Corrections and AdjustmentsLesson 6

Correcting Actual Income of Projects

Back to P200: Project Accounting Extended Scenarios

Lesson 6: Correcting Actual Income of Projects

Part 3: Corrections and Adjustments

In Acumatica ERP, you can create a credit memo for a project during the project billing.

Learning Objectives

In this lesson, you will learn how to create a credit memo for a project.

Applicable Scenarios

You create a credit memo for a project if you need to correct the actual amounts of the revenue budget that have been exceeded.

Project Invoice Correction: Credit Memos for Projects

To correct the actual amounts of a project that has been overcharged during the previous billing, you can create a credit memo for a project, either manually or during the project billing procedure.

Project Billing with Credit Memo

If on the Summary tab of the Projects (PM301000) form, the Create Pro Forma Invoice on Billing check box is selected for the project, the system creates a credit memo on release of the pro forma invoice if the total amount of the pro forma invoice is negative. During the billing of each processed project, the system creates a credit memo on the Invoices and Memos (AR301000) form if both of the following conditions are met for the project on the Projects form:

  • On the Summary tab, the Create Pro Forma Invoice on Billing check box is cleared.
  • The project has a negative Pending Invoice Amount Total on the Revenue Budget tab.

Credit Terms in Credit Memos

The system fills in the credit terms for the credit memo as follows:

  • If the project has credit terms specified in the Terms box on the Summary tab of the Projects (PM301000) form and the Use Credit Terms in Credit Memos check box is selected on the Accounts Receivable Preferences (AR101000) form, the terms are copied from the project to the credit memo.
  • If the Terms box is empty for the project and the Use Credit Terms in Credit Memos check box is selected on the Accounts Receivable Preferences form, the terms are copied from the customer's settings to the credit memo.
  • If the Use Credit Terms in Credit Memos check box is cleared on the Accounts Receivable Preferences form, the Terms box of the Invoices and Memos (AR301000) form is empty for the credit memo. For details on the calculation of cash discounts in the generated documents, see Setup and Calculation of Cash Discounts.

Project Invoice Correction: To Prepare a Credit Memo for a Project

In this activity, you will correct the actual amounts of a project that has been overcharged during the billing. To do this, you will create a credit memo for the project.

Story

Suppose that the Thai Food Restaurant customer recently ordered eight hours of training on how to use a juicer it had previously bought from the SweetLife Fruits & Jams company. SweetLife's project accountant created a project for this training, a consultant of SweetLife provided the training, and the project accountant billed the customer. Further suppose that the project accountant has realized that the consultant provided six hours of training instead of eight, so the company overcharged the customer by $100. Acting as the project accountant, you need to correct the actual amount of the project and create a credit memo for the project.

Configuration Overview

In the U100 dataset, the following tasks have been performed to support this activity:

  • On the Enable/Disable Features (CS100000) form, the Project Accounting feature has been enabled to provide support for the project accounting functionality.
  • On the Projects (PM301000) form, the TOMYUM11 project has been created and the TRAINING project task has been created for the project. On the Summary tab (Billing and Allocation Settings section), the Create Pro Forma Invoice on Billing check box has been selected for the project.
  • For the project, the 000004 pro forma invoice and the corresponding 000075 accounts receivable invoice have been created and released on the Pro Forma Invoices (PM307000) and Invoices and Memos (AR301000) forms, respectively.

Process Overview

In this activity, on the Projects (PM301000) form, you will update the pending invoice amount of the project with a negative amount and run project billing to prepare a pro forma invoice. On the Pro Forma Invoices (PM307000) form, you will review the pro forma invoice and release it. You will then review the credit memo that was created based on the pro forma invoice and release the credit memo on the Invoices and Memos (AR301000) form.

Step: Creating a Credit Memo for the Project To create a credit memo for the extra $100 that was billed for the project, do the following:

  1. On the Projects (PM301000) form, open the TOMYUM11 project. In the Summary area, notice that the actual income of the project is $400.
  2. On the Revenue Budget tab, enter –100 as the Pending Invoice Amount of the only revenue budget line that you are going to correct.
  3. Save your changes to the project.
  4. On the form toolbar, click Run Billing. The system creates a pro forma invoice and opens it on the Pro Forma Invoices (PM307000) form. In the Summary area, notice that the Invoice Total is negative and equals the amount you have specified for the revenue budget line of the project (–100.00).
  5. On the form toolbar, click Remove Hold to assign the pro forma invoice the Open status, and then click Release to release the pro forma invoice. The system assigns the Closed status to the pro forma invoice. The Invoice Total of a pro forma invoice on the Pro Forma Invoices form was negative, so the system creates an accounts receivable credit memo when the pro forma invoice was released.
  6. On the Financial tab, click the AR Ref. Nbr. link to open the credit memo that has been created for the pro forma invoice.
  7. On the form toolbar of the Invoices and Memos (AR301000) form, which opens, click Remove Hold to assign the credit memo the Balanced status, and then click Release to release the credit memo.
  8. On the Projects form, open the TOMYUM11 project and press Esc to refresh the form. In the Summary area, notice that the actual income of the project, which has been updated as a result of the billing, is $300. On the Invoices tab, notice that the credit memo with the corresponding pro forma invoice has appeared in the table, as shown in the following screenshot.
    Figure: The credit memo created for the project

You have adjusted the overcharged actual income in the project. Part 4: Billing Rates and WIP Costs | 48