What to do when a Bank Deposit has been reconciled, but includes incorrectly applied Cash Receipts in Dynamics GP
A GP User recently contacted me for support regarding a Bank Deposit that needed to be voided. The problem was that a Cash Receipt had been recorded for one customer, but actually included payments for multiple customers. (Note: This was not a true Parent:Child Customer relationship.)
Unfortunately, this Bank Deposit had been ‘cleared’ via Bank Reconciliation already, so there was no way to void it. Sorry - GP doesn’t allow that.
So, what to do? Her bank balance was correct. Her Accounts Receivable GL Balance was correct, but the individual customer balances were wrong.
Here is a detailed example of the problem and the work-around we used to fix it:
Problem: A $6,000 Bank Deposit on 1/16/2012 included the following Cash Receipts:
- $1,000 from customer ABC01
- $2,000 from customer DEF01
- $3,000 from customer GHI01
The total of $6,000 was correct, and the Bank Reconciliation process went smooth as can be.
The Cash Receipt from customer GHI01 was actually supposed to be split between two customers - $2,000 for GHI01 and $1,000 for JKL01.
The steps we took to correct are as follows:
- 1) Enter a Debit Memo for customer GHI01 for the amount that was incorrectly applied. In this example, the $1,000 intended for JKL01 is the amount used in the Debit Memo. This increases the amount GHI01 owes back to the correct amount. The GL Distributions are: DR Accounts Receivable, CR Sales
- 2) Enter a Credit Memo for customer JKL01 for the amount that was supposed to be applied to their account. Again, this is the $1,000 that inadvertently went to GHI01. This decreases the amount JKL01 owes, down to the correct amount. The GL Distributions are: DR Sales, CR Accounts Receivable.
- 3) The net GL Distributions are zeroed out. We debited then credited the A/R account for $1,000, and we credited then debited the Sales account for $1,000. Net effect: $0.00. The Receivables Bath Entry window will show 2 transactions with a Batch Total of $2,000 - the absolute value of the batch.
This process corrected the customer balances, did not touch the Checkbook, and had no effect on the GL balances.