Automatic Invoice Settlement with Previous Year Journal Entries

Dears

We have noticed an issue with the system where, despite the customer’s balance being zero at the end of 2024,
any invoice issued in the current year (2025) appears as fully paid and is automatically linked to a journal entry from the previous year.

This issue has been observed with multiple users.
The common factor is that these users recorded sales in 2024 using journal entries instead of sales invoices.
When they started using invoices in 2025, the system automatically settles these invoices against previous year’s journal entries.

The main question is: regardless of the data entry method (journal entries or invoices), why does the invoice in the current year appear as fully paid and automatically linked to a journal entry from the previous year?


You mean they recorded advanced payments from customers? Then customers had credit which would be automatically allocated to the future invoice.

I’m not quite sure what is the issue here.

Invoice is 2025 was paid using customer credit from 2024. How else would you do this? I mean what do you expect to happen instead?

No, it is not like that.

In 2024, all transactions on the customer’s account were recorded using journal entries since the user was not using invoices to record revenues. Instead, journal entries were used for both debit transactions (sales) and credit transactions (collections from customers).

By December 31, 2024, the net result of these transactions was zero, meaning the customer’s account balance at the end of 2024 was also zero.

The user was then advised to start using sales invoices to record revenues in 2025 instead of journal entries.

The issue appeared with the first invoice recorded in 2025.

However, something strange happened: with the first invoice issued in 2025, an allocation appeared for a payment made in October 2024, reducing the invoice balance. As a result, the invoice appeared to be paid, even though the customer’s balance before the invoice was zero.

I see what you mean now. Automatic credit allocation is trying to match all credit transactions to invoices. But there is debit journal entry which is basically an invoice and can’t be matched to anything because it’s a journal entry (not an invoice).

I will need to think this through. But let’s move it to bugs.

1 Like

Thank you,for the clarification.

In any case, the customer’s statement of account is accurate and there are no issues with it.
The problem seems to only lie in the sales invoice.

A potential solution for this issue could be hiding the due date and the outstanding amount in the invoice. This way, it won’t appear as if the invoice is fully paid. :ok_hand: