Update Invoice for Order Adjustments

How it works

When an order is adjusted, the system must keep the invoice, refund transaction, and bank reconciliation aligned.

• If funds are returned to the customer, a credit note is created and applied to the original invoice. This is required because a cash movement occurred — the credit note lets the system record the refund payment against the invoice so the invoice balance, refund transaction, and bank reconciliation all match.
• If no funds are returned (for example, an exchange or an internal adjustment), the system can either:
  • create a credit note (traditional audit-trail approach), or
  • update the original invoice to reflect the final payable amount (clean ledger approach).

Methods

1) Credit Note Method — App default (setting: disabled)

What it does: Creates a separate credit note that offsets the original invoice, even if no physical cash was returned.

• Pros
  • Strong audit trail: original invoice remains unchanged and an explicit credit note documents the adjustment.
  • Clear record of every adjustment for historical accuracy and compliance.
• Cons
  • Can clutter the ledger with many small credit notes (especially for exchanges or internal adjustments that do not involve bank movement).
  • May make month-end bank reconciliation more time-consuming.

2) Update Invoice for Order Adjustments — (setting: enabled)

What it does: Edits the original invoice so the invoice total reflects the exchanged/returned amount, instead of creating a separate credit note.

• Pros
  • Cleaner ledger with fewer documents.
  • Final invoice total matches the actual amount paid — simplifies reconciliation and reporting.
• Cons
  • Requires the accounting system to permit editing of previously approved invoices.
  • If change reasons aren’t recorded clearly (e.g., notes or edit history), the reason for the change can be less visible in the audit trail.