Need more help?

HTML Wrap

class	section group

If a finance charge was taken as part of the payment:

Check your Linked Account:

Image Removed

Note the account being used for the Income Account for Late Charges. This account will be needed for creating the credit note.

Create a new Credit Note

A deposit is a payment for goods or services not yet delivered. This means if you receive a payment against a sales order, it's considered a deposit.

HTML Wrap

class	col span_3_of_5

ANSWER ID:9110

Invoices may have been created from an order, if a payment is made against that order, it is considered to be a deposit. This page describes how to refund these deposits when the sale is cancelled or has been incorrectly created.

Want to see how to reverse a customer deposit?

Image Removed

Watch our demonstration video.

How are deposits recorded and why do they prevent the deletion of invoices?

Payments applied to orders are automatically recorded as deposits. Although these deposits are individual transactions, they are associated with the final invoices that are created from the original order. This association prevents the invoices and the deposit payments from being deleted.

How do I know if an invoice has had a deposit applied?

When trying to delete or reverse an invoice that is associated with a deposit, an alert is displayed as shown below.

Image Removed

Attempting to delete or reverse the deposit payment will result in the alert below.

Image Removed

To reverse customer deposits

There are several tasks involved in canceling these invoices. A credit note or reversal needs to be created, and the credit note is used to pay the deposit back to the customer and, if necessary, used to close the original invoice.

UI Expand

title	1. Set the security preference

The ability to reverse or delete transactions is determined by a security preference within your software.

Go to the Setup menu and choose Preferences.
Click the Security tab and select the option Transactions Can't be Changed; They Must be Reversed [System-wide].
Image Removed

UI Expand

title	2. Find the invoice

Go to the Sales command centre and click Find Transactions.
Click the Search by field drop down arrow and select Invoice No., then click on the adjacent field's drop down arrow and select the invoice to which the deposit has been applied. The example Find Transactions window below shows an invoice and its associated deposit.
Image Removed

UI Text Box

type	note

The first line represents the invoice ( ID# 00000019)
The second line represents the deposit (ID# CR000039)
The third and fourth lines represent the conversion of the order to an invoice (ID# SJ000006)
There may be additional lines if more than one payment or finance charges have been applied to this sale

UI Expand

title	3. Determine if there was a finance charge applied

Open the payment (or payments) on the invoice. In our example shown below, the payment is on line 2.

Image Removed

Is there a finance charge?

If a finance charge is listed on the invoice, take note of the amount. This will need to be credited back from the finance charge account.

Image Removed

UI Expand

title	4. Reverse the invoice

On the Find Transaction window shown above, click the zoom arrow next to the invoice. The invoice will be displayed.
Go to the Edit menu and choose Reverse.
Check the reversal transaction details then click Record Reversal.
When checking the Date: If you're running on an Accrual Basis, ensure the Date is set in the correct reporting period.

UI Text Box

type	note

If there is no finance charge, skip to Step 6.

UI Expand

title	5. Reversing finance charges (if applicable)

UI Text Box

type	note

Just started using a new company file?

If you've taken customer deposits for orders yet to be fulfilled, you'll need to enter these pre-conversion deposits.

How AccountRight treats customer deposits

Because no goods or services have changed hands, AccountRight treats deposits differently to other payments. A customer deposit is typically posted to a liability account because it's not yet considered business income. When the sales order is converted to an invoice, the deposit is transferred from the liability account to your trade debtors account.

To set up AccountRight to track customer deposits, or to check the liability account used for deposits, go to Setup > Linked Accounts > Sales Accounts.

Sales Linked Accounts window with deposits collected account highlighted Image Added

Recording a customer deposit

If the deposit is paid	do this
when the order is created	enter the deposit amount in the Paid Today field on the order Image Added
after the order is created	use Receive Payments to apply the deposit to the order Image Added

You can give the customer a copy of the order as a record of the deposit (open the order and click Send to then choose Email or Disk).

Deleting or reversing a deposit

How you delete the deposit depends on the sales order.

If the sales order hasn't be converted to an invoice

You can simply reverse or delete the deposit as follows:

Open the order (Sales > Sales Register > Order tab > click the zoom arrow to open the order).
Click History to display the payment transaction.
Click the zoom arrow to open the payment transaction.
Go to the Edit menu and chose Delete Payment (or Reverse Payment).

