IN BRIEF 
Adjustment line items let staff reduce the value of an existing charge without editing or deleting the original charge record, preserving a complete and accurate financial audit trail.

• Overview
  • Required Permissions
• Accessing the Feature
• Step-by-Step Instructions
• Understanding the Two Adjustment Line Item Types
  • ADJUSTMENT
  • ADJUSTMENT - BAD DEBT
• Additional Notes
  • Adjustment amount limits
  • Applying multiple adjustments to the same charge
  • Editing and deleting charges that have adjustments
  • Audit Logging
  • How Adjustments Affect Sales Tax
• Troubleshooting & FAQs
• Related Articles

Overview

Adjustment line items give staff a way to reduce the value of an existing charge while leaving the original charge record intact. Rather than editing or deleting a charge, staff apply a negative adjustment on top of it, which keeps the full history of the transaction visible and auditable.

This approach supports accurate accrual accounting by ensuring that every financial transaction remains traceable. It is most commonly used to write off bad debts and to correct billing errors without erasing the record of what was originally charged.

Two adjustment line item types are available:

• ADJUSTMENT, for general corrections and System-generated adjustments.
• ADJUSTMENT - BAD DEBT, specifically for writing off uncollectible debt.

Once an adjustment has been applied to a charge, that charge can no longer be edited or deleted. This protects the integrity of the financial audit trail.

Note(s): To review adjustments that have been applied, staff can run:

• Charge Adjustments Report
  • What is the Charge Adjustments Report (FIN-31)? 
• Category List Report (FIN-6).
  • What is the Category List Report (FIN-6)?

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Required Permissions

Access to adjustment line items is controlled by the Apply Charge Adjustments permission.

• Staff members with the Apply Charge Adjustments permission can select the ADJUSTMENT and ADJUSTMENT - BAD DEBT options from the Line Item Type dropdown and create adjustment line items on charges.
• Staff members without the Apply Charge Adjustments permission still see the ADJUSTMENT and ADJUSTMENT - BAD DEBT options in the Line Item Type dropdown, but the options appear greyed out and cannot be selected.

Note(s): If the adjustment options appear greyed out even though you expect access, confirm with an administrator that the Apply Charge Adjustments permission has been enabled for your staff member record.

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Accessing the Feature

Adjustment line items are applied from the Full Ledger screen for a family.

1. Navigate to the family whose charge you want to adjust.
2. Open the Full Ledger screen.
3. Locate a charge that has a remaining balance greater than $0.00.
4. Select the edit (pencil) icon next to that charge to open the Edit/View Charge dialog.

Note(s): Adjustment line items can only be applied to charges that have a remaining balance greater than $0.00. On a charge with a $0.00 balance, whether fully paid or fully adjusted, the ADJUSTMENT and ADJUSTMENT - BAD DEBT options are greyed out and cannot be selected.

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Step-by-Step Instructions

To apply an adjustment line item to a charge:

1. From the Full Ledger screen, select the edit (pencil) icon next to a charge that has a remaining balance greater than $0.00.
2. In the Edit/View Charge dialog, click the ADJUST button next to the charge.
3. From the Adjustment Type dropdown, select either ADJUSTMENT or ADJUSTMENT - BAD DEBT.
4. In the Title / Reason field, enter a reason for the adjustment.
5. In the Amount field, which is prepopulated with a "-" symbol, enter a positive numeric value. The System applies this value as a negative adjustment to the charge.
   • NOTE: For ADJUSTMENT - BAD DEBT adjustments, this total should automatically populate with the remaining charge balance.
6. Save the charge.

After you save, the adjustment appears as a new line in the charge line items:

• The Type column shows ADJUSTMENT or ADJUSTMENT - BAD DEBT.
• The Title column shows the description you entered.
• The Amount column shows the negative value, for example -$40.00.
• The adjustment line item has no action icons, so it cannot be edited or deleted.
• The Total reflects the original charge amount minus all adjustments and matches the current balance due.

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Understanding the Two Adjustment Line Item Types

Both adjustment types reduce a charge's value in the same way and follow the same rules. They are separated so the System can track and, in the future, report on the two use cases independently. Selecting the correct type keeps your financial records meaningful.

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ADJUSTMENT

Use ADJUSTMENT when you are correcting a charge for a reason other than uncollectible debt. Typical situations include:

• Correcting a billing error, such as an incorrect rate or an amount entered in error.
• Applying a goodwill reduction or a one-time courtesy discount to a specific charge.
• Reconciling a charge to match an agreed-upon amount.

The ADJUSTMENT type is also the line item type the System uses for automated processes such as Point of Sale returns.

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ADJUSTMENT - BAD DEBT

Use ADJUSTMENT - BAD DEBT when you are writing off a charge that you have determined is uncollectible. Typical situations include:

• Writing off a balance for a family whose account is being closed with an outstanding amount.
• Removing a debt that has been deemed unrecoverable after collection efforts.

Selecting ADJUSTMENT - BAD DEBT rather than ADJUSTMENT keeps write-offs distinct from other corrections in the ledger.

