Understanding Deductions Associated with Invoices

If a customer notifies you before payment about a problem with an invoice, you can access the Customer Ledger Inquiry form to view the disputed item. Then, you can enter a deduction against the disputed item into the Deduction Management system. This informs the manager of the deduction so that they can research and resolve the deduction at a later time.

When you enter a deduction associated with an invoice:

• The open amount of the invoice is reduced by the amount of the deduction, or the invoice is closed if the deduction equals the total amount.

  If the invoice is closed, the system assigns a pay status of P to it.

• The system creates a posted R5 document for the amount of the deduction in the Customer Ledger table (F03B11), which you can display on the Work with Customer Ledger Inquiry form.

  The R5 document is a temporary placeholder that indicates that an open balance remains for the customer. It contains an audit trail to the original invoice.

• The system creates a receipt batch header record (batch type RB) in the Batches table (F0011)

• The system generates a zero-dollar deduction receipt in the Receipts Header table (F03B13).

  The system also creates a corresponding receipt detail record in the Receipts Detail table (F03B14) with one detail line and the amount of the deduction (no payment amount).

After you enter a deduction, you must post the receipt batch to generate records in the F03B40 table so that you can review and resolve the deductions at a later time. After you enter and post deductions associated with invoices, you can review the reason code assigned to the disputed invoice on the Work With Deductions form. To review the reason code, locate the disputed invoice on the Work With Customer Ledger Inquiry form and select Work with Deduction from the Row menu.