Adjustments are corrections/modifications done to a billed charge. An adjustment affects the taxes applicable on the charge as well.
Adjustments are given in the following two different ways:
Credit Adjustment: In this type,
corrections are made that results in crediting the customer account.
Credit adjustment generally happens due to reduction of bills because
of an allowance, return or cancellation. It is the opposite of an
invoice.
Credit Adjustments are done through Credit
Note screen.
Debit Adjustment: In this type,
corrections are made that results in additionally debiting the customer
account. Debit adjustment is issued towards correction of an invoice.
This adjustment increases the debit balance of a customer.
Debit Adjustments are done through Debit
Note screen.
Adjustments can also be given on “Account”. Depending on the nature, on account adjustments are given through Credit Notes or Debit Notes. Credit note is an amount which credits customer account through an on-account entry whereas, Debit note is an amount which debits customer account through an on-account entry.
Adjustments can be categorized into different account heads in form of “adjustment type”. Adjustment types are defined in Adjustment Typ e screen.
For Example:
If a customer has paid an amount of Rs.200 towards a service, but due to some reasons like penalty, etc. the customer need to pay an extra amount of Rs.25, then debit adjustment of Rs.25 is posted to correct this amount.