Reverse or Correct a Journal Entry

Aclarian allows you to reverse or correct a previously posted journal entry without changing the original entry.

Both options create a new journal entry in the system. They do not edit the original posted entry. This approach preserves a complete and accurate audit trail.

Use this article to understand the difference between a reversal and a correction, when to use each option, and what to expect after the new entry is created.

Important
Posted journal entries are never edited directly in Aclarian.

To correct an issue, create an additional journal entry using either the Reverse or Correct option.

Why reversals and corrections are used

If a journal entry was posted in error, you may need to either fully reverse it or adjust part of it.

For example, a journal entry may have posted the amount to the wrong expense account. In that situation, you would not change the original entry. Instead, you would create a new entry that produces the correct financial result.

This process helps maintain:

• Accurate financial records
• A clear history of activity
• A complete audit trail

When to use Reverse

Use Reverse when the original journal entry is completely incorrect and should be fully removed from the books.

When you reverse an entry, Aclarian pulls in the original entry and flips the debits and credits. This creates a new entry that offsets the original and brings its net effect to zero.

Use this option when you want to start over from the beginning.

Example of a reversal

If the original journal entry debited Office Supplies Expense for $1,000 and credited Accounts Payable for $1,000, the reversal would:

• Credit Office Supplies Expense for $1,000
• Debit Accounts Payable for $1,000

After the reversal is completed, the net impact of the original entry is zero.

Note
Use a reversal when the entire entry is wrong.

This is the best option when no part of the original posting should remain.

When to use Correct

Use Correct when only part of the original journal entry is wrong and you need to adjust specific accounts without fully undoing the entry.

When you choose Correct, Aclarian brings in the original entry as it was originally posted. You can then adjust the lines to create the net effect you need.

This option is useful when one part of the entry should remain the same, but another part needs to be moved or updated.

Example of a correction

Assume the original journal entry posted:

• Debit Office Supplies Expense for $1,000
• Credit Accounts Payable for $1,000

Later, you determine that the expense should have been recorded to Equipment Expense instead of Office Supplies Expense.

In that case, the correcting entry would:

• Debit Equipment Expense for $1,000
• Credit Office Supplies Expense for $1,000

The Accounts Payable line from the original entry stays in place. The correction only moves the expense from one account to another.

Note
Use a correction when only part of the entry is wrong.

Think in terms of what additional entry is needed to produce the correct final result.

How to reverse or correct a previous journal entry

1. Open a new Journal Entry Form.
2. Locate the option asking whether you want to reverse or correct a previously recorded journal entry.
3. Enter the original Entry Number.
4. Press Tab to load the original entry details.
5. Select either Reverse or Correct, depending on the result you need.

If you select Reverse, the system loads the original lines in reverse.

If you select Correct, the system loads the original lines as originally posted so you can adjust them.

1. Review and update the journal entry lines as needed.
2. Complete the required header fields, such as fiscal period and effective date.
3. Save the form.
4. Submit the form for approval.

What happens after the new entry is posted

Once the reversal or correction is completed, the new journal entry appears as a separate transaction in the system.

The original journal entry remains unchanged, but it is updated to show that a reversal or correction was created from it.

How the original journal entry is updated

After a reversal or correction is posted, the original journal entry displays a Reversals or Corrections section.

This section shows:

• The new journal entry number
• Whether the new entry is a Correction or Reversal
• The status of the new entry
• When it was created
• A link to open the related form

This makes it easier to trace how the original entry was adjusted over time.

Important
Reversals and corrections create a linked record between the original entry and the new entry.

This helps maintain visibility into past activity and supports audit review.

How to decide which option to use

Use Reverse when:

• The entire entry is incorrect
• You want to remove the full impact of the original posting
• You plan to start over with a new entry

Use Correct when:

• Only part of the entry is incorrect
• Some original lines should remain unchanged
• You need to move an amount from one account to another

Summary

Aclarian uses new journal entries, not edits to posted entries, to fix journal entry errors. A reversal fully offsets the original entry, while a correction adjusts only the part that was wrong. Both options preserve a clear audit trail and help ensure your financial records remain accurate.

Need help?
If you have questions about reversing or correcting a journal entry, contact the Aclarian Client Support team for assistance.

• Email: clientsupport@aclarian.com
• Contact your assigned Customer Support liaison