Correcting Accounting Errors

In this article:

• Understanding When to Edit, Delete or Reverse a Transaction
• Editing a Transaction
• Deleting a Transaction
• Reversing a Transaction

You can correct mistakes made in accounting transactions. This may involve either changing the transaction or reversing or deleting the transaction so it can be re-entered. The following article explains each of these processes and when to choose it. 

Understanding When to Edit, Delete or Reverse a Transaction

Within Actionstep, you have three options available to correct a transaction:

• Editing a transaction: If the transaction is newly entered and not yet locked, you can open it and edit it. This is the easiest option. 
• Deleting a transaction: If the transaction is locked, you might be able to delete it and re-enter it again correctly.
• Reversing a transaction: If any of the follow scenarios apply to the transaction, you can reverse it:
  • When the transaction has been included in a bank reconciliation
  • When the transaction has been included in a sales tax return (GST, BAS, VAT)
  • When the transaction falls into a lockout period
  • When your Actionstep is set to not allow deleting accounting transactions

Editing a Transaction

Actionstep keeps records of all transactions you enter. As long as the transaction is still within the period where it can be edited, you can make adjustments to it. 

To do this:

1. In Actionstep, go to Accounting > Banking. The Banking page appears.
   NOTE:  To access previously entered general journals, go to Accounting > Accounts > General Journal. Then click the ID number of the Participant name to open the record.
2. Select the name of the account that has the transaction you need to edit. That transaction is opened.
   TIP:  To more quickly find individual transactions, use the options on the Filter drop-down list and filter by transaction type, the date, amount, and/or the contact involved.
3. Edit the information you need to change. 
4. Click Save to save those changes. 

Deleting a Transaction

Once you find and open a transaction (as described in the previous section), you can use the Delete button to delete the transaction (as long as it meets the requirements described in Understanding When to Edit, Delete or Reverse a Transaction, above). 

Reversing a Transaction

Reversing a transaction can be a preferred option for many users since it shows a clear audit trail of changes made. It is also a required process for some transaction types (such as funds transfers) and is required when you cannot delete a transaction.

With a reversal, you can create another transaction to cancel the first. You then re-enter the transaction again correctly. This will result in three transactions:

1. Your initial transaction that had an error
2. Your reversal transaction
3. Your re-entered transaction without the error

It might help to think of a reversal as a negative transaction. 

Many recorded transactions in Actionstep include a Reverse button which you can use instead of deleting a transaction. 

To reverse a transaction using the Actionstep Reverse  button:

1. In Actionstep, go to Accounting > Banking. The Banking page appears.
2. Select the name of the account that has the transaction you want to reverse. That transaction is opened.
3. If the transaction can be reversed, a button appears on it. 
4. Click Reverse to reverse the transaction.
5. A page appears, confirming the action.
6. Enter your Reversal Reason, review the other details of the reversal request, and if you're sure you want to proceed, click Process. 

EXAMPLE: Manually Reversing a Transaction
If you do not have a button for reversing a transaction, you can create a reversal manually by creating a transaction that cancels out the first transaction.

For example, let's say you have created a firm deposit of $5.32 for the interest that you earned on your business bank account. When reconciling, you notice that the amount you entered was incorrect and should have been $5.23 (you have entered the cents incorrectly).

To manually reverse this, you can create a firm withdrawal, which will be dated the exact same date as the original incorrect entry and will be for $5.32—the exact same amount of the original incorrect transaction.

As you enter the withdrawal that will be the manual reversal, add a note or memo against the transaction that states:
• That the transaction is a reversal transaction
• The original transaction is being reversed
• The reason why the transaction is being reversed

You can now re-enter the firm deposit using the same date but with the correct amount ($5.23).

When you reconcile the account, you will see three transactions, similar to this:
The first transaction is the mistake. You can then see the second transaction cancels out the first. The last transaction enters the transaction correctly.

When reconciling the above, you will reconcile all three transactions. The first two will cancel each other out and the last will match your bank statement.