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A number of scenarios can occur when a customer overpays…..from the situation where they pay by check either at the time of picking up an order or via the mail. This document explains the various scenarios and what should be done within Profits Plus.
The same dollar amounts will be used for the explanations. Invoice # 10120 is for $49.50 and the check received is for $50.00
Situation 1: Invoice 10120 is posted to the customer’s account for $49.50, they send a check for $50.00, and you want to ‘write off’ the $.50 at the time of Cash Entry.
Through Cash Receipts Entry and Editing (Task 2 in A/R module), enter the $50.00 as usual, however in field #8 (Disc $) enter the 50 cents as a negative amount (-50), then continue to the second screen. In the Apply-Amt field enter 5000 (for the $50.00) and in the Disc Allow field enter –50. Post as usual.
Situation 2: Invoice 10120 is posted to the customer’s account for $49.50. Payment is received for $50.00, entered through Cash Receipts & posted. The $49.50 was applied to the invoice. The invoice #10120 & the $49.50 payment are still on the customer’s account. The $.50 is left as a payment/credit on the account. Now you have decided to ‘write off’ the $.50. A couple of steps need to be taken:
Situation 2, Step 1: Use Customer inquiry (Task 27 in A/R module) to find the overpayment document number and the invoice number. Proceed to Change apply-to #’s (Task 3 in A/R module) and enter the overpayment document number and apply it to the invoice number. In this example apply it to invoice #10120.
Situation 2, Step 2: Cash Receipts Entry & Editing (Task 2 in A/R module): Enter a new record as if a cash payment was received from the customer for the amount that was "overpaid". The important fields are listed below:
..Field 3 Enter the customer number
..Field 4 Use a current month date
..Field 9 Enter the amount "overpaid" by the customer as a negative amount (-50)
..On the second screen, enter the invoice number that was "over" paid…be sure to enter a
negative amount in the "apply amt" field (-50)
Situation 2, Step 3: Enter another new record in Cash Entry & Editing. The important fields are listed below:
..Field 3 Enter the customer number
..Field 4 Use a current month date
..Field 14 Enter the GL account number that is used for over/shorts (usually an
expense account)
..Field 15 Enter the amount of the "over" payment as a positive (which will be the same amount that was entered in field 9 of step 2….50).
The “Total Amount Received:” on the cash edit list and cash posting register for step 2 and 3 should be zero. The “Total change to A/R:” on the cash edit list and cash posting register for step 2 and 3 should be negative $.50 cents.
Overall effect:
First record Step 2: a debit to AR and a credit to cash
Second record Step 3: a debit to cash and a credit to the selected GL account
Therefore, a "wash" to the cash account, an increase in AR to clear the customer's
account and a decrease to the selected expense account are made once the transactions
are posted.
When the invoices/payments are ‘cleared’ at month end, all the records involved will go to the Cleared AR History file (Task 24).
Situation 3: Invoice 10120 is posted to the customer’s account for $49.50. Payment is received for $50.00, entered through Cash Receipts & posted. The whole $50.00 was applied to the invoice. The invoice #10120 for $49.50 & the $50.00 payment are still on the customer’s account. Now you have decided to ‘write off’ the $.50. A couple of steps need to be taken:
Situation 3, Step 1: Cash Receipts Entry & Editing (Task 2 in A/R module): Enter a new record as if a cash payment was received from the customer for the amount that was "overpaid". The important fields are listed below:
..Field 3 Enter the customer number
..Field 4 Use a current month date
..Field 9 Enter the amount "overpaid" by the customer as a negative amount (-50)
..On the second screen, enter the invoice number that was "over" paid…be sure to enter a
negative amount in the "apply amt" field (-50)
Situation 3, Step 2: Enter another new record in Cash Entry & Editing. The important fields are listed below:
..Field 3 Enter the customer number
..Field 4 Use a current month date
..Field 14 Enter the GL account number that is used for over/shorts (usually an
expense account)
..Field 15 Enter the amount of the "over" payment as a positive (which will be the same amount that was entered in field 9 of step 2….50).
