Video instructions and help with filling out and completing What Form 843 Overpayment

Instructions and Help about What Form 843 Overpayment

What a customer over pays you how do you go about reconciling this in zero there's a few methods for this the first one is we find a match on the transaction we allocate it to any outstanding invoices and then with the remaining amount we post this as an adjustment this will go into your balance sheet account and this will be represented under rounding we will however have two action this towards the end of the year but for now it reconciles the transaction now there's another very similar method but with the previous one we would have had to make an adjustment as at the year-end it's a clear our balance sheet account with this method will instead write it off straight to the profit and loss but will firstly need to make sure we have an account code within our chart of accounts this will need to be an overhead expense code and this will have no v80 and we can name it minor write-offs or minor adjustments then when we find a match to the relevant invoices with the overpayment value we create a new transaction for the difference and post it Auto profit and loss this means we need to make no adjustments as at the year-end but of course both of these will only work if the overpayment value is relatively small but what happens if your customer has overpaid you by significantly more maybe they've paid an invoice twice and don't have any outstanding balance what we instead do is we can allocate this to their account and later action it as either a refund an allocation against a future invoice or even a write-off from the bank transaction we find a match on this and we go to create a new transaction but what we instead do is we change it from being a direct posting we want to instead allocate this as an overpayment make sure to re-enter in the contact name this will pick up from the bank reference and we don't want to duplicate any contact records after this has been completed you can simply enter in a reference and a description such as payments on accounts or overpayments then we can save this transaction and it will be available on the contacts record we can then action it later on once we've resolved whatever dispute we may have had and that's really it for our methods we use the only thing we need to think about is which method we should be applying and why now what we would recommend is that the first two should only apply on very small overpayments so maybe even in the pennies or maybe even a pound however the third option should always be used when there's a significantly larger overpayment the good thing about this one is it makes it very clear for both yourself and the customer when it comes to reconciling their accounts you'll be able to see the payment showing on their contact record this will also be represented on any statements we can then allocate it to invoices refund it write it off or even offset it against a contra account depending how we're running our customers balance oh and by the way you can also apply exactly the same principle with your supplier accounts