this note a status of Delinquent.

To exchange a note receivable:

1. Navigate to the Receipts window.

2. Enter a new note receivable. See: Creating a Note Receivable.

3. Apply the new note to the debit memo that was created when the note was returned, delinquent, or repurchased. Receivables assigns this note a status of Exchange.