Receivables lets you reverse a receipt when your customer stops payment on a receipt or if a receipt comes from an account with insufficient funds. You can also reverse a receipt if you want to re-enter and reapply it in Receivables.
You can reverse these types of receipts:
Invoice-related receipts
Non-invoice related (miscellaneous) receipts
Credit Card refund (negative miscellaneous) receipts
Receipts that are part of a batch (use the Receipt Batches window to re-enter a receipt in a batch)
Receipts with unresolved claims that can be canceled (for users of Oracle Trade Management only)
Receipts that were applied to open receipts (provided that neither receipt is drawn negative by the reversal)
Receivables lets you create two types of receipt reversals:
Standard Reversal
Debit Memo Reversal
To view a list of reversed receipts, see: Reversed Receipts Report.
Note: After you reverse a receipt, you cannot update any of the receipt's attributes.
When you create a standard reversal, Receivables automatically creates reversal journal entries for your general ledger and reopens all of the debit and credit items that were closed with the original receipt.
You can create a standard reversal for a receipt that has applied transactions that are related to chargebacks, provided that there is no activity against the chargeback and the chargeback has not been posted to the general ledger. If the chargeback has been posted to the general ledger, then you must create a debit memo reversal (see below).
If you create a standard reversal for a receipt that you have applied, then Receivables reverses any adjustments or chargebacks that you created, as long as you have not posted these adjustments to your general ledger.
Debit memo reversals are used when you need to reverse a receipt, but you want to maintain the link between the billing activity and the payment. When you create a debit memo reversal, Receivables reverses the receipt, but does not update any of the receipt activity that is associated with the original receipt.
A debit memo reversal is different from a standard reversal because, instead of reopening the debit and credit items that were closed with the original receipt, Receivables creates one new receivable in the amount of the net of the closed debit and credit transactions. As a result, the reversed receipt shows the transaction as still applied.
You create a debit memo reversal by checking the Debit Memo Reversal check box in the Reverse window when you reverse a receipt. Do not check the Calculate check box on the transaction type for the debit memo reversal, because the tax was already accounted for on the original invoice. See: Transaction Types.
You must create a debit memo reversal if:
you are reversing a receipt from which you have created a chargeback and this chargeback has had activity against it (for example, another receipt, credit memo, or adjustment), or
you are reversing a receipt with a remitted credit card refund application.
you are reversing a receipt (Receipt A) that was applied to another receipt (Receipt B), if the reversal would draw Receipt B's balance negative.
Attention: You cannot create a debit memo reversal for a miscellaneous (non-invoice related) receipt.
When you create a debit memo for a receipt reversal, Receivables generates the line item from the predefined memo line. Receivables creates this line on the debit memo: Debit memo for reversal of payment &PAYMENT_NUMBER&, where &PAYMENT_NUMBER& represents the original receipt number.
The accounting for a debit memo reversal is automatically created, but Receivables does not use AutoAccounting as it does for a standard debit memo. See: Accounting for Debit Memo Reversals.
In addition, when you save the reversal, Receivables assigns a unique transaction number to the new debit memo. If the receipt that you are reversing uses a receipt method with the Debit Memo Inherit Receipt Number option set to Yes, then you can control whether the debit memo has the same transaction number as the original receipt. If the Debit Memo Inherit Receipt Number option is set to No, then Receivables uses the DM Reversal transaction source to determine the numbering for the debit memo reversal.
See: Receipt Methods for more information about the Debit Memo Inherit Receipt Number option. See: Transaction Batch Sources for more information on transaction numbering.
When you create a debit memo reversal, Receivables creates the accounting entries on the new debit memo transaction, rather than on the original receipt. This ensures that you do not make duplicate entries, and eliminates the need for a clearing account.
For a regular debit memo, AutoAccounting creates both the revenue and receivable accounts. But, for a debit memo reversal, AutoAccounting does not create the accounting entries on the new debit item. Instead, the receivable account defaults from the transaction type. The revenue account defaults from the cash account on the receipt. The GL cash account that defaults depends on the status of the receipt at the time when you create the debit memo reversal. For example, if the receipt was remitted, then the GL cash account is the same as the remitted account that is assigned to the receipt method of this receipt. See: Default Accounting for Transactions.
Receivables creates these two entries:
The first entry decreases the cash account.
Receivables already recognized revenue with the original invoice. To avoid overstating the cash and revenue accounts, Receivables does not create an additional entry to revenue. Instead, Receivables assigns the cash account to the revenue line on the debit memo.
The second entry creates the new receivable.
When you applied the original receipt, Receivables closed the invoices and their associated receivables. You must establish a new receivable, therefore, because you want to track this new debit item.
The receivable account defaults from the receivable account that was assigned to the predefined debit memo reversal transaction type.
Prerequisites
To reverse a receipt:
Navigate to the Receipts window.
Query the receipt to reverse.
Note: You can view the detail accounting lines for a receipt by choosing View Accounting from the Tools menu.
See: Viewing Accounting Lines.
To review the applications for this receipt, choose Apply.
To review the distributions for a miscellaneous receipt, choose the Distributions button.
Choose the Reverse button.
In the Date field, enter the date of this receipt reversal and the date to post this reversal to your general ledger. The default for the reversal and GL dates is the current date.
Receivables verifies that the GL date you enter for this reversal is in an open period. However, if the current date is not in an open period, then the default is the last date of the most recent open period.
You can change the reversal and GL dates, but the reversal date must be on or after the deposit date of the original receipt, and the reversal GL Date cannot be before the receipt GL Date or the reversal date.
In the Category field, enter the category for this reversal. Valid categories include Non-Sufficient Funds, Reverse Payment, and Stop Payment.
Note: Use the Reverse Payment category when the receipt has been incorrectly entered and you wish to re-enter it. Oracle Cash Management does not reconcile receipts that are reversed with this category, because this category is reserved for entry errors only.
If you are reversing a credit card refund miscellaneous receipt, then the Credit Card Refund Reversal category defaults into this field.
Note: The Credit Card Refund Reversal category displays only during credit card refund reversals.
In the Reason field, enter a reason for this receipt reversal. Typical reasons include Insufficient Funds, Account Closed, Wrong Amount, Wrong Customer, and Uncollectable.
To create a standard reversal, choose the Reverse button.
To create a debit memo reversal:
Check the Debit Memo Reversal check box, then enter a transaction type for this reversal in the Type field.
In the Account field, enter the account for this new receivable. The debit memo transaction type provides the default value for this field, but you can change it.
If you are using manual document numbering, enter a unique document number for this reversal in the Document Num field. Otherwise, Receivables assigns a number when you choose Reverse. See: Implementing Document Sequences.
Choose the Reverse button.