Fixing mistakes

The idea

When an entry is wrong, never patch one line. Replace the whole entry with a new balanced one, and keep the old one in history. If the period is already closed, leave it alone and correct it in the current period instead.

Open period: replace

Bill #245 was entered with the wrong rate. The month is still open, nothing is filed yet.

• Edit the bill.
• Its old postings are marked superseded.
• A new balanced set of postings is written from the corrected bill.
• Reports show only the live set. History keeps both, so anyone can see what changed, when and by whom.

This is why a Tally user can alter a voucher and see the books update at once, while an auditor can still see the earlier version.

Closed or filed period: reverse

The bill was in September, September's GST return is filed, and the books for the month are locked.

• Do not edit the September bill.
• Pass a reversing entry in the current period — a credit note or debit note, or a journal voucher if no document fits — that corrects the difference.
• The September figures stay exactly as filed, and the correction is visible in October.

Common mistake

Fixing a report by hand: changing a closing balance, typing over a ledger total, or adjusting the trial balance so it "matches". The next time the report is calculated, the mistake comes back. Fix the document; the postings follow; every report corrects itself.

Where you'll use this

In Part 3, a wrong scheme rate on an invoice is fixed with a credit note to the retailer, and a rejected company claim is reversed in the month it is rejected — not by editing the original claim.

Check yourself

1. In an open month, what happens to the old postings when a bill is edited?
2. Why not edit a bill whose GST return is already filed?
3. What is the safe way to correct a filed month?

Answers

1. They are marked superseded and a new balanced set replaces them; both stay in history.
2. The books would no longer match what was filed with the government.
3. A reversing entry — credit note, debit note or journal voucher — in the current period.