REVERSE JOURNAL
What is a Reverse Journal?
A reverse journal is a journal entry used to cancel out or nullify a previously recorded journal
entry (since, once posted in the ledger, it cannot be deleted).
Main Uses of Reverse Journals:
Error Correction: To remove any errors or mistakes made while creating journal
entries.
Accrual Reversal: To reverse accruals at the start of a new period, preventing
duplication with actual entries.
Eliminate Temporary Adjustments: To cancel out year-end or month-end
adjustments, ensuring they don’t impact the new period’s accounts.
Methods of Journal Reversal:
Manual Journal Reversal: You can manually reverse journals that are eligible for
reversal on both the "Manage Journals" and "Edit Journals" pages.
If a journal is already reversed the settings display the name and link to the reversal journal
To reverse a journal entry, you can either create a new journal entry specifically for the reversal or
use an existing journal entry, as long as it meets the criteria for reversal.
Method 1 for Manual Reversal:
1. From the homepage, navigate to General Accounting > Journals.
2. In the Taskbar, select Manage Journals.
3. Search for the journal you want to reverse.
Note: Always set the Data Access Set to the ledger you want to access for journal entries.
Step 2: Select a journal from the journal batch you want to reverse. This will enable the
"Reverse Batch" option.
Note: You can also select multiple journals from the same batch or different batches (using Shift +
Ctrl + Select) and perform the "Reverse Journal" or "Reverse Batch" operation on them, but only if
each journal is eligible for reversal, i.e., has a reversal period set. If any selected journal does not
have a reversal period set, an error message will appear: "You haven't submitted any processes. (GL-
781521)."
Step 4: When you select the "Reverse Batch" option on a journal, a window will appear, prompting
you to specify two things: the reversal period and the reversal method.
Reversal Period: Select the period in which you want to record the reversal journal.
Reversal Method: There are two options:
1. Change Sign: This setting means the reversal journal will post the original
journal amount in the same Debit or Credit column, but with the opposite
(negative or positive) sign.
2. Switch Debit or Credit: This setting moves the amount to the opposite
column (i.e., Debit to Credit or vice versa). This is the default setting required
for reversal.
After reversal the journal or batch still remain unposted u have to go on the journal and post it manually ( In auto
reverse method u can choose a option that reverses it and also posts it simultaneously )
Step 5: After clicking "OK" on the popup, a process is scheduled, and a process ID is provided. To
check the status of your process (success or error), navigate to Navbar > Tools > Scheduled
Processes.
Click on this reload button to check the latest status or in search drop down mention your process id
Method 2 for Manual Reversal:
Step 1: Navigate to General Accounting > Journals > Taskbar > Manage Journals and
search for your journal. Follow the same steps as mentioned before, then click on the specific
journal you want to reverse. Open it for editing by clicking on it, or select Edit Journal from
the Actions menu in the top left.
Step 2: Once inside the journal, go to the journal header, click on Show More, and then
select Reversal.
You can select any journal from the batch you are in by navigating through the dropdown
indicated by the arrow.
Step 3: Similarly, select the reversal period and reversal method as mentioned in the previous
method. Then, go to Journal Actions and select Reverse. This will reverse the specific
journal, and you can then post it in the ledger.
Note: The initial manual reversal method takes precedence over the inner journal header reversal
method. If you've set reversal preferences in the journal header and wish to reverse them
accordingly while still using the "Reverse Whole Batch" option efficiently, leave the batch options
empty and submit. This will reverse all journals in the batch that are eligible for reversal, i.e., journals
for which you've specified reversal settings.
This concludes the manual method of journal reversal
Auto Reversal of Journal:
The automatic reversal process only selects reversible journals whose categories are enabled
for automatic reversal in the journal reversal criteria set assigned to the ledger. Only those
journals with the category selected in this criteria will be reversed when the process is
initiated. These reversal criteria are assigned to a specific ledger in the ledger options.
In summary, there are three steps involved:
1. Creating the Journal Reversal Criteria Set
2. Assigning it to the Ledger
3. Initiating the Auto Reversal Process
Creating Journal Reversal Criteria Set:
Navigate to the Settings and Actions menu in the top-right corner, then select Setup
and Maintenance.
In the Setup and Maintenance page, select Offering as Financial, and then go to the
General Ledger task.
Now, select Manage Journal Reversal Criteria Set within the General Ledger task.
Click the + button to open the window where you can select the journal category for
which auto-reversal will apply, along with other specifications, such as:
1. Reversal Period: No Default, Same Period, Next Period, Next Non-Adjusting
Period, Next Day, Same Day.
2. Reversal Date: First Day, Next Day, Last Day.
3. Reversal Method: Change Sign, Switch Debit or Credit.
4. Automatic Reversal Option: None, Reverse Automatically, Reverse and Post
Automatically.
Select the options as needed, then Save and Close. Give a name to the reversal
criteria set so you can easily assign it to your ledger.
Assigning the Reversal Criteria Set to the Ledger:
Navigate to Settings and Actions in the top-right corner, then select Setup and
Maintenance.
In this page, select Offering as Financial, then go to the General Ledger task.
Now, select Specify Ledger Options (change the scope of the ledger if needed), then click Apply and
proceed to the task.
Scroll down to the Intercompany section.
Select the Journal criteria set from dropdown menu for Journal Reversal Criteria
Set, and check the box for Run Auto-Reverse After Open Period.
Save and Close the page. You have now successfully assigned the criteria set to the
ledger.
Running the Auto Reversal of Journal Process:
As we’ve specified the reversal criteria set for the accrual clearing journal category,
the reversal period will be auto-populated when you create a journal with this
category.
Now, go to General Accounting > Taskbar > Run Auto-Reverse to initiate the
process.
Choose your Data Access Set, select the ledger, and specify the reversal period that
you defined in the reversal criteria set.
You can also schedule this process by clicking on Advanced Options (choose the
frequency, e.g., daily, then set the start date, and for weekly, define the start and end
dates).
Click Submit to run the process. This will reverse all journals that fall under the
settings of the reversal criteria set. This completes the auto-reversal process.
Side Note: If you want the subledger and ledger to be perfectly in sync, tick the checkbox for
synchronization.
