You may be faced with a situation where a customer requests you transfer a credit to another customer who you and they both trade with. This page provides information on setting up your company file for this to allow the transferring of credits.
Transferring credits is done by using a clearing account. The clearing account is used to record a refund for the first customer. Then, using the clearing account, a Receive Payments transaction is recorded for the second customer. The first transaction will post a withdrawal to the clearing account and the second will offset it with a deposit.
Setting up a company file to transfer credits between customers
All that's needed to set up your company file is a new clearing account.
- Go to the Accounts command centre and click Accounts List.
- Click the Asset tab then click New.
- Select Bank in the Account Type drop-down menu.
- Give the account a unique number that suits your account list.
- Name the account Credit Note Clearing.
- Click OK.
The window below shows the setup of an example Credit Note Clearing account.
Transferring a credit between two customers
There are two tasks required to transfer a credit between two customers: recording a refund for customer #1 and transferring the credit to customer #2.
The following assumes a credit note has already been issued for the first customer:
- Go to the Sales command centre and click Sales Register.
- Click the Returns and Credits tab and highlight the credit note.
- Click Pay Refund.
- Select the Pay From Account option and enter the Credit Note Clearing account (as created earlier in this support note) in the adjacent Account field.
- Check the refund payment details then click Record.
The following window shows an example refund for $90 being paid from the Credit Note Clearing account. This will post a withdrawal to the Credit Note Clearing account.
- Go to the Sales command centre and click Enter Sales.
- Select the second Customer's Card.
- Click Layout and choose Service then click OK.
- Enter the Date and Memo.
- Enter the Credit Note Clearing account (the one created earlier in this support note) in the Acct# field. A warning may be displayed about the type of account you have selected. Disregard this warning.
- Enter the Amount as a negative, for example -$90.
- Select the relevant Tax/GST Code.
- Check the transaction then click Record.
The window below shows a credit note for the second customer.
This transaction will:
- post a deposit to the Credit Note Clearing account, offsetting the refund withdrawal. The Credit Note Clearing account should now have a zero balance, and
- create a credit note for the second customer that can be settled through the Sales Register.