If your accountant wants you to maintain a strict record of all your accounting entries, you should reverse a transaction rather than change or delete it.
A reversal transaction is a new transaction that replicates the original transaction, but with debit amounts shown as credit amounts and vice versa. After posting a reversal transaction, you have two transactions (the original and the reversal), but the account balances appear as if the original transaction was never posted.
A reversal transaction is automatically posted to the same account for the same amount as the original transaction. You cannot change the amount or account of a reversal transaction.
Before you can reverse a transaction
You can only reverse a transaction if it is unchangeable. An unchangeable transaction is identified by a grey zoom arrow next to it. To make your transactions unchangeable, select the Transactions CAN'T be Changed; They Must be Reversed option (Setup > Preferences > Security tab). If your user role allows you to change preferences, you can change this option at any time.
Reversing a transaction can affect closed periods
When you reverse a transaction, be aware of the transaction date you enter:'
- If you use the current date when you reverse a transaction from a prior month, the month-end financials for the prior month will not reflect the reversal transaction.
- If you use the original date for the reversal transaction, your prior month’s financials should be reprinted because they will have changed.
- If the original transaction date falls in a prior GST period, recording the transaction on the original date may affect the GST reportable in that period.
- If the original transaction date falls in a closed financial year, you'll need to date the reversal in your current financial year.
Negative inventory (Not Basics)
You cannot reverse a purchase if it will result in a negative on-hand inventory count.
If you reverse a reconciled transaction, your bank reconciliation will be out of balance. If you want to reverse a reconciled transaction, you need to undo the bank reconciliation first, then reverse the entry and re-reconcile the account. See Reconciliation problems.
Customer and supplier payments
If an early payment discount was applied to a sale, or to a purchase (Not Basics), you also need to reverse the discount. For information about how to find a transaction, see Finding a transaction.
Find the transaction you want to reverse. See Finding a transaction for instructions.
Go to the Edit menu and choose Reverse [...]. For example, if you want to reverse a sale, choose Reverse Sale. A new transaction containing corresponding negative amounts to that of the original transaction appears.
If you want, alter the date and memo. Note that you can’t change the accounts and amounts.
Before you record this transaction, you can use the recap transaction feature to view the journal entries that will be created when the transaction is recorded. To recap, choose Recap Transaction from the Edit menu.
- Click Record Reversal to record the reversal transaction. The transaction is reversed and all account balances are returned to their previous levels.
If you need to delete a reversed transaction, you'll first need to deselect the option Transactions CAN'T be Changed; They Must be Reversed option (Setup > Preferences > Security tab).
You can then find the reversed transaction, open it, then go to the Edit menu and choose Delete.