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If you've taken customer deposits for orders yet to be fulfilled, you'll need to enter these pre-conversion deposits.  

Reverse the invoice

Reversing the invoice will create a credit note for the total amount of the original order. To allow transactions to be reversed, you need to set a preference in your software. Then you can reverse the invoice.

To set the preference

1. Go to the Setup menu and choose Preferences.
2. Click the Security tab.
3. Select the option Transactions CAN'T be Changed; They Must be Reversed.
   
4. Click OK.

To reverse the invoice

1. Open the invoice you want to reverse. See Finding a transaction for instructions.
2. Go to the Edit menu and choose Reverse Sale. A new transaction containing corresponding negative amounts to that of the original transaction appears.

3. If you want, alter the date and memo.

   UI Text Box
   size medium type note
   If you're running on an accrual basis, ensure the date is set in the correct reporting period.

4. Click Record Reversal. A credit note will be created for the value of the reversed invoice.

Settle the credit (if refunding the deposit)

You can use the credit note created in the previous task to:

• settle the outstanding balance of the original invoice (minus the deposit amount), and
• refund the deposit.

Here's how: 

1. Go to the Sales command centre and click Sales Register.

2. Click the Returns and Credits tab.

3. Click to select the credit note created above, then click Apply to Sale. A list of open invoices appears.
4. Click to select the customer's original invoice. This invoice will have an outstanding balance of the original order amount minus the deposit.
5. Change the Credit Amount field to match the amount left owing on the invoice.
6. Click the Amount Applied column for the invoice. This will change the value to match the Credit Amount field.
7. Click Record. This settles the original invoice and leaves a credit balance equal to the value of the deposit.
8. Click to select the credit note again, then click Pay Refund.
9. Select the account from which you want to pay the deposit refund.
10. Click Record. This refunds the deposit component of the transaction, and settles the remaining credit.

Settle the credit (if not refunding the deposit)

If the deposit is non-refundable, you need to:

• create an invoice for the deposit amount (to account for the receipt of this money into business income), then
• apply the credit note to:
  • close the deposit invoice, and
  • settle the outstanding balance of the original invoice (minus the deposit amount)

Here's how:

Create an invoice for the deposit amount

When recording the invoice, use the following details:

• Use the Service layout.
• Select the same customer as the original invoice.
• Enter a Description which describes the transaction, such as Non-refundable deposit for order XXXX
• If you're running on an accrual basis, make sure the Date is in the correct reporting period.
• Enter the deposit amount.

Apply the credit note 

1. Go to the Sales command centre and click Sales Register.

2. Click the Returns and Credits tab.

3. Click to select the credit note for the reversed invoice, then click Apply to Sale.
4. Click to select the invoice you created for the deposit amount.
5. Change the Credit Amount field to match the deposit value.
6. Click the Amount Applied column for deposit invoice. This will change the value to match the Credit Amount field.
7. Click Record. This settles the deposit component of the transaction which is now considered business income.
8. Click to select the credit note again, then click Apply to Sale.
9. Click to select the customer's original invoice. This invoice will have an outstanding balance of the original order amount minus the deposit.
10. Click the Amount Applied column for the original invoice. The value will change to match the remaining balance of the credit note.
11. Click Record. The remaining credit is applied and the original invoice is closed.

<h2><i class="fa fa-comments"></i>&nbsp;&nbsp;Customer deposit FAQs</h2><br>

What if the order was paid in full and then cancelled?

If the order was paid in full, you can treat the payment the same as a deposit. You can then follow the steps above to:

1. Convert the order into an invoice.
2. Reverse the invoice to create a credit.
3. Settle the credit (based on whether or not the payment is refundable).

Why can't I find the deposit transaction, or it shows as a different amount to what I actually received?

If you recorded the deposit using Receive Payments, it's possible a value was entered as a finance charge. For help finding, deleting or reversing finance charges, see Finance charges paid by customers.

What is a 'Transfer from deposit' transaction?

When a deposit is paid for a sale, the deposit amount is typically posted to a liability account. When the sale order is converted to an invoice, AccountRight needs to transfer the deposit amount from the applicable account and post it to your trade debtors account. This will appear in your transaction journal as a Transfer from deposit.