Refund of overpayment to a supplier

We overpaid a purchase invoice; we have posted the payment against the invoice and the customer’s account shows a prepayment. They have repaid this into our bank account. We can’t tag it against an invoice or it will impact the sales and VAT. If we go the payment and click on refund it will create an additional entry on the bank statement.
An alternative is to put the refund to a ‘sundry’ account and then posting the payment to that account using ‘something else’ tag, is this the only way? Some advice please!

Hi @noelhalsey

This would be the correct way to do it, and then simply delete the existing untagged entry so it’s no longer duplicated.

Hope that helps!

Thanks Matthew. Not keen to alter the bank feeds as if refreshed it will bring the other one back. The petty cash option will stop that happening.

Kind regards

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