Voided Invoices

What are Voided Invoices?

Voided Invoices represent invoices that have been canceled because they were created in error or are no longer valid. Voiding an invoice completely reverses its accounting impact, as if the invoice never existed.

When an invoice is voided:

1. Account Receivable decreases - Customer no longer owes the amount
2. Deferred Revenue increases - Service obligation removed
3. Taxes increase - Tax liability removed
4. Recognized Revenue may increase - Any previously recognized revenue reversed

This row appears when invoices are voided, typically before payment is received.

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When to Void an Invoice

Common reasons to void an invoice:

• Created in error: Wrong amount, wrong customer, duplicate
• Pricing mistake: Incorrect pricing was applied
• Wrong subscription: Customer was enrolled incorrectly
• Data entry error: Information was entered wrong
• Cancellation before payment: Subscription canceled immediately
• System error: Invoice generated by mistake
• Need to recreate: Must void and recreate with correct details

Key Difference: Void means the invoice should never have existed or is being corrected. Use "Uncollectible" for invoices that were legitimate but customer won't pay.

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Transactions Included

An invoice appears in "Voided Invoices" when:

1. Voided this month: Invoice voided_at date is within the selected month
2. Status is void: Invoice status changed to "void"
3. Not deleted: Invoice hasn't been deleted
4. Correct account and currency: Matches selected account and currency

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Real-World Examples

Example 1 - Duplicate Invoice:

• System accidentally creates two invoices for same subscription: #1001 and #1002
• Both for $110 ($100 + $10 tax)
• Invoice #1002 is voided
• Result in October's Report:
  • Account Receivable: -$110 (remove duplicate debt)
  • Deferred Revenue: +$100 (remove duplicate obligation)
  • Taxes: +$10 (remove duplicate tax)

Example 2 - Wrong Pricing:

• Invoice created with $150 (should be $100)
• Invoice voided and recreated with correct amount
• Result in October's Report (for void):
  • Account Receivable: -$165 (incl. $15 tax)
  • Deferred Revenue: +$150
  • Taxes: +$15
• New correct invoice shows in "Subscriptions Revenue"

Example 3 - Immediate Cancellation:

• Customer subscribes, invoice #5001 for $1,200 created
• Customer immediately cancels before service starts
• Invoice voided
• Result in October's Report:
  • Account Receivable: -$1,320
  • Deferred Revenue: +$1,200
  • Taxes: +$120
  • Recognized Revenue: $0 (nothing delivered)

Example 4 - Voided After Partial Service:

• Monthly $100 subscription invoice created October 1
• Half month of service delivered
• Subscription canceled, invoice voided October 15
• Result in October's Report:
  • Account Receivable: -$110
  • Deferred Revenue: +$50 (remaining half month)
  • Recognized Revenue: +$50 (reverse half month recognized)
  • Taxes: +$10

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Columns Affected

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Account Receivable

Account Receivable shows the invoice amount being removed from what customers owe.

Why Negative? The invoice is canceled, so the amount owed (asset) decreases, shown as negative.

Calculation: Full invoice amount including taxes.

Example: $1,200 subscription + $120 tax = -$1,320 Account Receivable

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Deferred Revenue

Deferred Revenue shows the portion of undelivered service being released.

Why Positive? The service obligation (liability) is removed. Decreasing liability is shown as positive.

Calculation: Invoice amount excluding tax, adjusted for what percentage hasn't been delivered yet.

For subscriptions: If any service was already delivered before voiding, only the undelivered portion affects Deferred Revenue.

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Recognized Revenue

Recognized Revenue shows any previously recognized revenue being reversed.

Why Positive? Recognized Revenue is normally negative (income). Reversing it makes it less negative, shown as positive.

Calculation: Only appears if some service was already delivered and recognized before the invoice was voided.

Example: If half a month of subscription was delivered, half the invoice amount appears here.

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Taxes

Taxes shows the tax liability being removed.

Why Positive? Tax liability is removed. Decreasing liability is shown as positive.

Calculation: Full tax amount from the original invoice.

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Voided vs. Uncollectible vs. Refunded

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Voided vs. Recreated Invoices

Common Pattern:

1. Invoice created with wrong amount ($150)
2. Invoice #1 voided (shows in this row: reversals)
3. New Invoice #2 created with correct amount ($100) (shows in "Subscriptions Revenue")
4. Net Effect: Original $150 reversed, new $100 created = net change of -$50

In Reports:

• Voided Invoices row: -$150 (plus tax)
• Subscriptions Revenue row: +$100 (plus tax)

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Partial Service Before Void

When an invoice is voided after some service was delivered:

Time-Based Example:

• $100 monthly subscription
• Voided after 10 days (33% delivered)
• Deferred Revenue: +$67 (remaining 67% not owed)
• Recognized Revenue: +$33 (reverse the 33% already recognized)

Shipment-Based Example:

• 12-issue subscription for $120
• Voided after 2 issues delivered
• Deferred Revenue: +$100 (10 issues not owed)
• Recognized Revenue: +$20 (reverse 2 issues already recognized)

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Common Questions

Can I void an invoice after it's been paid?

A: Technically yes, but it's not recommended. If an invoice has been paid, you should typically issue a refund instead. Voiding a paid invoice can create reconciliation issues.

What's the difference between voiding and deleting?

• Voiding: Invoice remains in system marked as "void", creates accounting reversal entries
• Deleting: Invoice removed from system entirely (rarely used, can cause audit issues)

Voiding is preferred for proper audit trails.

Can I un-void an invoice?

A: This depends on your system configuration. Generally, once voided, it's better to create a new invoice rather than un-voiding. Consult your accountant.

When should I void vs. issue a credit note?

• Void: Invoice was wrong/incorrect and should never have existed
• Credit Note: Invoice was correct but you're issuing a credit for service quality, goodwill, or partial adjustment

Do voided invoices affect my revenue?

A: Only if some service was already delivered and recognized. The Recognized Revenue column shows any income reversal. Otherwise, voiding just removes the original accounting entries before any revenue was earned.

What if I void the wrong invoice by mistake?

A: Contact your accounting team immediately. You may need to:

1. Recreate the voided invoice
2. Document the mistake
3. Ensure proper audit trail

Can I see which invoices were voided?

A: Yes! If you have the appropriate permissions, there's a download icon next to this row that lets you export detailed transaction data.

How long after creation can I void an invoice?

A: This depends on your business policies. Generally, invoices can be voided at any time, but it's best practice to void quickly after discovering errors.

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Summary

Quick Reference:

What appears here: Invoices voided/canceled during the month

Inclusion criteria:

• Invoice voided this month
• Status changed to "void"
• Not deleted
• Correct account and currency

Effect: Completely reverses the original invoice

• Account Receivable: Negative (remove amount owed)
• Deferred Revenue: Positive (remove service obligation)
• Recognized Revenue: Positive (reverse any recognized income)
• Taxes: Positive (remove tax liability)

Key Point: Use for invoice errors, not for legitimate invoices that customers won't pay (use "Uncollectible" for that)