When a credit transaction is final billed and updated, it will first apply to any applicable work-in-process included on the statement being processed. Then, if there is still a credit amount to apply, it will automatically apply toward any outstanding amount due for that timekeeper or cost type. If there is no applicable amount due, then the following will occur during the Update Statements process:

  1. Previous payment amounts that applied toward the credit’s timekeeper or cost type are reversed, beginning with the most recent applicable payment.
  2. The credit is applied.
  3. The payment is reapplied.

The date of the payment unallocation and reallocation will be the statement date.

The following are technical notes regarding this process.

Update Statements

When updating a statement that reverses a payment in order for a credit to apply, the date of payment reversal and reapplication is the payment date or the date of the statement being updated, whichever is more recent.

GL

When a payment is reversed and reapplied, entries are posted to General Ledger (GL). For the payment reversal, the current GLS Payment Integration settings will be used to determine which credit account(s) to post to and the unapplied payments account will be used for the debit entry. For the payment reapplication, the current GLS Payment Integration settings will be used for both the credit and debit accounts.

AP

When costs created in AP have been included on an updated statement, and payments and/or credits have been entered that allocate enough to bring the costs due to zero, then all AP invoices with linked costs on that statement will be shown as “Paid” on AP Reports that include Tabs3 Billing information.

When entering a credit for a cost that was created by an AP invoice, the cost type of the credit must match the cost type of the cost created from AP, or the cost will be shown as “Unpaid” on AP reports that include Tabs3 Billing information.

Fee Compensation Rules

If a credit transaction causes fee compensation rules to be recalculated, neither the Statement Options nor the Receipt Options will be taken into account. Only the Compensation Information will be used to recalculate fee compensation. Credits will unallocate proportionately.

Additionally, only the current fee compensation rules can be used. If a credit transaction causes fee compensation rules to be recalculated and the rules have changed since the payment in question, the compensation will be different.

If you do not want past fee compensation affected, you may want to review other options for crediting the client. Refer to Knowledge Base Article R11760, “Best Practices When Applying Credits” for more information.

Miscellaneous

If a credit is entered for a timekeeper or cost type that exceeds its prior billings, the credit will not be fully applied until that timekeeper or cost type is billed an amount that is equal to or more than the total credit amount.

Credits are applied before tax calculations, which can affect how taxes due are shown in some cases. Refer to Knowledge Base Article R11760, “Best Practices When Applying Credits” for more information.

See also:   Credit Transactions
  Credit Transactions vs. Write Offs vs. Undoing Statements
  How Credit Transactions Affect Automatic Client Funds Payments
   Knowledge Base Article R10772 - Adjusting Work-In-Process
   Knowledge Base Article R10832 - Transferring a Tabs3 Credit Balance
  Knowledge Base Article R11760 - Best Practices When Applying Credits