If the sales order has been converted to an invoice

You can't simply reverse or delete the deposit; the invoice will first need to be reversed. This also provides an audit trail of the transaction and allows the deposit to be refunded.

Let's step you through how to do this. The scenario we'll use is where an order has been created and a deposit applied, then the order is converted to an invoice but is subsequently cancelled.

If you need to reverse the deposit because the wrong amount has been applied, after completing the steps below you'll need to recreate the order and apply the correct deposit amount.

UI Expand

title	1. Reverse the invoice

Reversing the invoice will create a credit note for the total amount of the original order. To allow transactions to be reversed, you need to set a preference in your software. Then you can reverse the invoice.

To set the preference

Go to the Setup menu and choose Preferences.
Click the Security tab.
Select the option Transactions CAN'T be Changed; They Must be Reversed.
Image Added
Click OK.

To reverse the invoice

Open the invoice you want to reverse.
Go to the Edit menu and choose Reverse Sale. A new transaction containing corresponding negative amounts to that of the original transaction appears.
If you want, alter the date and memo.
UI Text Box
type note
If you're running on an accrual basis, ensure the date is set in the correct reporting period.
Click Record Reversal. A credit note will be created for the value of the reversed invoice.

If the finance charge was an overpayment of the customer's account, please see our support note Handling overpayments in AccountRight v19 and AccountEdge which explains how to record account overpayments correctly. Also see our support notes Finding and deleting or reversing a finance charge.

to select the credit note created above, then click Apply to Sale. A list of open invoices appears.
Click to select the customer's original invoice. This invoice will have an outstanding balance of the original order amount minus the deposit.
Change the Credit Amount field to match the amount left owing on the invoice.
Click the Amount Applied column for the invoice. This will change the value to match the Credit Amount field.
Click Record. This settles the original invoice and leaves a credit balance equal to the value of the deposit.
Click to select the credit note again, then click Pay Refund.
Select the account from which you want to pay the deposit refund.
Click Record. This refunds the deposit component of the transaction, and settles the remaining credit.

UI Expand

title	2a. Settle the credit (if refunding the deposit)

You can use the credit note created in the previous task to:

settle the outstanding balance of the original invoice (minus the deposit amount), and
refund the deposit.

Here's how:

Go to the Sales command centre and click Enter Sales Register.
Select the applicable customer
Click the Returns and Credits tab.
Click Layout and select the Service invoice type.
Enter or select the allocation account - this will be the linked account for finance charges as noted earlier.
Enter the amount of the finance charge as a negative amount.
Select the N-T tax code and record the sale. See our example below.
When setting the date: If you're running on an Accrual Basis, ensure the Date is set in the correct reporting period.
Image Removed
This credit note will be refunded in Step 7.

UI Text Box

type	note

UI Expand

title	6. Create an invoice for the deposit (if non-refundable2b. Settle the credit (if not refunding the deposit)

If a the deposit paid on a sale is non-refundable, complete the following:

Go to the Sales command centre and click Enter Sales.
Create and record a new invoice for the deposit amount. This invoice will be paid for and closed when processing the credit notes/refunds.
When checking the Date: If you're running on an Accrual Basis, ensure the Date is set in the correct reporting period.

UI Expand

title	7. Process refunds

After the credit notes and any additional Invoices have been created, we need to close the sale (if it's still open) and refund the credit notes.

When paying the refunds in the steps below: If you're running on a Cash Basis, ensure the Date is set in the correct reporting period.

you need to:

create an invoice for the deposit amount (to account for the receipt of this money into business income), then
apply the credit note to:
- close the deposit invoice, and
- settle the outstanding balance of the original invoice (minus the deposit amount)

Here's how:

Create an invoice for the deposit amount

When recording the invoice, use the following details:

Use the Service layout.
Select the same customer as the original invoice.
Enter a Description which describes the transaction, such as Non-refundable deposit for order XXXX
If you're running on an accrual basis, make sure the Date is in the correct reporting period.
Enter the deposit amount.

