Adjustment Transactions – A Guide and Library

Adjustment Transactions are used to correct errors or make changes to a Commission Request/Transaction that was closed prior to the last Month End Close. These Transactions are like journal entries, and are used to ensure the final distribution of commissions is accurately reflected in the system, without being able to make edits. The key principle to remember when handling Adjustment Transactions is they should reflect the specific differences between the original Transaction and correction that needs to be made, you are not recreating the entire Transaction. 

Key Facts on Adjustments:

1. Adjustments do not change the original posted Transaction; those terms remain exactly as they were processed since the month has been closed. The adjustment reflects the addition or subtraction of specific transactional points needing to be adjusted.
2. Adjustments do not change reports of production already part of a closed month; they are reflected in the month the adjustment is posted.
3. Adjustments affect the 1099 income of the year they are posted, not the year of the original, incorrect Transaction. 
4. Adjustments must be saved and the Deposit imported into AccountEdge, even if no funds are being received or issued. 
5. An adjustment cannot be done on an adjustment. 
6. Once a Reverse Adjustment is present no other adjustment can be added, and a Reverse Adjustment cannot be added if any other adjustment type is already present.  

Adjustment Types: 

• Commission Distribution: Used to change the commission split between two or more agents.
  • Example: Rainmaker received 80% commission but should only have received 70% commission, or Rainmaker was left off a Transaction and should have received 50% or commission when 100% was originally paid to team member.
  • This cannot be used to adjust the commission distribution for a Transaction with only one agent.
• Outside Referral: Used to add or correct a referral.
• Reversal: If no other adjustment options are available, a Reversal can be completed. Can be used to correct any type of error made to the Transaction in a prior period. It will cancel/terminate the original transaction. 
  • Reversal can only be used if it's the first time an adjustment is being completed on the original Transaction. For example, if an Outside Referral or Commission Distribution Adjustment for a Transaction has been completed and an error is later found, a reversal can no longer be done.  
  • Use of Reversal can impact royalty and must be taken into consideration before using this type of Adjustment. 

To ensure accurate processing of Transactions, it's important to use the appropriate adjustment for each Transaction type:

Adjustment Transactions should be put on their own deposit to keep things simple and make sure everything is in balance.