· Aisha Rahman
Credit notes that never reach the ledger
Some billing applications can cancel an invoice in place. If the ERP only received the original charge, receivables and revenue are both overstated.
We keep finding a specific pattern. A customer-success user voids or credits an invoice inside the billing application. The application’s customer balance is correct. The ERP still holds the original receivable because the credit interface posts only when a reason code is chosen, and the user left it blank.
From the customer’s point of view the matter is closed. From the accounts, cash will never arrive and revenue was never reversed. Aged receivables then fill with items that collection teams have been told not to chase.
The test is not complicated: a population of credits and voids in the billing application, matched to credit journals in the ledger, with every unmatched item investigated. What is complicated is getting an extract that includes voids, not only documents titled “credit note”.
If your application allows in-place cancellation, finance should receive that event on the same interface as a credit note. Until it does, treat voids as a reconciling item at every close.
If this is the problem on your close, request a scoping note