Over payment to a creditor, How do I journal a credit to their account?

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  • Updated 4 years ago
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A payment has been made to creditor that exceeds the amount actually owed to them. Because this has come out of the business bank account an over payment has been made. 

I need to create a journal entry to reflect this amount that will in effect be like an internal credit note on the creditors account which I will be able to use to apply to future invoices until that 'credit' amount has been used. 

Does anyone know how to create this type of journal in Reckon Accounts Pro 2014. 
I have found the 'General Journal' under 'Company' but this requires a debit and credit amount in order to save the entry. 

I could create a credit note and make up my own number and enter this the same way as if I had an actual credit note from a Creditor, however I would much rather create the correct journal to reflect this information correctly. 

Thank you for your assistance. 
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Posted 4 years ago

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Renee

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When you go to Pay Bills can you just enter the overpayment amount and this will automatically leave in a credit amount on there account to be allocated when the next invoice comes in?

The amounts were paid at separate times. So the over payment should never have been made as it is a standalone transaction which is why it needs to be journaled. 

Thank you for your suggestion Renee. I didn't make this mistake. Generally I would never make a bank payment without putting it through Reckon first :)
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Shannon Sciuto

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Hi Graham, 

You'll need to have something to load the double payment against in the pay bills function (just temporarily). 

1. Open the correct bill payment.  Deselect the invoice that the payment applies to and hit save. 

2. Use the pay bills function to process the second payment made in error and mark the payment against the bill you have just unapplied. Save

3. Open the bill payment you have just created. Deselect the invoice that the payment applies to and hit save. 

4.  Open the correct original payment and apply the payment, once again, to the bill. 

As new bills are received, you can apply the incorrect payment to those bills by opening the bill payment and selecting those bills once they're entered. 


This is how I would do it - unless anyone else has another idea? 

Cheers, 

Shannon
Cinch Administration
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Kevin Silberberg, Accredited Partner

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Graham, the over payment can be dealt with by a journal as you prefer in the following way:

Credit Bank Account the amount of the over payment
Debit Accounts Payable the amount of the over payment Select the Supplier from the drop down list.  Save.
Thank you all. I have solved it. I was on the right track but not having a lot of experience at this system I was unsure how to use the function. 

1. Go to 'Company' on the task bar - > 'General Journal Entries'
2. Set your date if it is not today. (I back dated mine to the day of the incorrect payment). 
3. The journal should automatically allocate a GJ number or reference.
4. Select your bank account or what ever account the money has come out of.
5. enter the amount in the 'Credit' field. Because it has come out of the account this is a 'Credit'.
6. Write a memo or note about why you are making the entry so that you have a reason for later reference. 
7. Tab to the next line, You are creating a credit on your Trade Creditors/ Accounts Payable account.
8. In the 'Debit' Field enter the same amount as this is what has come out of the account.
9. Write a memo - I kept this the same again this is the reason you are making this journal for later reference
10. In the 'Name' field use the drop down to select the account you wish for the amount to be credited to (In my case this was a creditor account)
11. Save and Close.

If you go to the creditor account you will not see this journal entry listed but if you have a look at the total outstanding it should be reduced by the amount you entered. In my case I see a credit. 

Go to the Pay Bills screen and select the Creditor account, click on an invoice and click on 'Set Credits' and your journaled credit will be there to be used to allocate to your invoices. 

A simple way to think of this is that if money is leaving your bank account it is a 'Credit' which means that you are 'Debiting' the Accounts payable account.

If you get the Debit and Credit fields mixed around the wrong way you will see your account balance go up by that amount. Go to the Pay Bills screen and you will see this journal entry as if it were an invoice. Tick this and click on the 'Go to Invoice' button at the bottom. This will bring you back to the journal entry and just change your amounts round. So if you had it in the debit field delete and put the amount in the credit field on that line instead and same on the next line. Then go back to your Pay Bills and you will have a credit instead of a journal invoice. 

You can use this same solution to enter a journaled invoice as well just by putting the amounts in the opposite debit or credit field. 

Once you know how to do this it takes just a few seconds and you can do more than one entry in a single journal as well so you don't have to start a new journal for each transaction as long as they are all on the same date. 

Thanks everyone for your input and I hope this helps someone else. 

Cheers 
Jayne
(Edited)