One of my client's customers has overpaid what they owed on their invoice by a small amount of £1.80 (the invoice itself was for around 30K). My client is not going to take any steps to refund this due to the small amount involved. Obviously this will mean a small credit balance will remain outstanding on the customers account (my client is doing no further work for them). I realise that if the customer still owed a small amount this could be written off as a bad debt, however I'm not sure what postings to make to tidy the books up and remove the balance from the customers account when this scenario applies. The only thing I can think of is posting this as a credit to bad debts, but this does not seem right to me.
Hi there, I would be inclined to do a BR to sales for the extra as it is essentially an extra amount of money they have paid you. i.e pay off the customer account in full which would go down to zero and then bank receipt the 1.80 into sales code. Or you could do BR to suspense and ask the accountant at the end of the year what to do with it, but make sure that you document the reasons why you have done it. As I would not class it as a bad debot as they have overpaid!! I would be interested in other posts to see what other bookkeepers do. Thanks
You could raise another invoice for the customer for the £1.80. Then match the bank receipt off to the invoice. This will clear the customer account, correctly allocate any VAT if applicable and include the overpayment as income.
write it off?? im sure whatever package is used there is a wizard to write off small over payments. I know there is on sage and you can select the amount limited to write off ie anything under£5 and it will list and allow you to select the relevant customer account to clear.
Sage will then write off and do all the postings for you.
