WebLink uses Adjustment Types as negative transactions to correct invoice line items or payment records. Whenever you create an Adjustment, WebLink Connect will ask you to identify the Adjustment Type. Most commonly, adjustments are used to write off invoices, apply discounts to invoices, or refund payments.
Follow these steps to create Adjustment Types:
- Go to Admin > Manage Codes > Revenue Codes > Adjustment Types. The Adjustment Type Codes window will open.
- Click New. The Selected Code fields will empty.
- Edit or enter the Adjustment Type name and description.
- Select the Accounting Package from the Accounting Package drop-down menu. If you don't have one here, you should close this window and create an Accounting Package first. Click here to learn how to create an Accounting Package.
Note: Adjustment Types can only be connected to one Accounting Package. If you manage multiple Accounting Packages, you will need a set of Adjustment Types for each one.
- Select the Debit and Credit Accounts this Payment Type should use from the drop-down menus. If you don't have one here, you should close this window and create an Account Codes first. Click here to learn how to create an Account Codes.
- Click Save.
About Reversing Entries
Most Adjustment Types can be marked as a Reversing Entry, which will inactivate the Credit and Debit Account Codes. If the Adjustment is a 'Reversing Entry,' that means it will simply reverse the Debit and Credit accounts listed on the Revenue Item or Payment Type that it is adjusting.
For example, if you write off an Invoice that used a Revenue Item for Directory Advertising that did this:
- Debiting Account # 11000-12 WebLink Receivables
- Crediting Account # 4003 Advertising Revenue
Then the Reversing Entry Adjustment would accomplish the following:
- Crediting Account # 11000-12 WebLink Receivables
- Debiting Account # 4003 Advertising Revenue
If the Adjustment Type is not a simple reversal, you can fill in the specific account to Debit and Credit when the adjustment is applied. You will need to reverse the Debit and Credit you want the system to use when applying the adjustment, because your adjustments will generally be negative amounts. When the posting screen goes to put the negative transaction into the journal entry, you will see the accounts properly reversed to debit the account in the Credit Account setting in the Adjustment Type, and credit the account in the Debit Account setting. This is so we can use a negative number to balance an account to $0, while also posting correctly to your accounting software.
NOTE: If all adjustments are simply Reversing Entries, you may only need a single Adjustment Type. However, keep in mind that you can run reports categorized by Adjustment Type, so you can set up as many separate Adjustment Types as you would like to see segmented and subtotaled for reporting purposes.