Negative GLs as Invoice Credits

Negative GL entries allow you to apply vendor credits directly within an invoice, avoiding the separate credit memo process. This method is particularly useful when applying credits equal to the full invoice amount, when using electronic payment methods (ACH, VendorPay), or when applying one-time credits immediately. By adding a negative GL line item during invoice coding, you can apply the credit amount within the invoice, creating a complete audit trail on the check stub while avoiding payment validation errors that occur with $0 payments.

Contents

• When to Use Negative GL Entries
• Training Video
• How Negative GL Entries Work
• Apply Vendor Credits
• Invoice Total Calculation Example
• Troubleshooting

When to Use Negative GL Entries

Use negative GL entries to apply vendor credits in the following situations:

• Applying credit equal to the full invoice amount: This avoids the "Payment amount must be greater than zero" error that occurs when credits result in a $0 bank payment.
• Electronic payment methods (ACH, VendorPay): These payment types have strict validation rules that reject $0 payments.
• One-time credits used immediately: When you receive a credit that applies to a single invoice and will not be used across multiple invoices.
• Creating detailed audit trails: Negative GL entries show both the invoice and credit on the check stub for complete documentation.

Note: If you attempt to apply credit during the payment process and receive the error "Payment amount must be greater than zero. Received: 0.0000," use this negative GL entry method instead.

Training Video

How Negative GL Entries Work

When you receive a credit that you need to apply immediately to a single invoice, you can add a negative GL line item during invoice coding instead of creating a separate credit memo. This method saves time and creates a complete audit trail by showing both the invoice and credit on the check stub.

Apply Vendor Credits

To apply vendor credits using negative GL entries:

1. When coding your invoice, enter the full total of the invoice, not including the credit. This is the gross amount of the invoice before any discounts.
2. Add your GL line items as you normally would. These should add up to the gross amount of the invoice.
3. While still coding your invoice, add a new GL line item, select the same expense GL account to be credited, and enter your negative amount (for example, -$10.00).
4. Approve the invoice from Accounting > Approve Invoices.
   Important: You will not be able to approve the invoice from the Manager Complete Data Entry screen as it does not support approval of invoices with negative GL amounts.
5. Navigate to Accounting > Pay Invoices to view the negative GL amount in the Applied Credit column.
6. Process the payment as normal. You can still add credits from other sources.
   The check stub displays both the invoice and credit details.

Invoice Total Calculation Example

You receive an invoice for $100 with a 10% discount, so you only need to pay $90.

• Invoice Total = $100
• GL Items:
  • 55555 - GL 1 = $100
  • 55555 - GL 1 = ($10)

The system calculates the net payment of $90, and the check stub shows both the $100 invoice and the $10 credit for complete documentation.

Note: When using negative GL entries, the Invoice Total must equal the sum of all positive GL entries. Your GL amount and Invoice Total will not match, and this is expected.

Troubleshooting

Q: Why can't I approve the invoice from Manager Complete Data Entry?

A: When using negative GL entries, you must approve from Accounting > Approve Invoices. The Manager Complete Data Entry screen does not support approval of invoices with negative GL amounts.

Q: What if I already tried applying the credit during payment and received an error?

A: The invoice returns to the Pay Invoices screen as unpaid with the credit still available. Re-code the invoice using the negative GL entry method.

Q: Can I use this method with ACH or VendorPay?

A: Yes. This method is recommended for electronic payment types when applying credit equal to the full invoice amount, as it avoids the "$0 payment" validation error.

Q: Does the credit show on my check stub?

A: Yes. When you process the payment, the check stub displays both the invoice amount and the credit amount, providing a complete audit trail of the transaction.

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