How do I account for a partial refund and an overpayment?

SOLVED

How do we account for a refund? As an example, we hired a floor sander to sand the office floor. We had to to pay a deposit for this, which came out of the initial payment made. On return of the item, we have been refunded over 50% of the hire charge. I just don’t know how to account for this.

Secondly, how should we be dealing with an overpayment? We have a client in the Virgin Islands who has overpaid an invoice (due to transaction fees and differences in exchange rates). Our invoice within Sage is for £330, and the payment received is for £339.86. I therefore cannot match this against the invoice logged within Sage, and can’t match it without making an adjustment. The only adjustment I seem to be able to make is to take money off—I cannot add on an additional payment…

Thanks in advance!

Oli

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    Hi Oli,

    Thanks for using Sage City.

    There a few different ways to record refunds in Start. For your example above you would record the deposit and the payment made out of your bank, you would then just record a money in transaction for the amount you have been refunded. You may want to adjust the category visibility if you want to use the same category used in your first two payments. You can follow the steps here to adjust the visibility. These transactions aren't linked together in any way so I recommend to have a similar reference for all of the transactions so they can be reconciled easily. If you ever needed to refund a receipt against a sales invoice you can check out our help article here which covers the steps for this.

    For your second query you will need to record the extra payment as a standalone money in transaction for the same customer. If you are adding this from your bank feeds you need to match the payment against the invoice like you would with a regular transaction. Once you have selected the invoice to match it against you should get a button under step 2 called 'new transaction'. This will allow you to create an other receipt transaction from the remaining £9.86. Your step 2 section should now be showing £330 against the invoice and £9.86 against a new receipt which will be added, you can then save that as normal. Again I would recommend adding a reference here over both transactions so you can easily tell they are related. 

    If you deal with a lot of transactions with refunds, allocations and over payments I would recommend looking at upgrading to Accounting as Accounting has more features to assist recording these transactions such as payments on account, standalone credit notes and adding refunds are much easier. If you wanted to find out more information about accounting or get clarification on my advice above I would recommend giving us a call on 0191 917 4311 or we can cover the steps on our daily Q&A here.

    Hope this helps. If this has answered your question please click More > Verify Answer.

    Kind Regards,

    Jack Middleton
    Sage Business Cloud Customer Services
    Sage UKI

  • 0 in reply to Jack Middleton

    Hi Jack,

    Thanks for this. I tried this, but I get the following message:

    Overseas Customer

    You cannot record Other Receipts for this contact. To correctly deal with VAT for overseas contacts, you must use the Invoice option.

    We have very few overseas customers and process very few refunds - hardly any. So it seems silly to upgrade to Accounting unless we are forced too.

    Thanks,

    Oli

  • +1 in reply to Oli OConnor
    verified answer

    Hi Oli, 

    Sorry I missed that the customer was based in the Virgin Islands. There isn't an ideal way to process this on Start but we should be able to add the transaction so your reports and your bank balances are accurate. Am I correct in assuming that the customer has actually paid in a foreign currency but it has only come into your bank as GBP?

    The only way to record this would be to generate a separate invoice for the over payment. You can then match the invoice against the invoice for £330 and the new invoice for the over payment of £9.86. If this doesn't need to be refunded you can leave this as it is. If the customer is getting a refund for this you can record a refund against the receipt following the steps on the article here. If they are only getting refunded part of this amount you need to record the refund following the steps here.

    Hope this helps.

    Kind Regards,

    Jack Middleton
    Sage Business Cloud Customer Services
    Sage UKI

Reply
  • +1 in reply to Oli OConnor
    verified answer

    Hi Oli, 

    Sorry I missed that the customer was based in the Virgin Islands. There isn't an ideal way to process this on Start but we should be able to add the transaction so your reports and your bank balances are accurate. Am I correct in assuming that the customer has actually paid in a foreign currency but it has only come into your bank as GBP?

    The only way to record this would be to generate a separate invoice for the over payment. You can then match the invoice against the invoice for £330 and the new invoice for the over payment of £9.86. If this doesn't need to be refunded you can leave this as it is. If the customer is getting a refund for this you can record a refund against the receipt following the steps on the article here. If they are only getting refunded part of this amount you need to record the refund following the steps here.

    Hope this helps.

    Kind Regards,

    Jack Middleton
    Sage Business Cloud Customer Services
    Sage UKI

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