Refund of overpayment

DebA

We paid our insurance twice in 2020. We paid in full in April 2020 (incl GST) but we also had a monthly direct debit set up for the same thing.

The insurance company refunded the initial payment in full to our bank account in Jan 2021. The payment confirmation didn't note the GST.

1. We want the refund to show in 2020 reports even though refund not received until Jan 2021. (out EOFY is December). I did a credit note (via Pay Bills) dated 31/12/2020 & credited the insurance expense code & coded it to include GST. But this entry doesn't allow you to allocate it to an actual bank account.
2. We did a 'Make Deposit' entry dated in Jan 2021 (when refund received to our account). 'Deposit' is to our bank account. For now we have credited account code 'insurance expense' for the refund. But this isn't right because it's like it's been refunded twice now. Which account code should we credit in the Deposit entry in Jan 2021?

Thanks for any help.

Deb

Kris_Williams

I would have done an invoice to ins company dated 31/12 to an item linked to insurance expense including GST. That way it will be reflected in financial year, and then a receive payment when it was banked in Jan

Acctd4

I wouldn’t be creating an invoice if this was an overpayment that was refunded.

Instead, I would suggest using the A/P account to post the deposit to (on the deposit line itself I mean, not the bank account to deposit to) This then allows you to “apply” the “Refund” against the Bill Credit in the “Pay Bills” window so that the refund deposit is recognised but also the reversal of the insurance expense - along with any tax code - is also correctly recorded.

DebA

Hi

Thank you both for your suggestions... VERY helpful! Problem solved.