Create an Adjustment Detail for an invoice

Learn how to create an Adjustment Detail and apply it to a finalized invoice in Smokeball.

An Invoice Adjustment Detail reduces the amount owed on an invoice that has already been finalized, without changing or deleting the original invoice. You use it to refund fees, apply a discount after the invoice was sent, cancel work, or correct an overcharge, while keeping a clean audit trail back to the original invoice.

You can only have one Adjustment Detail per Invoice.

When to create an Adjustment Detail

Creating an Adjustment Detail can only occur if the invoice is issued and unpaid or fully paid. 

It will not be available for:

• Partially paid invoices - reverse any payments before creating an Adjustment Detail
• Partially or fully paid split-billed invoices - reverse any payments before creating an Adjustment Detail
  • Refer to Adjustment Details on Split-Billed invoices for more information.
• Voided invoices
• $0.00 invoices, i.e. every line item is non-billable or written off
• Invoices with a waived amount and no payments taken
  • You can create an Adjustment Detail for invoices with a waived amount and a payment has been taken. However, total credit is capped as it cannot exceed the invoiced total minus waived amount. 
• Invoices with an Adjustment Detail applied to them already
• Invoices with pending payments - you can create the Adjustment Detail once those payments settle

Adjustment Details on Split-Billed invoices

A split-billed invoice can only be adjusted if there are no payments applied to it. Reverse any payments before creating an Adjustment Detail for them.

When an Adjustment Detail is raised against a split-billed invoice with no payments applied, the total credit is split across the debtors using the invoice's split method (split evenly or % allocated per debtor). Any rounding left over is allocated to the remainder debtor.

How to create an Adjustment Detail

1. On your finalized invoice, select the Create Adjustment Detail button.

   

2. Enter the Issue Date. This cannot be earlier than the invoice's issue date.
3. Choose to apply the credit amount in bulk or per line item.

   • To apply a bulk credit amount, enter the dollar amount in the Apply bulk credit amount field, then select Apply. The credit will be spread proportionally across all fee lines, but you can still edit individual lines afterward.

     

   • To apply a credit per line item, enter a credit amount in the Total Credit Amount field for Time/Fee entries, or enter a credit amount in the Pre-GST Credit Amount and GST Credit Amount fields for disbursements.

     

   • You can also Write Off line items by checking the box under W/O for the relevant line item.

     

4. Check the right-hand panel for the breakdown of the adjustment calculation. 

   

5. View a preview of the draft Adjustment Detail by selecting View Preview on the bottom-right corner of the screen. From here you can also save the adjustment as a Draft to work on it later.

   

6. Once you are ready to finalize the Adjustment Detail, click on Final at the top of the right-hand panel. 

   

7. Select Send via Email to email the Adjustment Detail to the debtor, or Send via Client Portal if they use the Client Portal. You can also choose to do neither by not selecting any option.

   

8. Select Finalise Draft.

Viewing and managing your Adjustment Details

Invoice Adjustment Details live in the Adjustment Details tab of the invoice. 

Click on the Adjustment Detail to view the PDF. From this screen you can Email it, Download it or Void it.

Handling a credit balance

A credit balance appears when the adjustment makes the invoice over-credited (Payments + Adjustments now exceed the invoice amount), so money is owed back to the client. When this happens, a Credit Balance message appears on the right-hand panel when creating the Adjustment Detail.

Funds will automatically be transferred to the Operating Retainer Account. Note that if you use the QuickBooks integration, only the credit balance portion is synced to QuickBooks as a journal entry, not the adjustment to the invoice.

Reversing a payment on an invoice with a credit balance

To reverse a payment on an invoice with a credit balance, you must void the Adjustment Note. This releases the credit balance and makes the payment reversible again.

Handling adjustments on overdue invoices with Interest

If the invoice has accrued interest, finalizing an adjustment recalculates that interest proportionally, as though the adjustment had applied from the invoice's original issue date. In practice, interest is only charged on the portion of the invoice that remains after the adjustment.

Interest is excluded from the adjustment caps (the credit limit is based on the invoice total excluding interest). The recalculation itself runs in the backend when the adjustment is finalized or voided. 

Good to Know

• Surcharges are not adjustable at the moment. A surcharge on an invoice shows in the calculation breakdown but cannot itself be credited or adjusted. If you need to bring the invoice down to zero, edit the invoice to remove the surcharge first, then create the adjustment.
• If the original invoice is voided, all finalized adjustments linked to it are automatically voided, and any draft adjustments are deleted.
• If an Adjustment Detail has been voided and re-created, the Adjustment Detail Number will be kept, but with a suffix in brackets (e.g. AN-1077 (2)).