When a contract invoice needs to be corrected, the right way is to credit it from the invoice itself so BlueCollar can trace the correction back to the contract. Doing it correctly keeps your billings, retainage, and revenue recognition in sync; doing it the wrong way silently breaks them.
Video walkthrough:
Two settings must both be in place to credit an invoice in a closed accounting period. They work together like two halves of one key:
If either one is missing, the correction won't go through.
This is valuable because crediting from the invoice creates a "Created From" link back through the invoice to the contract — and that link is what lets BlueCollar treat the credit as a billing correction rather than a stray transaction.
A credit memo created from a contract invoice is treated as a negative billing. Because the chain back to the contract exists:
A standalone credit memo — one not created from a contract invoice — has no impact on contract billings in BlueCollar. Without the "Created From" link back through an invoice to the contract, none of the BlueCollar tools (Contract, Billing, WIP, Revenue Recognition) will detect it.
Worse, if that standalone credit memo is tagged to a BlueCollar Project, it will still hit the GL (e.g., debit Sales / credit AR). That creates a dangerous mismatch: the GL shows a revenue reduction the revenue-recognition tool knows nothing about, and the next Rev Rec run will be based on billing data that no longer matches the GL — which causes an error during revenue recognition.
Rule: always credit a contract invoice with the Credit button on the invoice. Never create a standalone credit memo tagged to a BlueCollar Project.
Because Sales Orders aren't natively aware of credit memos, a few situations call for an alternative:
When a credit memo is applied against an invoice, AIA forms may show the credit as a negative invoice in a future period, because the native Start/End Date fields don't exist on credit memo records. For AIA purposes, treat a credit memo applied against an invoice as belonging to the same period as the original invoice.