Final answer:
When an invoice is processed as a residual payment, the system automatically deducts the remaining balance from the original invoice and marks it as paid.
Step-by-step explanation:
When an invoice is processed as a residual payment, the system behaves by automatically deducting the remaining balance from the original invoice and marking it as paid. This means that the remaining amount of the invoice is cleared, and there is no new invoice generated or credit note issued. The payment is applied to the specific invoice and not split between other invoices.
When an invoice is processed as a residual payment, the system typically generates a new invoice for the remaining balance and links it to the original invoice. This approach allows for accurate tracking of the payment history and outstanding amounts. The new invoice serves as a record specifically for the residual or remaining amount, and it is associated with the original invoice to maintain a clear audit trail.
This method ensures transparency in financial transactions and helps in reconciling payments. It also allows businesses to provide detailed documentation to their clients or customers regarding the specific items or services covered by the residual payment. This process aids in maintaining accurate and organized financial records within the invoicing and payment system.