Over Payments
If a customer overpays a bill (i.e., we receive more cash than receivables), we strongly recommend you set up the system to NOT keep the excess credit on the customer's regular contracts. Rather, we recommend you segregate the receivable onto an "excess credit" contract. If you do this, the system will transfer any excess credits to the regular contracts at bill completion time. When this transfer occurs, the same accounting described under Payments Segment Financial Transaction Algorithms Transfer Holding Amounts To Payable GL Accounts occurs as shown in the following example. Note: this example assumes an excess credit of $110 was transferred to a normal contract and the normal contract had $10 of held payables.
Event | Normal Contract GL Accounting | Excess Credit Contract GL Accounting |
---|---|---|
Bill segment created |
A/R 110 Revenue <100> Tax Holding <10> |
|
Payment of $300 is received |
Cash 110 A/R <110> Tax Holding 10 Tax Payable <10> |
Cash 190 Overpay <190> |
Bill segment created |
A/R 110 Revenue <100> Tax Holding <10> |
|
Transfer excess credit amount to normal contract (when bill is completed). |
Xfer 110 A/R <110> |
Overpay 110 Xfer <110> |
Because the transfer adjustment is the equivalent of a cash relief outstanding tax holding is relieved in proportion to the amount of receivables that are reduced by the transfer |
Tax Holding 10 Tax Payable <10> |
|
Net affect of the transfer |
Xfer 110 A/R <110> Tax Holding 10 Tax Payable <10> |
Overpay 110 Xfer <110> |