You can enter a negative amount on an agent ledger transaction to correct an earlier earning or deduction. The transaction stays in the category you choose, so a refunded desk fee stays a deduction and a clawed-back commission stays an earning. Your category totals, salesperson invoices and pay run summaries stay accurate, and a refund isn't taxed as commission.
This article covers when to use a negative amount, how to enter one, how it shows on the ledger and invoice, and what to watch out for.
When Should I Use a Negative Amount?
Use a negative amount when you're correcting or reversing part of an earlier transaction, for example:
- Refunding a charge - you deducted a $300 desk fee but should only have charged $200. Enter a Deduction of -100.
- Clawing back commission - an agent was paid $200 too much commission. Enter an Earning of -200.
Choose the category of the transaction you're correcting, not the direction the money is moving. A refund of a deduction is a Deduction, even though it puts money back in the agent's pocket.
To cancel a whole transaction instead, use Reverse. See - Commissions Pay Run: Step 2 - Edit Commissions.
How Do I Enter a Negative Amount?
- Go to Financials > Agent Ledgers and open the agent's ledger.
- Click Add transaction and choose Add Transaction.
- Select Earning or Deduction to match the transaction you're correcting.
- In Amount (inc GST), type the amount with a minus sign, for example -100.
- Choose the transaction type and account, add a description, and save.
You can also add a negative amount during a pay run, from the same Add Transaction window in Step 2.
❗ Please Note: You now need to choose Earning or Deduction every time you add a transaction. If you don't, you'll see "Select either Earning or Deduction" and the transaction won't save. This stops a charge being recorded as a payment to the agent by mistake.
How Does a Negative Amount Show on the Ledger?
The category column shows Earnings or Deductions, based on what you chose. Corrections sit with the transactions they correct.
The amount column shows deductions in brackets. Because a refund reduces your deductions, it shows without brackets. For example:
- Desk fee: Deductions, (300.00)
- Desk fee refund: Deductions, 100.00
Both rows sit under Deductions, and the deductions total is (200.00). A clawed-back earning shows in brackets under Earnings.
How Does It Affect the Invoice, Tax and Xero?
- Salesperson invoice and pay run summary - the correction reduces the total for its category. A refunded deduction reduces the expenses total, not the earnings.
- Withholding tax - a refunded deduction is never treated as an earning, so it isn't taxed as commission. A clawed-back earning reduces the withholding tax for that pay run, which is correct when you're fixing a mistake in the same pay run.
- Xero - the correction posts to the account you choose on the transaction. Choose the same account as the original charge to reverse it in Xero.
❗ Please Note: If you're clawing back an earning that was marked Exclude from withholding tax, tick Exclude from withholding tax on the clawback too. Otherwise it reduces the withholding tax on the agent's other earnings in the same pay run. You can also use Reverse on the original transaction instead.
What Should I Watch Out For?
- Rex doesn't check the amount. You can refund more than was charged in a category, and Rex won't warn you. Double check the figure before you save.
- Deductions can't be excluded from withholding tax. If you tick Exclude from withholding tax on a deduction, you'll see "A deduction cannot be excluded from withholding tax; the exemption applies to earnings only."
- Older transactions aren't changed. Transactions added before this update show exactly as they did before.
- The Agent Expense Report groups transactions by their transaction type, so a correction may show under the other heading and as a negative figure.
❓ FAQs
How do I refund a charge I deducted from an agent?
Add a transaction, choose Deduction and type the amount with a minus sign. It stays a deduction, reduces the deductions total and isn't treated as an earning.
Why does my refund show without brackets when the deduction above it has them?
Deductions show in brackets because they reduce what the agent is paid. A refund adds back to what the agent is paid, so it shows without brackets. Both rows sit under Deductions and the total is correct.
Can I use a negative amount on an earning?
Yes. Choose Earning and type the amount with a minus sign. It stays under Earnings and reduces the earnings total.
Why do I have to choose Earning or Deduction every time now?
Leaving it on a default could record a charge as a payment to the agent. Choosing each time makes sure every transaction goes in the right place.
Is this available for my agency?
Yes. It's available to every agency using Agent Ledgers in Australia, New Zealand and the UK.