but when you print out A/R ageing summary it still shows up. Help ?
Hi Stacey Your entry would be for an overpayment Debit Accounts Receivable and the Customer along the same line under the heading Name and the Credit would be Sales Income (or whatever Sales account you use) with Tax Code GST if you charged GST in the first place.
The bank has nothing to do with this entry as the amounts will never show on your bank statement.
Once you have made the entry, go to Receive Payments, enter the Customer, highlight the line you just entered (don't tick), then click Credits (bottom right) and then Done. You will notice when back in Receive Payments there is a Credit column now. The customer should now be sorted.
At any time when you bring up the AR Trial balance and see a row of 0.00 this means you need to set the credit against an outstanding debit (invoice). This is done through receive Payments.
Using a General Journal entry
In the Account column use Accounts Receivable
In the Debit column use the amount you are trying to write off.
In the Tax column you will need to attribute tax if applicable
In the Name column use your customers account name, number or however you identify your customer.
In the Account column use either an existing account (I opened a new account called Customer Writeoffs) as a sales account - this is because the written off amount when it is an overpayment is classified as income for taxation purposes.
In the Credit column use the amount of write off so it all balances.
I do the same in reverse when I need to write off customer bad debts except I allocate to an expense column the write off as it it an expense to business.
I do hope this makes sense, Im in a bit of a hurry but thought I would try and assist.