I billed a customer an Invoice which has been posted and paid. Just recently we discovered an error in his bill that gives him a credit of 130. I do not want this to show as a negative balance in my customer aged, I want to write a check through Simply to pay him the amount he was over charged. Can this be done? My thinking is that somehow I have to link my customer module with my payment module, add him as a vendor and just select "Make other payment", but that will still leave a balance in my customer aged. Any help would be great. 

Hi there:  I am going to assume from what you said that you invoiced your customer for a certain amount and the customer paid the full amount.  That means that this customer does not have a balance showing in your customer aged, correct?

In order to pay the customer for the amount to be refunded without putting it through the A/R module you will have to do just as you said -- set up the customer name in the Vendor section so that you are able to do a cheque in the "make other payment" option.   The entry will be a credit to Bank and a debit to Sales and whatever taxes you had charged (probably a debit to GST Charged on Sales?)  That way you pay the customer for the overcharge on his invoice and reduce your Sales and GST Charged on Sales by the amount of the overcharge.  That should work for you.    Rita Deering

Well as it sits right now, the customer has a negative balance (-130.) in my customer aged. I want to pay him this by cheque but not a manual cheque. I want to pay through Simply. I need to write the check as "make other payment", AND clear out this negative balance in my receivables. Can this be done or am I making this more difficult than necessary? I liked your idea about the cash clearing account that can be accessed through both payables and receivables. can you give me more information?

I would backup your books before you attempt this so if anything goes wrong you can go back.

Go ahead and cut the cheque.  I prefer Purchase with Paid by cheque but it should work with Make Other Payment.  You do not need to add the customer as a vendor so select Continue when prompted after entering the customer name, then enter the proper address.

Print the cheque but do not post it, discard the entry.

Go to Receipts and post an entry to receive the money under the appropriate customer name but use the cheque number as the Source.  The journal entry should debit A/R and credit the bank for the amount of the cheque.  Post this one and you will have your data entry, taking money out of the bank and the cheque you can send to the customer.

Hi again:  This is exactly the kind of thing that I would use the Cash Clearing account for.  I misunderstood about the balance being in negative already.  I didn't think that the credit had been entered.  Now that it has, you could go to the Sales invoice window and do an "invoice" to the customer to Debit Accounts Receivable and choose the Cash Clearing account as the Credit side of the entry.   This will clear the minus amount from the customer aged for this customer. (Of course the sales "invoice" is just to make the entry, not to send to the customer.)

Then, go to the Make Other Payment option and you will have an entry that Credits the Bank (for the cheque) and choose to Debit  the Cash Clearing account for your entry.    All taken care of.     This assumes that you have set up the Cash Clearing account in your Chart of Accounts as described in a previous post and that you have chosen "Bank" as the Class option.  This will allow you to choose this account any time you need it as a choice instead of Bank.     Rita Deering

Hi Rta, I am still confused. I don't understand how I am to link my payables and receivables using the cash clearing account. Am I doing this through my wizard? This makes so much sense but I can't get it to balance on paper.

Hi again:  You can't "link" your payables to your receivables.   All you are doing by using the Cash Clearing account is to have a place to put the other side of the entry when you do the "invoice" in the Sales window to debit the accounts receivable and clear the -130.00 amount.  You need to have a place to put the credit.   

Then when you go to the Make Other Payment window to pay the customer the 130.00, you have a place to put the other side of the entry that needs to be made in order to print the cheque.  You will have a credit to Bank for the cheque and you can put the debit to the Cash Clearing account.  There is no "linking" going on at all.  You do have to make sure that the Customer has been set up in the list of Vendors also so that you are able to "pick" that customer to make the cheque to. 

If you haven't done so already, go to your Chart of Accounts, select New Account and set up a Cash Clearing account right under your Bank account in your Current Assets.  In the Class option, choose Bank.     Give the entry another try as I have described to do it.  Double check each journal entry by going up to Report (or Control +J) and make sure it is doing what you want it to do before posting.   Rita

Do I need to enter my banking information (transit #, account #) when I set up the cash clearing account? Or is it just a dummy account to move transactions around, so to speak? Tks