A client recently asked if there is an easy way to convert a customer’s credit balance into a refund check. I explained that most accounting systems are not written to cross the lines between applications that normally do not interface. It is rare to find a built-in function to take an A/R credit balance and have it generate all the necessary steps in A/P such as:
1) create debit memo to reverse the balance back to zero;
2) create an A/P invoice payable to the customer;
3) assign the appropriate GL accounts so that the end result is a credit to cash and a debit to the sales account.
A very common scenario that leads a credit balance to be refunded is where the customer pays for a product and subsequently returns it for the refund. In these situations, reversing the payment must also be accounted for. As you can understand, there are multiple courses of possible action required when a refund is processed. It necessitates customization. Otherwise, accounting system users will be obligated to manually complete the various tasks (cleaning up the A/R, etc.) or end up with a general ledger full of misrepresentations.
You are looking for someone who understands your business and will help you navigate your needs. It’s your money and business on the line. Give us a call at (773)502-5771 to get you on the right track.
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