Guidance Needed on Reversing Sales Order and Payment

Question

Hello Guys,Back in December 2021, our client received a sales order and made a payment against it. However, despite receiving the payment, the order was not fulfilled or shipped. As a result, the payment was allocated to the order as a deposit.To rectify this situation, I am considering advising our client to reverse the payment allocation and subsequently reverse the sales order. I propose dating these reversals for the June 2024 Quarter to ensure they are captured accurately in our FY2024 balances.Before proceeding, I have a couple of questions:Upon the reversal of payment allocation, will this action result in the bank details becoming unreconciled? In other words, will the amount float in the bank feed until it is re-allocated or reconciled with a different transaction?When we reverse the sales order and payment, will this process generate a credit note similar to how it works with sales invoices?I appreciate your guidance on these matters, as it is crucial that we ensure the proper allocation of this payment to the succeeding invoices of the customer, so we are considering to code the allocated payment as "Credit Note" or if you have other advise, it will be fully appreciated. Thanks in advance

adminkirsty · Answer

Good luck!&nbsp; I really liked the ability to create a copy of data to test working theories in other software, but that isn't something MYOB permit, sadly.&nbsp;I hope it works out.&nbsp; If it does affect your year end inventory balance, what about doing a journal to correct it (reversing it in the appropriate period, if necessary)?&nbsp; At least that should be easier to delete, if it doesn't give the expected outcome!&nbsp;Sorry I couldn't be of more assistance.

adminkirsty · Answer

I was a little confused by the wording of your query, as to whether your client is the customer/purchaser or the seller...

I would have expected a credit note would have been the appropriate reverse mechanism for the sales order, and then either applying the deposit to a different sales order, or refunding/receiving the deposit.

This page has adjustment information for Customer entries, and a link to Purchaser entries, which should give you some assistance, depending on what version they are using.

https://www.myob.com/nz/support/myob-business/sales/customer-returns-credits-and-refunds

Sorry if I have only confused you... Good luck!

luckyrooh1 · Answer

Hi Kirsty,&nbsp;Apologies for the confusion.&nbsp;My Client is the seller.&nbsp;Following up on our previous discussions, just want to confirm if the following steps are correct if we reversed the Sales Order from 2021 with allocated payment.1. Reverse the Allocated PaymentFirst, should we reverse the payment that is currently allocated to the Sales Order. This involves:Reversing the Payment: Use the reverse function in MYOB to unallocate the payment from the Sales Order. Once we reversed the allocated payment, Does this means, The reversed payment will appear in the bank feed?2. Reverse the Sales OrderNext, we will reverse the Sales Order:Reversing the Sales Order: Locate the Sales Order in the system and reverse it.Were not sure if MYOB might automatically create a Credit Note once we reverse the Sales Order, or we may need to create one manually.3. Create a Credit Note (if needed)If the system does not automatically create a Credit Note upon reversing the Sales Order:Creating a Credit Note: Manually create a Credit Note for the amount of the reversed Sales Order. This will offset the original amount in accounts receivable.&nbsp;Thanks!

adminkirsty · Answer

Hi there,That method would not be one I would try in the first instance...&nbsp;I would be more inclined to try a process similar to the one outlined in the link I posted above, i.e. create a sale return, noting it as a cancelled order, using a minus amount to match the original order*, and then allocating that resulting account credit to the new order.*&nbsp; i,e,&nbsp; if the original order was for 5 widgets at $100, your sales return would be for -5 widgets @ $100, then "process the sales return" to apply the credit&nbsp;Is there a reason you prefer to reverse the existing allocations instead?&nbsp; Would this be to achieve a particular outcome (that I may be missing, sorry) or is this a method you have used previously elsewhere?&nbsp;Good luck!

luckyrooh1 · Answer

Hello,Thank you for your input.Our client is eager to close the floating Sales Order from 2021. We are concerned that deleting the Sales Order could affect the inventory balance in the Financial Statement. Therefore, we are considering reversing it.However, if we follow your suggestion and create a credit note, how can we ensure that the Sales Order is closed and does not appear anymore without affecting the inventory?Thank you for your guidance.

Forum Discussion

Guidance Needed on Reversing Sales Order and Payment

1. Reverse the Allocated Payment

2. Reverse the Sales Order

3. Create a Credit Note (if needed)

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