Overview
Note: A new refund process was added with the Summer ’22 release. For more information, refer to the Issue a Refund from a Cash Receipt and/or Issue a Refund from a Credit Memo article. The information in this article is only applicable if you are not currently on the Summer ’22 release.
A Customer Overpayment occurs when a customer pays more than they were billed. As a result, the Cash Receipt will continue to have a balance after being applied to the original Billing.
Keep an Overpayment
If a customer overpayment is small and immaterial you may wish to simply keep it rather than taking the trouble to refund it. In this case please take the following steps:
- Create a Billing for the customer. Set the GL Account on the Billing Line to sales or miscellaneous revenue account. Post the Billing.
- Navigate to the Cash Receipt with the overpayment. Apply the balance of the Cash Receipt to the overpayment.
Refund an Overpayment
If a customer overpayment is material, you will want to refund the amount to the customer.
- Create a Billing for the customer. Set the GL account on the Billing line to a balance sheet clearing account such as "Accrued Expenses." You may want to create a specific GL Account for this use case. Post the Billing.
- Navigate to the Cash Receipt with the overpayment. Apply the balance of the Cash Receipt to the overpayment.
Note: Ensure that the Account Type is marked as Customer and Vendor. - Create an Account Payable for the same amount in step 1. Set the GL Account on the Account Payable Line to a balance sheet clearing account used in step 1. Post the Account Payable.
- Create a Cash Disbursement by following the standard instructions for creating a single or batch Cash Disbursement(s).
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