Handling Customer & Supplier Over-Payments

(Creating credit or putting money 'on account')

Article ID: 2024667          Last updated: 26 November 2015


Where you have received an over payment from a customer and need to reflect this in AccountEdge as a credit or 'money on account', whereby the credit / over payment will remain on the customer's record until it is used at a later point.

Note!  This support note is equally applicable to overpayments and 'on account' overpayments and credits to Suppliers; simply use the PurchasesPay Suppliers windows instead of Receive Payments in the examples below.


Recording Over Payments

Assume that your customer XYZ Limited has open invoices to the value of £360. A payment is received from the customer with the value of £500.  How can we record the £140 overpayment?

From the Sales menu, select Receive Payments.

  1. Enter the total amount received in the amount received field i.e. £500.00 in our example. This is the amount that will arrive in the bank.
  2. In the amount applied column, enter the amounts you wish to apply against each invoice.  By default, AccountEdge will apply as much of the received money as it can against each invoice - but it will not over-apply any amounts.
  3. Now simply add any remaining amount you wish to over apply, against one of the invoices.  The idea is that you want to force the overpayment amount against one of the invoices.

In the example below we have over-applied the extra £140 by applying £380 against the outstanding £240 balance of second invoice:



When you record the transaction, you will receive the following message:


Click OK to record the transaction.


What if there are no outstanding invoices to over allocate the payment against?

If the customer/supplier only has previously closed (fully paid) invoices on file, use the steps described above to make the overpayment against any one of their closed sales. To do this, simply tick the 'Include Closed Sales' checkbox in the payment window to display closed sales.

Althernatively, if the customer has no previous sales/purchases, or you do not wish to apply against a previously closed sale/purchase, use Enter Sales to record a zero value invoice on the date of the overpayment.  Next, use the steps described above to make the overpayment against the zero sale.  Again, simply tick the 'Include Closed Sales' checkbox in order for zero value sale to appear.


'Using-up' or 'Settling' overpayments / credits / money on account

Between you and your customer/supplier, once you have decided what will be done with the overpayment, you'll use the Sales Register (or Purchase Register)> Returns & Credits window to 'settle' the overpayment credit.

The overpayment can be dealt with in one of two ways:

• Pay/Receive Refund:  If you feel that you will have no future trading with this debtor, or you simply want to pay/receive a refund then select the Pay Refund button. A payment will be produced for the customer/supplier for the credit amount; £140.00 in our example.

• Apply to Sale/Purchase:  You may decide to leave the overpayment 'on account' until a future invoice is received and recorded. The credit can then be applied to the invoice and reduce the invoice(s) balance. You can do this by selecting the Apply to Sale/Purchase button.




Disclaimer: This information is of a generic nature. For specific advice regarding your particular circumstances please seek assistance from your accountant or HMRC as appropriate.