Apply the credit note

Go to the Sales command centre , and click Sales Register then click .
Click the Returns and Credits tab.
[If
the deposit is non-refundable] Apply the credit note to the new sale created for just Click to select the credit note for the reversed invoice, then click Apply to Sale.
Click to select the invoice you created for the deposit amount. This will close the new deposit sale and make it part of the business income.
[If there are Finance Charges to be refunded] Highlight the credit note for the Finance Charge and click Pay Refund to close this part of the transaction.
[If the invoice is fully paid] Highlight the reversed invoice then click Pay Refund. This is because the money needs to be taken back out of the bank account to which it was deposited. Make sure the account selected in the following window is the correct bank account to refund the deposit from.
[If the invoice is partially paid] Highlight the reversed invoice
Change the Credit Amount field to match the deposit value.
Click the Amount Applied column for deposit invoice. This will change the value to match the Credit Amount field.
Click Record. This settles the deposit component of the transaction which is now considered business income.
Click to select the credit note again, then click Apply to Sale.
Change the Credit Amount to be just the amount left owing on the invoiceClick to select the customer's original invoice. This invoice will have an outstanding balance of the original order amount minus the deposit.
Click in the Amount Applied column on for the same line where the original invoice appears with the outstanding amount. The value will change to match the remaining balance of the credit note.
Click Record.
Highlight the invoice again in the Returns & Credits tab (which will show a credit Amount equal to the deposit amount) and click Pay Refund.
Make sure the Account selected in the top left of the window is the correct bank account from which to refund the deposit amount.
Click Record. This procedure will reverse both the sale and the deposit made against itThe remaining credit is applied and the original invoice is closed.

HTML
<h2><i class="fa fa-comments"></i>  FAQs</h2><br>

UI Expand

title	What if the order was paid in full and then cancelled?

If the order was paid in full, you can treat the payment the same as a deposit. You can then follow the steps above to:

Convert the order into an invoice.
Reverse the invoice to create a credit.
Settle the credit (based on whether or not the payment is refundable).

UI Expand

title	8. Making sure everything is closed correctly

To verify that all steps have been completed correctly, the best place to look is in the Customer Sales Summary report. In this report, we want to see the original transaction (ID# 00000019) and its reversal (ID# 00000064) and the status of both is "Closed". Additional reversals may be shown if you had finance charges or non-refundable deposits. These are all OK as long as their status is "Closed".

My Customer	ID#ID#I	Orig Date	Sale Amount	Tax	Current Balance	Status	Due Date
	00000019	25/11/2013	$500.00	$0.00	$0.00	Closed
	00000064	30/11/2013	-$500.00	$0.00	$0.00	Closed

Why can't I find the deposit transaction, or it shows as a different amount to what I actually received?

If you recorded the deposit using Receive Payments, it's possible a value was entered as a finance charge. For help finding, deleting or reversing finance charges, see Finding and deleting or reversing a finance charge.

UI Expand

title	How do I receive money in advance from a customer who has no sales history?

To receive money in advance from a customer with no sales history:

Create a sales order for the customer.
1. Use the Service layout.
2. Enter the Date the prepayment was made.
3. Specify the details of the order at line level.
4. Enter the amount received in the Paid Today field.
5. Record the order.
Change the order to an invoice.

Open the Sales Register.
Click the Orders tab.
Select the order and click Change to Invoice.
Check the details of the invoice and click Record.

HTML Wrap

width	15%
class	col span_1_of_5

HTML Wrap

float	left
class	col span_1_of_5

Panelbox

name	green
title	Related topics

HTML Wrap

class	sidebarlinks

Entering pre-conversion deposits

Deleting transactions in AccountRight v19 and AccountEdgeSupplier deposits

Handling overpayments in AccountRight v19 and AccountEdge

Finding and deleting or reversing a finance charge

Child pages

Versions Compared

Old Version 5

New Version Current

Key

ANSWER ID:9110

Want to see how to reverse a customer deposit?

How are deposits recorded and why do they prevent the deletion of invoices?

How do I know if an invoice has had a deposit applied?

To reverse customer deposits

Is there a finance charge?

How AccountRight treats customer deposits

Recording a customer deposit

Deleting or reversing a deposit

Need more help?

Learn about AccountRight v19

Community Forum

Videos