Compound Adjustments

Some situations requiring adjustments cannot be made with a single adjustment. Most of these situations are the result of either a misapplied payment or an NSF check from a customer. In these cases, where G/L hits have already occurred, the original transactions cannot simply be reversed or deleted. Compound, or multiple, adjustments must be used to correct the account(s) involved.

Example 1

A payment was applied to the wrong account. To apply the payment to the correct account, it is not possible to simply select a new account number for a saved adjustment and have the correct G/L hits created. As a result, two adjustments must be created:

  1. Adjust the misapplied payment off the incorrect account.
  2. Adjust the payment on to the correct account.

Example 2

Account A owes $50. A payment of $75 from Account B is mistakenly applied to Account A. Account A now has a $25 overpayment. Three adjustments must be created to resolve this, placing the amounts in the correct charge categories and creating the correct G/L hits:

  1. Adjust the overpayment off of Account A.
  2. Adjust the payment off of Account A.
  3. Adjust the total amount as a payment onto Account B.

Several key rules apply to processing compound adjustments to maintain the integrity of the process:

  • If one adjustment is deleted, any other adjustment that is part of the compound adjustment is also deleted.
  • All of the adjustments in a compound adjustment must be posted together.
  • Two users cannot enter adjustments to the same account. This restriction in particular maintains posting integrity; the user who posts the adjustments must be aware of all of the adjustments that comprise the compound.