Invoice Adjustment

In order to use the Invoice Adjustment functionality need to select either "Catch up" or "True up" option, which will than create adjustments to an invoiced/un-invoiced billing period if escalation or discount has been changed (added, updated or removed) to that billing period.

User can select the option in the parameters window and default to the Billing schedule header, where they can change the option as needed and roll down the changes to un-invoiced billing schedule lines.

Review the following example to better understand how the Invoice Adjustment functionality works.

Catch up

EXAMPLE 1:

Billing schedule line with the following details:

• Start date = 01/01/2023 End date = 12/31/2023, Frequency = Monthly, Quantity = 1 & Unit price = $250.

• Create an invoice for the first 3 billing periods.

• Enter an escalation with Start date = 01/01/2023, End date = 12/31/2023, Frequency = Monthly & Amount = $30.

• Instead of adding the total adjustment amount to the next un-invoiced period, the amount of each period is adjusted. Review the two cases below:

CASE 1: Invoiced Billing periods

• New Sales Order is created containing the lines for each adjusted period with corresponding adjustment amount. Based on the example above first 3 billing periods are adjusted with amounts as shown below:

  January : $30

  February : $60

  March : $90

• Both the Audit and Price adjustment tab on View billing detail -> Line details for the first 3 periods will be updated.

CASE 2: Billed Billing periods ( Sales order not invoiced )

• Adjusted periods are added to the existing Sales Order. As per above example the existing Sales Order will have 3 lines added to it

  January : $30

  February : $60

  March : $90

• Both the Audit and Price adjustment tab on View billing detail -> Line details for the first 3 periods will be updated.

True up

EXAMPLE 1:

Billing schedule line with the following details:

• Start date = 01/01/2023 End date = 12/31/2023, Frequency = Monthly, Quantity = 1 & Unit price = $250.

• Create an invoice for the first 3 billing periods.

• Enter an escalation with Start date = 01/01/2023, End date = 04/30/2023, Frequency = Monthly & Amount = $30.

• The lines should have been January $280, February $310, March $340 and April $370. For a total of $1,300. But since, only $750 has been invoiced.

• On the View billing detail the adjustment happens to the first un-invoiced period i.e the unit price becomes $550 for that period.

• On the Price adjustment tab the breakdown can be verified as below:

  January : $30

  February : $60

  March : $90

Note:

Deferral: If a schedule line is deferred and invoice adjustment is made, the adjustment line in the sales order would have its corresponding deferral schedule.

For example:

Original amount of $1,200. Deferral schedule A will be created as normal for $1,200. And then an adjustment of $120 is made, Deferral schedule B will be created for $120 and will be shown in the Deferral tab.

Consolidation: Consolidate by item will not apply to billing lines with Invoice adjustment method set to “Catch up”. Billing lines cannot be consolidated into the same Sales order line.

Posting: Partial invoicing is not supported that is Sales order line with quantity of 2, the line should be invoiced with quantity of 2, not just 1.

Multiple element revenue allocation: Invoice Adjustment for True up method is supported , but Catch up is not supported.

Revenue split: Invoice Adjustment is not supported for revenue split items.