Overpayment Received

If you have receive too much money from a client (e.g. you were owed £2,300.00 but have received £3,000.00 by mistake) then…

• you can leave the surplus (e.g. the £700 extra) in the Cashbook to be reconciled at some later date
• or you can reconcile the surplus against a dummy invoice and then issue a credit note to refund the client

Do the former where you expect to be able to reconcile the surplus in the next couple of weeks (e.g. because by then you will have issued a new invoice to the client for £700 or more), otherwise use the latter, in which case you may first need to set-up a “Client Overpayments” account. Starting from Durell’s Main Menu…

• Click the “Accounts” button
• Click the “Setup” button (n.b. the red one for setting-up Accounts, not the green one on the Main Menu)
• Click the “Nominal accounts” tab
• Check if you already have a Sales Nominal for “Client Overpayments”, and if not create one like that shown below (see also “Set-up Nominal Accounts & Budgets”)

• Exit back to the “Accounts” menu and click the “Sales” button

• Click the “Starburst” or “New” button and create an INVOICE for the amount of the overpayment (e.g. the £700 in this example)

o Select the same client

o The “Type” dropdown is set to “Invoice”

o The “Date” is as close to the invoice as possible

o Enter the “Policy holder” and “Policy number” as “OVER PAYMENT”

o Click the “Add” button to add a line for the unpaid amount, in which you…

o Select the “Client Overpayments” nominal account (e.g. “CLOV”)

o Save the invoice with the “Save” icon on the toolbar

• …all as shown below (see also “Sales & Purchase Ledgers, Invoices”)

• Exit back to the “Accounts” menu and click the “Cashbook” button
• Double-click the partially reconciled receipt in question (e.g. the receipt for £3000.00, in this example)
• On the “Reconcile Account for…” screen double-click and reconcile the new “over payment” invoice
• The whole receipt should now be fully reconciled, so you can exit as normal, via the “Exit door” button

• Exit back to the “Accounts” menu and click the “Sales” button again

• Click the “Starburst” or “New” button and now create a CREDIT for the amount of the overpayment (e.g. the £700 in this example)

o Ensure the “Type” dropdown is set to “Credit”

o Everything else is similar to the overpayment INVOICE you just made, though you’ll see that the sums are negative

• Save the credit note, then exit back to the “Accounts” menu and click the “Cashbook” button again

• Click the “Starburst” or “New” button and now create a PAYMENT to the client for the amount of the overpayment (e.g. the £700 in this example)

o Make sure you pay the credit from the SAME BANK ACCOUNT

o Reconcile as normal and don’t forget to put your real life cheque in the post (e.g. for the £700)

So overall your bank account should have received the surplus, then had it paid out again, while your Sales Nominal account first had a positive amount sent to it by the extra invoice, which was then negated by the credit.