Michael has successfully posted quite a few invoices but with the last one he got distracted and realizes that the posted invoice is incorrect. Unfortunately, there are every few fields that cannot be changed once a document is posted. Michael entered the incorrect amount on the invoice; thus, the only solution is to reverse the invoice. Now what happens if the document that Michael wants to reverse has been cleared?
Reversing and resetting documents are two essential functionalities within Receivables Management.
Reversing a document cancels the original accounting document’s impact on the financial statement. It generates a new document that is the exact opposite of the original document.
Reversals are often performed when an error has been made on a posted document – for instance, if the wrong account was used, the amount was wrong, the date was incorrect, and so on. Rather than modifying the original document, which can complicate the audit trail, users 'reverse' the document and create a new one with the correct details. An important aspect is that both the original and the reversed document remain in the system, keeping the financial records transparent and consistent.
You generally post the reversal document in the same posting period as the corresponding original document. If the posting period of the source document has already been closed, you have to enter a date that falls in an open posting period (for example, the current one) in the Posting date field.
Now Michael tries to reverse a document but he gets a message,
Document includes already cleared items - reversal not possible.
What happened here? He can’t reverse the document as it's already been cleared.
Michael sees Karin walk into the office. This is a good time to ask her if she can assist him.
Karin explains that if one wants to reverse a document but it already has been cleared, you have to use the Reset Cleared Items app.
"Resetting" generally refers to the action taken to nullify a previously cleared item. This involves uncoupling, or resetting, the link between the invoice and the payment.
When a document or invoice is paid completely, it is marked as ‘Cleared’ in the system. A cleared document means the relative business transaction is complete. However, there could be instances where this cleared status may need to be reverted, often for rectifying errors or making adjustments.
That's where the "Reset" function comes into play.
In Michael’s scenario, he must reset the cleared item before he can reverse his document.
The good part is that with the Reset Cleared Items app you can reset the clearing of line items as well as reverse the clearing entry if required.
In Michael’s case, he wants to reverse the incorrect document so he can use the Reset and Reverse option which will restore the documents back to open items.
Select the play button to learn about reversing documents in SAP S/4HANA Cloud, public edition system.
If a customer payment has been incorrectly matched to invoices, then it can be reset. With the Reset Cleared Items app you can reset the clearing of line items as well as reverse the clearing entry if required. You can use this function for line items of customer accounts or supplier accounts as well as for line items of G/L accounts that are managed on an open item basis.
In Michael’s case, he manually cleared two documents and thereafter realized that they were incorrectly cleared. He can use Reset Cleared Items to restore the documents back to open items. He doesn’t need to reverse the documents so he will choose the option to reset only.
Select the play button to learn about resetting documents in SAP S/4HANA Cloud, public edition system.