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Client Over or Under Pays

For example, you have an invoice for £500 but have received a cheque for £501 from the client. Your choices are to...

  1. Take the £1 as if it were part of your commission (not strictly ethical, but possibly the simplest action for small discrepancies)
  2. Retain the £1 on behalf of the client for future business (not ideal for small sums, as they'll make your accounts messy)
  3. Refund the £1 (hardly worth the effort for small discrepancies, but the honest action for larger ones)

Or you have an invoice for £500 but have received a cheque for £499 from the client. Your choices are to...

  1. Accept the £1 reduction in your commission (possibly the simplest action for small discrepancies)
  2. Retain the £1 deficit (not ideal for small sums, as they'll make your accounts messy)

1. Take the Extra or Accept the Reduction

When reconciling the sum in the Cashbook, as shown below...

  • Change the amount to reconcile (e.g. from £500 to £501)
  • Select the option to "Adjust figure in ledgers..."
  • Click "OK"
  • In the following pop-up ensure you double-click the Commission line, then click "OK".
  • In the following pop-up, shown below, ensure you double-click the Commission line, then click "OK".
  • NOTE that you should not adjust the Fees, as these will have been pre-agreed with the client. Similarly you should not adjust the Premium, which will have been set by the insurer.
  • 2. Retain the Extra £1 or Debt of £1

    When reconciling the sum in the Cashbook...

  • Use the default option to "Reconcile amount shown immediately" (see above)
  • If you've received £1 extra then reconcile the invoice amount and leave the £1 to be reconciled later against other business
  • If you've received £1 too little then reconcile what you've received and leave the £1 debt to be settled subsequently
  • Click "OK"
  • 3. Refund the Extra £1

    Realistically you would not bother with this process for £1, but if the client has over-paid by £100 you definitely would need to refund it.

    Before showing you how to process the refund, you’ll save a lot of time and trouble if you do the following set-up, starting from your Durell Main Menu....

  • Click the “Accounts” button
  • Click the red “Setup” button
  • Click the “Nominal accounts” tab
  • Ensure the drop-down at the right says “Sales”
  • Click the “Starburst” or new button
  • Create a new nominal account called “Refunds” with the code “REFU”, as shown below
  • Click the red “Floppy Disk” or save button to save your new nominal account
  • Now click the “Invoice / text desc” tab
  • Ensure the dropdown is set to “Sales invoice descriptions”
  • Click the “Starburst” or new button
  • Create a invoice description called “Refund”, as shown below
  • Click the red “Floppy Disk” or save button
  • Reset the dropdown to “Sales text descriptions”
  • Click the “Starburst” or new button
  • Create a text description called “REFUND” in upper case
  • Click the red “Floppy Disk” or save button
  • Repeatedly click the “Exit Door” icon to exit and return to your Main Menu – you are now ready to proceed
  • Now go to your Sales Ledger, click the "Starburst" button and create an new invoice to the client for the extra sum, say £100, using the "Refunds" nominal account and texts, described above.

    Having saved this invoice to the client, repeat the exercise exactly EXCEPT in the "Type" dropdown select "Credit", as shown below, noting that...

      a) an invoice for the client to reconcile the extra money against

      b) a credit against which you can write a cheque to refund the client

      c) both of which you should now reconcile in the Cashbook, as normal.