[AR] Refund a Customer that Overpaid an Invoice

The steps in this article are for when a customer has overpaid an invoice in error. These are different from the steps to correct an overbilling and refunding the customer.

There are 3 options on handling the overpayment:

Option 1) Use AR Cash Receipts to move the credit balance to a GL account and an AP Transaction Entry to create an invoice against the same GL to use to issue a refund check.
Option 2) Put the overage amount to 'On Account' in AR Cash Receipts to be used on a future invoice.
Option 3) If you want to enter the true check amount, but not put to 'On Account' or refund the customer, enter a dummy invoice for the overage, e.g. 03, and then enter the true check amount in AR Cash Receipts and apply to the true invoice and the dummy invoice. Or enter the true check amount, put the overage to 'On Account', then enter a dummy invoice for .03 and use the 'On Account' of .03 to pay it.

Option 1) Use AR Cash Receipts to move the credit balance to a GL account (e.g. Suspense GL) and an enter an AP Transaction Entry to create an invoice against the same GL, and then issue a check from AP.

1. Go to AR > Programs > AR Cash Receipts
   1. Create a new batch in an open month or the desired month.
   2. Tab off the Seq 'NEW' field and enter the Customer number.
   3. Fill in the other information, e.g. Transaction Date, Check #, Check Date and Deposit #.
   4. In the Check Amount field enter the check amount minus the amount you will be putting to Miscellaneous Receipts to be used for an AP check to refund the customer. E.g. If they paid 10,000.00 and want a refund of 4,500.00, enter 5,500.00 in the Check Amount field.
   5. When the header is complete, click the blue chevron and the Initialize Invoice screen should pop open.
   6. Either select "Oldest Invoices" and let it apply to the invoices or select "Don't Initialize" so you can enter 'Total Applied' amounts to the invoices you do wish to pay.
2. When done, click on the Miscellaneous Receipts button on the bottom of the AR Cash Receipts form.
   1. In the Check field, enter the amount of the Miscellaneous Receipt and enter the Check # and Deposit # again, e.g. 4,500.00
   2. Click the Chevron
   3. In the Line area, enter, e.g. 4,500.00 in the Amount field
   4. Select a suspense or clearing account (e.g. 99999) in the GL Account field - this will be used to issue the check on the AP side
   5. Save
   6. File > Process Batch and Validate
   7. Post the batch 
3. Go to AP > Programs > AP Vendor Master to see if this customer is already set up as a Vendor. If not, set them up as a vendor.
4. Use AP > Programs > AP Transaction Entry to create an AP Invoice for this Customer using the same clearing or suspense GL Account from the AR Cash Receipt above. Change the Type to ‘Exp’ if set to ‘Job’ and fill out the rest of the form, using a positive invoice amount.
5. File > Process Batch (AP invoice batch), Validate, Preview Reports and Post.
6. Use your normal AP Payment Process to issue a check for the refund to the customer (vendor).

Option 2) Put the overage amount to 'On Account' in AR Cash Receipts to be used on a future invoice.