Well, this question has been asked quite a few times by new users of Sage. Are you one of them? Have you just discovered an issue of customer overpayment? Are you not sure how to record and refundit in Sage? Don’t worry! Recording and refunding of overpayments is fairly simple in Sage. Just go through this blog. Here, we would provide a systematic approach to record and refund customer overpayment in Sage.
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Steps to Record and Refund Customer Overpayment in Sage
Please follow the below-mentioned steps-
Total Time: 35 minutes
Record the Overpaid Receipt
🔷 Click on the Receipts window to open it
🔷 Select on the Receipt tab
🔷 if Enter Deposits has not been checked, select it in order to enable the Deposit Amount field
🔷 choose the correct Customer ID
🔷 go to the Amount Received column and enter the amount due to be paid against the invoice(s)
Please Note: The Amount Received cannot be more than the invoice total
Now enter the amount of overpayment into the Deposit Amount field. This amount will get recorded into the Prepaid Sales or Deposit account.
Click on Process
Record the Refund against the Overpayment
🔷 Navigate to the Receipts window
🔷 Create a second receipt.
🔷 Now, choose the customer ID
🔷 Click on the Paid By Cheque tab
🔷 click on the Deposit To drop-down list and select the appropriate bank account
🔷 You will see the credit line marked in red. Here, fill in the Amount Received as a positive number. You will see the total will appear in negative
🔷 Click on Process
🔷 Now click Yes to proceed
Print the Refund Check
Please Note- proceed with this step only when you are printing a check from the software. You may ignore this step if checks are written by hand.
🔷 Navigate to the Payments window
🔷 Click on the Make Other Payment tab
🔷 choose By Cheque
🔷 click on the From drop-down list and select the appropriate bank account
🔷 Enter the correct Cheque No.
🔷 In To the Order of box, fill in the customer’s name
🔷 press TAB
🔷 click on Continue
🔷 now, choose an account
🔷 fill in the refund Amount
🔷 Please enter the Invoice/Ref.
🔷 add a Comment, if needed
🔷 Print the check. please make sure not to select POST
🔷 After the check gets printed, close the window to discard this transaction
It is quite important to keep a proper record of payments/overpayments in Sage. This way, you can keep your account well-documented and balanced. Hope this blog would help you learn how to record and refund customer overpayment in Sage. Hope it would facilitate better handling of your accounts. If you are still facing any difficulties in carrying out the above-mentioned steps, you may speak to some authorized Sage experts, anytime you want.
👉 Frequently Asked Questions
Can I Apply the Overpayment to other Outstanding Invoices of the Customer?
Yes. The overpayment can also be applied to other outstanding invoices for the concerned customer, if you do not want to refund. To do so, enter the overpayment amount into the Amount Received column for the particular invoice(s). Next, enter the credit amount in the same column on the credit line.
What is a Journal Entry in Sage for a Refund?
When you issue a refund in Sage, you make a refund double entry. This means, you need to adjust two separate accounts in your records. Firstly, record a debit to the “sales returns and allowances” account in a journal entry for the refund or allowance amount. A debit would increase this account.
How to Record an Overpayment to a Supplier in Sage?
You will need to post a supplier overpayment. To do this, go to Suppliers and then to Supplier payment. Now, fill in the Bank account Ref, the Payee, the Date and type in the overpayment value. Click Save. Next, you will receive a message asking if you would like to post this as an unallocated payment on account. Click Yes to proceed.