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Additional Notes

Adjustment amount limits

An adjustment cannot reduce a charge below its remaining value. The maximum allowed adjustment is calculated as:

Original Charge Amount − Payments Applied − Existing Adjustments

For example, on a charge with an original amount of $100.00 and no tax, with $30.00 in payments applied and $20.00 in existing adjustments applied, the maximum allowed adjustment is $50.00.

If you attempt to save an adjustment greater than the maximum allowed amount, the System prevents the save and displays an error message indicating the maximum allowed adjustment amount.

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Applying multiple adjustments to the same charge

You can add more than one adjustment line item to the same charge over time.

• Each adjustment is validated against the charge's current remaining balance at the time it is created.
• Each adjustment appears as a separate line item in the charge details.
• The charge Total reflects the cumulative effect of all adjustments applied.

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Editing and deleting charges that have adjustments

Once a charge has one or more adjustment line items applied to it, the original charge is locked to preserve the financial audit trail.

• If you attempt to edit the original charge line item amount, the System prevents the edit and displays a message indicating that charges with adjustments cannot be edited.
• If you attempt to delete the charge, the System prevents the deletion and displays a message indicating that charges with adjustments cannot be deleted.

Charges that do not have any adjustments applied retain their existing edit and delete behavior.

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Audit Logging

Each time an adjustment line item is created and saved, the System records an audit log entry so the change can be traced. The entry captures the date and time, member name, username, source, IP address, and the action performed.

The action is recorded in the following format:

Ledger: Adjusted Charge ([Charge ID]) by [adjustment amount]: [original amount] to [new amount] ([Family Name] ([Family ID]))

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How Adjustments Affect Sales Tax

iClassPro recognizes sales tax on amounts that have actually been collected. An adjustment can only reduce a balance that is still owed, so it is always reducing an uncollected amount — and the uncollected tax attached to that amount is removed at the same time. This keeps you from remitting tax on revenue you never received.

The key point for staff: the amount you type is the amount the balance moves by. The System splits that figure into its base and tax components internally. Tax is never added on top of what you enter.

This works identically for Locations configured for inclusive tax and for exclusive tax. A line item billed at $100.00 with $8.00 tax totals $108.00; with no payments applied, a $50.00 adjustment leaves $58.00 owed under either configuration.

Related behaviors:

• Tax already collected on payments is never touched. Only uncollected tax is reduced.
• Where more than one tax applies to the line item, the reduction is split across each tax in proportion to its current amount.
• An adjustment that brings a line item to exactly $0.00 clears all remaining uncollected tax on that line item to $0.00.
• If your tax rate has changed since the charge was created, the reduction uses the rate stored on the original charge, not your current Location setting.
• If the charge carries a Promo Code discount, the tax reduction is based on the discounted amount that was taxed. The Promo Code discount itself is not recalculated and continues to report at its original value.

IMPORTANT: Removing uncollected tax from adjusted line items will change totals on reports that read tax records, including the Consolidated Tax Report and the Tax Reconciliation Report (FIN-16). This shift is expected and reflects that the tax is no longer owed.

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Troubleshooting & FAQs

• Why are the ADJUSTMENT and ADJUSTMENT - BAD DEBT options greyed out?
  • The options are greyed out for either of two reasons. Your staff member record may not have the Apply Charge Adjustments permission enabled, or the charge you are editing has a $0.00 balance. Adjustments can only be applied to charges with a remaining balance greater than $0.00.
• Why can't I edit or delete a charge?
  • Once a charge has one or more adjustment line items applied, it can no longer be edited or deleted. This preserves the financial audit trail. Charges without adjustments retain their normal edit and delete behavior.
• Why can't I save my adjustment?
  • The adjustment amount likely exceeds the maximum allowed. The maximum is the original charge amount minus payments applied minus existing adjustments. Reduce the adjustment amount to at or below that maximum and save again.
• Can I edit or remove an adjustment after I create it?
  • No. Adjustment line items have no action icons and cannot be edited or deleted once created.
• How can I view the adjustments that have been applied?
  • Staff can run the Adjustment Line Items Report to review adjustments that have been applied.
    • See What is the Charge Adjustments Report (FIN-31)? for details.
  • Charge adjustments can also be viewed on the Category List Report (FIN-6).
    • See What is the Category List Report (FIN-6)? for details.
• Which adjustment type should I use?
  • Use ADJUSTMENT - BAD DEBT for writing off uncollectible debt, and ADJUSTMENT for all other corrections and for System-generated adjustments such as Point of Sale returns.
• Does the amount I enter include tax?
  • Yes. The balance owed moves by exactly the figure you type. The System works out the base and tax portions from inside that amount; tax is never added on top.
• Why did my tax totals change after I wrote off a charge?
  • Writing off an unpaid balance also removes the uncollected tax on that amount, since the tax is no longer owed. Reports that read tax records will reflect the lower figure. This is expected.
• Why can I adjust more than the amount the charge was billed at?
  • The maximum is the line item total including tax, less anything already paid or adjusted off. A line item billed at $100.00 with $8.00 tax can be adjusted by up to $108.00 if nothing has been paid against it.

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Related Articles

• What is the Charge Adjustments Report (FIN-31)?
• What is the Category List Report (FIN-6)?
• How Do I Edit/Correct an Existing Charge?
• How Do I Configure Staff Permissions and User Groups?

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