The “Total Amount Received:” on the cash edit list and cash posting register for step 1 and 2 should be zero. The “Total change to A/R:” on the cash edit list and cash posting register for step 1 and 2 should be negative $.50 cents.
Overall effect:
First record Step 1: a debit to AR and a credit to cash
Second record Step 2: a debit to cash and a credit to the selected GL account
Therefore, a "wash" to the cash account, an increase in AR to clear the customer's
account and a decrease to the selected expense account are made once the transactions
are posted.
When the invoices/payments are ‘cleared’ at month end, all the records involved will go to the Cleared AR History file (Task 24).
Situation 4: Invoice 10120 is posted to the customer’s account for $49.50. Payment is received for $50.00, entered through Cash Receipts & posted. The $49.50 was applied to the invoice. The invoice #10120 & the $49.50 payment are NOT still on the customer’s account. They are cleared off into Cleared A/R history (Task 24 in A/R module). The $.50 is left as a payment/credit on the account. Now you have decided to ‘write off’ the $.50. A couple of steps need to be taken:
Situation 4, Step 1:
You will need to go into Sales entry & editing (Task 1 in the A/R module) & enter a ZERO debit memo for the customer & post it. The important fields are listed below:
01. Invoice # :_____Numeric. Assign an invoice number that is out of the range of the system generated invoice or CM numbers.
02. Inv date:______Enter a date in the current month
05. Sale type:_Use transaction type of “5” – debit memo
The system will prompt: “Check for duplicate credit memo or debit memo?”.
Answer Y
06. Customer # :______
15. Apply to:______ For a debit memo, leave this field blank.
28. P/O #: This is a 20 character alphanumeric notation. Type an abbreviation for your records, example: “OVERPAYMENT WRITEOFF”
All the amount fields will be left blank on this zero debit memo. This will need to be posted.
Situation 4, Step 2: Use Customer inquiry (Task 27 in the A/R module) to find the overpayment document number. Proceed to Change apply-to #’s (Task 3 in the A/R module) and enter the overpayment document number and apply it to the debit memo # you posted in step 1.
Situation 4, Step 3:
Through Cash Receipts Entry & Editing (Task 2 in A/R the module):
Enter a new record as if a cash payment was received from the customer for the amount that was "overpaid". The important fields are listed below:
..Field 3 Enter the customer number
..Field 4 Use a current month date
..Field 9 Enter the amount "overpaid" by the customer as a negative amount (-50)
..On the second screen, enter the DEBIT memo number that you just posted…be sure to enter a negative amount in the "apply amt" field (-50)
Situation 4, Step 4:
Enter another new record in Cash Entry & Editing . The important fields are listed below:
..Field 3 Enter the customer number
..Field 4 Use a current month date
..Field 14 Enter the GL account number that is used for over/shorts (usually an
expense account)
..Field 15 Enter the amount of the "over" payment as a positive (which will be the same amount that was entered in field 9 of step 3, ….50).
The “Total Amount Received:” on the cash edit list and cash posting register should be zero. The “Total change to A/R:” on the cash edit list and cash posting register should be negative $.50 cents.
When the invoices/deibts/payments are ‘cleared’ at month end, all the records involved will go to the Cleared AR History file (Task 24).
Situation 5: Customer comes to the counter to pick up an order and brings a check ($50.00) that is more than what is owed ($49.50) and you’ll be giving them the ‘change’ of $.50.
Bring up the order, go to the Collection Screen and in the Pay Method column enter 5000 in field #12 (Check:) and the check number in field #13. Once you finish with that column, the following message will appear:
“If OVERPAY is refunded, YOU MUST fill out a CPO slip for $.50. Be sure to write CHECK # xx and the INVOICE # on the CPO slip. This should be placed in your cash drawer along with the check”. The printed invoice will show: “Balance Due$: .50-“. Give the customer the $.50.
When the invoice is posted to the A/R module, go into Cash receipts entry & editing (Task 2), there will be a transaction for the check. Go into Change existing cash (Sub-task 2) & bring up the check transaction. Go to Field 9 Cash $: enter the 50 cents as a negative amount (-50), then continue to the second screen. In the Apply-Amt field enter 4950 (for the $49.50). Post as usual.