Adjustment Types for Payment and Expense Records

Scheduled Payment Changes

If you use the four-object model for accrual accounting, we recommend that the total of the secondary object's amounts remain equal to or less than the primary object's amount. If you change either one, update the other to match.

If the sum of the secondary object's amounts exceeds the primary object's amount, Accounting Subledger generates transaction journal records only up to the primary object's amount.

Adjustments to Records Marked as Paid

If a record is marked as paid and later determined to be incorrect, an adjustment is in order.

While you can change records at any time (for example, to correct errors made during entry), we recommend that you only do so when necessary. Before making any changes, confirm with your accounting teams that adjustments are allowed.

Transaction journal records are immutable, so, to make a correction, Accounting Subledger creates adjustment transaction journal records.

Refunds

Refunds are like other paid transactions, except that you enter them as a negative amount, and mark them as paid.

Choose the allocations that the refund comes from and whether it's part of an existing set of records. For example, a refund, full or partial, can apply to a multiple-payment gift or to an entire payment.

To reverse a record that's marked as paid, generate a refund by creating another record with a negative amount.

Note In these instructions, the Amount, Payment is Paid, Payment Paid Date, and Payment Method field names refer to the accounting set's fields. They don't refer to the fields on your source records that you mapped to the accounting set's fields. When following these instructions, update the values in your corresponding source fields. For example, if the source field mapped to Payment Paid Date is called Payment Date, update the Payment Date field in step 3.

1. Create a new payment or expense record.
2. Enter the refund Amount as a negative number. For example, enter -200 for a US$200 refund.
3. Select Payment is Paid.
4. Enter the date on which the refund was processed in Payment Paid Date.
5. Enter the method that was used to issue the refund in Payment Method.
6. Save your changes.

Refunds generate the same transaction journal records as regular payments and expenses. Therefore, if the record still exists with the original amount, Salesforce also creates a debit entry in the receivables account. To avoid that, reduce the amount on the source record by the refund amount after you created the refund payment. For example, you have an opportunity amount of $100, and a donor makes a $100 donation. They later want a refund on the donation that you already marked as paid. If you create a $100 refund on the opportunity, also reduce the opportunity amount to $0 so that we don't create an entry in the receivables account.

If applicable, you can also write off a payment so that the original payment is reversed.

Write-Off Payments

Write-offs are standard in accrual accounting, which recognizes gift revenue when the gift is committed. Completing a write-off maintains the promised revenue amount, while acknowledging that it won't become available.

Occasionally you receive notice that a donor can't fulfill their pledge and won't send a payment. To write off a payment, follow the same steps for receiving a payment, except select Written Off instead of Paid on the source record. You don't have to set a payment method.

Accounting Subledger generates transaction journal records after a write-off just as it would for a payment that's marked as paid. However, the transaction and payment types of transaction journal records are marked as written off, indicating that the revenue wasn't received.

Note In Accounting Subledger, a payment that's written off isn't the same as a refund. Write-offs and refunds adjust accounting data by crediting and debiting different funds. See Adjustment Types for Payment and Expense Records.

Differences Between Write-Offs and Refunds

Write-offs are for pledged amounts that you haven't received yet, and refunds are for completed payments that you want to reverse and return to the donor.

You can use refunds to enter negative payments that aren’t associated with a specific donation. For example, create a refund for a payment processed in a different period, or to track a payment that wasn’t initially entered in Salesforce.

Accounting Subledger creates transaction journal records differently depending on which adjustment you make.

* If you already received payments and only want to write off some of them, Accounting Subledger still creates transaction journal records for those payments like it does for refunds.

Negative Payment or Expense Amounts (Reversals)

Because you can't easily delete transaction journal records, Accounting Subledger uses negative payment or expense amounts to process refunds and reversals.

The debit and credit amounts are reversed. For example, Salesforce posts debits in the original fund and credits in the cash fund. See Accounting Subledger Terminology.

You can use negative payments to refund a record that wasn't initially entered in Salesforce, even if it exceeds the original amount on the source record.

Note The original source record (if any) remains marked as paid.

For example, you enter a record for US$100 cash to be directed to your general fund. When you run Accounting Subledger, it generates a debit transaction journal record of $100 in the cash account and a $100 credit transaction journal record in the general fund.

The next day, a team member deletes the record after realizing that the $100 payment was meant for another department that uses a different system. We don't delete the generated transaction journal records, and you now likely want to reverse them.

To create reversals and cancel the original transaction before the team member deleted the primary object record:

1. Change the amounts on the primary and related object records to $0.

   This change directs Accounting Subledger to create reversal records for any existing transaction journal records.

2. Wait until the Accounting Subledger job runs.
3. Verify that the job created reversal transaction journal records accurately.
4. Delete the primary object record and any related records.