The schedule for any invoice line can be cancelled/reversed at any time, from the invoice details page using the "cancel" buttons in each schedule item's OPS column (shown below).
- Invoices can be voided in the accounting system after a schedule has been created in Flowrev. On invoice void, the user should also cancel/reverse the recognition schedule.
- Sometimes users may also need to cancel and re-do schedules because over time the original schedule may not be what is desired e.g. if the service dates with the customer changes.
When cancelled, schedule elements, that is the deferrals and recognitions, which are "Pending sync" to the accounting system are cancelled locally within Flowrev, and will not be syncd to the accounting system.
Schedule elements that have already been "Syncd" within their respective accounting periods will need to be reversed. When a user cancels the schedule, Flowrev will generate a reversal transaction. Once these reversal transcations are themselves syncd they will reverse prior syncs of the schedule being cancelled.
We released the cancel process, described below on Feb 29, 2016. Schedules cancelled prior to this date may look different from what is shown and described below. In summary, the old cancel process would enter reversals (for both syncd deferral and recognition) on the date of cancel, which users could then edit prior to sync. And it entered all recognition reversals in one aggregated lump sum.
To illustrate, we'll use the invoice line schedule shown below. Prior to any cancellation, we see that only parts of the invoice line's schedule has been syncd (dark blue elements)
If the schedule is now cancelled using the top-most "Trash->" button (if only part of the schedule were to be cancelled, one would use a "lower" down cancel button), the result will look like the below.
The pending sync elements of the schedule are now marked as Cancelled [ban symbol] and will no longer be syncd.
The syncd elements of the schedule are now marked as Reversed [X] (but pending sync) and the reversal transaction is shown in the panel titled "deferrals and recognition reversals." The full amount of the deferral was syncd, and is in the reversal transaction. Only the syncd part of the recognitions are in the reversal. The date of each reversal transaction is the date of the original schedule element being reversed.
The org's period lock date may allow Flowrev to only enter a DRAFT manual journal, in which case the user will have to approve/POST the draft journal in their accounting system prior to the reversal being completely syncd / effective.
It is good practice to run update selected from the Org page prior to sync schedule, with "Organisation" checked so Flowrev has the latest period lock date, and can enter DRAFT journals accordingly.
The below is only relevant for Xero and the credit note handling process prior to April 2017 - Xero users applied the credit notes to the invoice in Xero, and thereafter optionally applied the credit amount to the line schedule in Flowrev.
After April 2017, Xero users create a schedule for credit notes lines. QBO users always create schedules for credit note lines.
The journals for the old Xero credit note process - i.e. applying it to line schedules - are shown below:
The Xero scenario is an invoice with $300 line amount mapped to a revenue account, for which a 3-month recognition schedule has been created. The deferral of $300 and one month recognition of $100 (both in July 2015) have been syncd to the accounting system. Two recognitions within the schedule (Aug, Sept 2015) are pending sync, when a credit note for the full $300 is issued in August, 2015:
Note that only $100 i.e. one of the schedule recognitions within the 3 for the service period of 7/1/15 - 9/30/15, or $100/mo, is reversed as only that one recognition was syncd. By cancelling the schedule, the impact to revenue in July and August is limited to transaction difference ($300 higher revenue in July, $300 lower revenue in August), and journals Flowrev enters are reversed/nulled out.