Knock Off Invoices – What is this?
The term knock off invoices is a predominantly Malaysian term used by businesses and accountants to account for payment of invoice and/or invoices via Cash/Cheque received by customers.
Commonly, businesses in Malaysia will issue a cheque to make payments for any outstanding invoices owing to suppliers. This cheque is either posted via mail or collected by the supplier in person. However, the processing of the cheque payment may be done by the accounts department who may/may not know what is the payment for. Many times, clerical errors are made to knock off incorrect invoices that was pending if no proper/complete instructions are provided beforehand. This in turn will create confusion and errors in the debtors ageing report during monthly reporting.
As a rule of thumb, a business should issue a payment voucher (Check out our post on Payment Voucher) to be included together with the cheque during collection to indicate which invoice that is to be knocked off. Nevertheless, human error will still occur on when manual processing is involved.
With the digital age, internet transfer or electronic banking is getting popular with business to avoid issuing cheques. However, this creates another issue when the information included in the transfer is not properly documented with a payment voucher. The receiving party will need to call up and request for information from the paying party to confirm details. This in turn increase workload and frustration when both parties have to reconcile the payments.
Is there a solution for Automatic Invoice Knock Off tracking and reconciliation?
With Beacon Cloud Accounting, Invoice knock off can be tracked and reconciled easily with just a click of a button. No more headaches chasing customers on which invoice the payment is for.
By selecting your customer and payment amount, a list of outstanding invoices will be available for knock off and allocate the appropriate amount to each invoice.
A list of knock off voucher will be created for each knockoff event. In any event of an error made during knockoff, accounts can easily track and correct the payments.
Click here to view our modern Invoice Knock method and learn how to get Beacon to make running your business as easy as 123.