How Does NetSuite’s ‘Void Transactions Using Reversing Journals’ Setting Work?

The "Void Transactions Using Reversing Journals" setting dictates the method NetSuite employs when a transaction is voided. Its behavior varies based on whether the option is enabled or disabled.

When this option is turned OFF:

Transactions may be voided by directly neutralizing their General Ledger (GL) impact without creating a Journal Entry. For many transaction types, a 'Void' button may be available. However, for certain transactions like invoices, a credit memo is often the recommended reversal method, or the 'Delete' option may be present. Pressing a 'Void' button marks the transaction as Voided, which neutralizes its GL impact and reopens anything that was being closed by it. This is done without the creation of a Journal Entry; NetSuite sets the void behind the scenes to kill off the transaction.

When the option is turned ON:

The transaction types listed in the help of that function have a 'Void' button. These include: Check, Bill Payment, Payroll Liability Payment, Customer Refund, Tax Payment, Tax Liability Check. Pressing this button creates a Journal Entry containing the exact GL reversal of the transaction. The original transaction is still set to voided, and it reopens any transactions that had been closed by it. However, transactions not in the above list no longer have a 'Void' button. They can only be deleted (or credited), they can no longer be voided.

To summarize, enabling this preference allows voiding of the listed transaction types by creating a reversing Journal Entry. When the preference is disabled, transactions are voided by directly neutralizing the GL impact without a Journal Entry, and for some transaction types, the 'Delete' option may be available as an alternative to a 'Void' button.