Overpayment from supplier write-on

Accounting
1

Hi there,

One of my suppliers requires an account balance to pay for their services and so I always have to transfer money from bank > supplier’s account. After I top up credit, I pay invoices from that balance.

I have mirrored this in QF > created an account for this supplier. I then move the amount from bank account to this supplier acct. Then once they send me an invoice, I mark the invoice as paid from that supp account.

Now I have requested a refund of some remaining credit but they were unable to refund the exact amount and instead refunded me more (example: credit balance = £175; refund = £200). As the money arrived in the actual bank account, I have tagged the £200 transaction as transfer between accounts (supplier’s account > bank account), which resulted in negative balance in the supp account (- £25).

I’m wondering how to write this off (or actually write on) correctly?

Thanks a lot.

2

Hi @rookie

Apologies for the delay in replying.

Can I just check that you’ve created a separate bank account for the supplier rather than holding funds on their account (prepayment)?

In your example, what are they classing the additional £25 as? Is it goodwill credit for example, or have they attributed it to something else?

3

Hi @QFMathew ,

no problem at all, thanks for your reply.

  1. Yes I have created a separate bank account for the supplier in QF.

  2. I’m not exactly sure. I’d assume it would be “goodwill”.

4

Please accept my apologies as this seems to have slipped under the radar.

The best way to handle this type of scenario is to use the “prepayment” feature against a supplier rather than a separate bank account. However, there isn’t anything wrong, per se, with the way you’ve done it.

The other option is to just enter is as a negative value on a purchase invoice when the credit is redeemed.

This post may help with this: Goodwill Credit Note for Supplier - #8 by QFMathew

Hope this helps!

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