This article explains how to add invoices in ScaleXP to ensure the revenue recognition in ScaleXP reflects the correct amounts in your accounting system.

1. How to create a manual invoice in ScaleXP

Go to the Customers tab where you can see information on existing invoices, then

• if for an existing customer, click on the arrow "^" next to the customer name to expand customer detail and then select "+Add Manual Adjustment" at the bottom of the invoice list or
• add a new customer using the Cog (top right) and selecting  "Add Customer."

Be sure that your filters are set to show all customer invoices

You will be prompted to enter the new invoice detail.  Then Save.

2. To add un-invoiced revenue

Manual invoices are useful when you receive revenue without a direct match to an invoice in your accounting system.

Examples include payments from Paypal, Stripe, direct bank transfers, etc. where there is not an associated invoice in your accounting system.  Note that you can choose to create Stripe invoices automatically in ScaleXP and/or your accounting system: See How automate accrued revenue journal posting, to add and release revenue accrual 

Note that this is different from accrued revenue, which is for recognising revenue not yet invoiced or invoiced at a future date. 

To recognise un-invoiced revenue in ScaleXP and align its revenue recognition to your accounting system, you can create a manual invoice in ScaleXP.

To add this type of revenue, follow these steps:

• 1. Create (or select from existing) a customer to cover the revenue type (for example, "Paypal customers").
• 2. Enter the revenue amount for the month to match the amount in your accounting system (excluding sales tax) and set the account name to match the P&L code where the revenue is recognised.
• 3.Set the invoice issue date to be the same as the month in which the revenue has been received into your accountng system.
• 4. Set the revenue start and end date as appropriate for the revenue received.

That's it - your revenue recognition in ScaleXP should now match your accounting system.

3. To move invoiced revenue between accounts

Sometimes you may want to manually allocate revenue between accounts without changing the accounts in the invoice. You are likely to do this using a manual journal in your accounting system.

For example,

• to move revenue for part of a line item;
• to move revenue for an invoice which was issued in a closed period or otherwise can't be changed.

To move revenue between accounts, create a manual invoice and offsetting credit note as follows

• Select the customer of the invoiced revenue and "add manual adjustment" as described above
• Create an invoice to the new revenue account
• Create a credit note (that is, negative value invoice) on the same issue date which is equal and opposite in value.
• Separately, make the manual adjustment in your accounting system transferring the revenue from one account to the other.

Note: it is possible to use line items in ScaleXP for the above manual invoices, but creating separate invoices is recommended as ScaleXP will ignore nil value invoices on many of its reports - so better to keep them as separate manual invoices.

By following the steps above, you will align ScaleXP's revenue recognition with your accounting system. This will ensure consistent reporting and also prevent ScaleXP from recommending any journals which reverse your intentional manual ajdjustment(s).

4. To adjust the timing of revenue recognition

You may want to make a one-off adjustment to revenue which is otherwise spread evenly across a start and end date, for example:

• To pull forward back-dated revenue or a credit note on a one-off basis or using a date other than the issue date
• To adjust a credit note to reflect an uneven allocation across time
• To adjust the timing of future revenue from an invoice which has already been partially recognised
• other adjustments in timing of revenue recognition.

To make these manual adjustments to timing, create a manual invoice as described in Section 1 above, adding it to the existing Customer name.

• Create a line item specifying (in the description text) each time period in which revenue is being added (versus the original invoice).
• Create an equal and opposite line item specifying (in the line item description) each time period in which revenue is being reduced (versus the original invoice).
• Save the invoice.

5. To move revenue to/from the deferred revenue balance sheet

If you need to make an adjustment to your deferred revenue balance sheet - for example, when switching recognition methods or consolidating balance sheet accounts, you may need to create an adjustment journal dated in the past.   Read more here: How to adjust the starting balance sheet for deferred revenue. 

ScaleXP will always try to reverse movements between the balance sheet and P&L if it does not expect them. This is because the journal calculation takes into account all previously made journals impacting your deferred revenue account in that month. (Section 5 of the deferred revenue journal in ScaleXP - see Deferred Revenue Journal: How to write deferred revenue journals to Xero or QuickBooks).

To prevent this reversal suggestion, do the following:

Create one or more manual invoices reflecting the adjustments required to revenue.

• Create a negative invoice/credit note if you need to reduce (Debit) revenue and increase (Credit) the balance sheet.
• Create a positive invoice if you need to increase (Credit) revenue and decrease (Debit) the balance sheet.

The sum of your adjustment invoices should reflect the net amount by which you wish to decrease the balance sheet.

Ensure that you specify an invoice issue date which is far in the past -- prior to the period in which you are viewing ScaleXP journal recommendations.

This combination will ensure that ScaleXP's recommended journals move the adjustment amounts from the balance sheet onto the P&L.

Hint - to avoid impacting MRR, use a P&L code which is included in your deferred revenue journal but not your MRR