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Entries required for refund to customer for duplicate payment and supplier for overpayment .. can someone advise please
Ireland Creditor and debtor refunds
- Thread starter Audrey Kennedy
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Steve-LevelUp
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Hello Audrey.
There are a few possible issues here. The answer can depend on what system you are using.
if a customer overpaid, you could just record their over payment on their account, just like you would if they paid a standard invoice. (this entry would Dr Cash, Cr. AR). Some systems have a specific feature allowing you to refund a client, or the entry would otherwise reverse the above (Dr. AR, CR. Cash)
It would be similar for a supplier over payment, except reversed in concept. If you ended up double paying a vendor, then this likely happened for one of two reasons.
1. You double entered an invoice. In this case, just book a credit to reverse this invoice. The payment would then sit as an over payment on your account. You can then converse with your supplier that you overpaid and they can either refund you (then you would Dr. Cash, Cr. AP), or you can leave the credit on file for future orders.
2. You ended up paying an invoice twice (if you pay outside of your accounting system). This is similar to the above, except you need to ensure that you record the payment in the system (Dr. AP, Cr. Cash) to represent these funds leaving your bank account. If you don't book this entry, your bank reconciliation will be off. After that, then step 1 can be followed regarding a refund.
If this doesn't quite answer what you are looking for, then please reply here, and let me know.
Regards.
Steve
There are a few possible issues here. The answer can depend on what system you are using.
if a customer overpaid, you could just record their over payment on their account, just like you would if they paid a standard invoice. (this entry would Dr Cash, Cr. AR). Some systems have a specific feature allowing you to refund a client, or the entry would otherwise reverse the above (Dr. AR, CR. Cash)
It would be similar for a supplier over payment, except reversed in concept. If you ended up double paying a vendor, then this likely happened for one of two reasons.
1. You double entered an invoice. In this case, just book a credit to reverse this invoice. The payment would then sit as an over payment on your account. You can then converse with your supplier that you overpaid and they can either refund you (then you would Dr. Cash, Cr. AP), or you can leave the credit on file for future orders.
2. You ended up paying an invoice twice (if you pay outside of your accounting system). This is similar to the above, except you need to ensure that you record the payment in the system (Dr. AP, Cr. Cash) to represent these funds leaving your bank account. If you don't book this entry, your bank reconciliation will be off. After that, then step 1 can be followed regarding a refund.
If this doesn't quite answer what you are looking for, then please reply here, and let me know.
Regards.
Steve