Create an adjustment document

When you need to correct an amount of the document, you can manually create an adjustment document, such as a credit note, that will adjust the document amount and the amounts of recognition transactions of the deferred schedule generated for this document.

You can create a credit note with the deferral schedule to be generated either independently from the original document, or in accordance with the schedule generated for the original document. You process these approaches as follows:

  1. Create an adjusting document, and, in its detail lines, add items with the deferral codes assigned or add a deferral code in the Deferral code column in each line manually. This document will be processed by the system independently of the original one according to its own deferral schedule as described in About recognition of revenue and expenses
  2. Link the adjusting document to the deferral schedule generated for the original document (as described below), so that the adjusting amount is divided among the deferred portions of the original document.

You link an adjustment document to the deferral schedule of the original document while creating an adjustment document.
For a credit note, in the Sales invoices (AR301000) window, when you add an item that has a deferral code assigned, select the schedule of the original document in the Deferral schedule column.
For a purchase credit note, in the Purchase invoices (AP301000) window, when you add an item that have deferral code assigned, select the schedule in the Deferral schedule column.
Thus, the deferral schedule generated for the adjustment document is associated with the deferral schedule of the original document.

You can view the associated schedules on the Original schedules tab in the Deferral schedule (DR201500) window.

Consider an example demonstrating the two ways of processing a credit note: independently, and as linked to the original document's schedule.
This example explores revenue recognition for an invoice of €1000 that is dated April 1 and scheduled as follows:

  • April 1: Amount to be recognised now of €0
  • May 1: First instalment of €200
  • June 1: Second instalment of €200
  • July 1: Third instalment of €200
  • August 1: Fourth instalment of €200
  • September 1: Fifth instalment of €200

Suppose further that on June 15, an error on the €1000 invoice was detected, and a €180 credit note was created to adjust the invoice amount.
The credit note may be processed separately from the invoice, as an independent document (considered below in section I), or it may be linked to the original invoice to be processed according to the schedule of the original invoice (considered below in section II).

I. The credit note has not been linked to the original invoice.
It can be assigned to any deferral code available in the system (except a code with the By payment method specified).
For example: Assume that it was assigned the same deferral code as the original invoice had.
Thus, the credit note amount will be recognised in the following instalment:

  • July 15: Amount to be recognised now of €0
  • July 1: First instalment of €36
  • August 1: Second instalment of €36
  • September 1: Third instalment of €36
  • October 1: Fourth instalment of €36
  • November 1: Fifth instalment of €36

II. The credit note has been linked to the schedule of the original invoice.
On June 15, the invoice amount still to be recognised is €600, and recognition is planned through three future transactions.
The credit note amount will be divided among these three transactions as follows:

  • July 1: €60
  • August 1: €60
  • September 1: €60