Whenever a deduction is posted, entries are made to a primary account and a balancing account. Depending on the type of deduction being posted, the balancing account varies.
Deduction posting
When a payment is posted for which deduction lines exist, each deduction line is posted as a separate credit to the relevant customer ledger. If it is a writeoff or accrual plan deduction, the account assigned on the deduction line acts as the balancing account for the customer ledger entry.
When a deduction line is unallowed, the program still posts a credit to the appropriate customer ledger for the deduction amount. The balancing account is always of the type customer, but can be one of two values: the original customer or a special Deduction Management customer.
On the Sales & Receivables Setup page, you can enter a deduction management customer record. If this field contains a value, that record is the special Deduction Management customer. Although not a real customer, this record must be set up so that unallowed deductions can be transferred to a customer ledger.
Resolution posting
Resolution posting means that the unresolved amounts are posted to either write-offs or accrual plans, or that the amount is returned to the customer as open. As with deductions, writeoff and accrual plan resolutions use the assigned resolution account as the balancing account for the resolution.
When using the special Deduction Management customer and you post a resolution line as a return, the program balances the resolution against the original customer, creating a debit for the resolution amount in that customer's ledger. You can instruct the program to use the posting date of the original ledger entry from which the deduction was generated as the posting date for the new debit entry.
When leaving the unallowed amounts on the original customer, new records are also created, but they all remain on the same customer ledger entry and are traceable throughout.