Writing Off Customer Overpayments

We can make journal entries to write off small amounts related to customer overpayments.

Note: We may prefer to apply a customer overpayment against an outstanding invoice.

To write off small amounts from customer overpayment:

1. Go to Transactions > Financial > Make Journal Entries.
2. In the Primary Information section:
   1. In the Entry No. field, accept the default, or enter a different number. If journal entries are assigned autogenerated numbers in our account, we cannot change the defaults unless the Allow Override box is checked for Journal. Go to Setup > Company > Auto-Generated Numbers > Document Numbers subtab. 
   2. If we use NetSuite OneWorld, select a subsidiary to associate with this journal entry. The journal posts to this subsidiary and only entities associated with the subsidiary can view the entry.
   3. If the Multiple Currencies feature is enabled, review the value in the Currency and Exchange Rate fields and edit as necessary. If we use NetSuite OneWorld, by default the Currency field displays the base currency of the subsidiary selected in the Subsidiary field.
   4. If we have journal approval permission, check the Approved box to approve your journal entry. If we do not check this box, this entry does not post until it is approved.
   5. Important: The Approved box displays only if the Require Approvals on Journal Entries accounting preference is enabled at Setup > Accounting > Accounting Preferences > General subtab. The Approved box does not display if we have enabled the Journal Entries approval routing accounting preference. This preference enables us to use SuiteFlow to create a custom journal entry approval routing workflow. 
   1. Accept or enter a date in the Date field.
   2. If we use fiscal periods, we can see a Posting Period field. The posting period is determined when the journal entry is approved. When we approve a journal entry, we can select a different value than the one initially displayed. We cannot select a closed period. We may be able to select an open and locked period if our role includes the Override Period Restrictions permission.
3. On the Lines subtab:
   1. In the Account field, enter or select our Accounts Receivable account.
   2. In the Debit field, enter the amount of the overpayment from the invoice.
   3. In the Name field, select the name of the customer with whom this overpayment is associated.
   4. Enter other information on this line item as necessary.
   5. Click Add. Tip: When line details are similar, click Copy Previous and then make modifications as required.
   6. In the Account field, enter or select our Miscellaneous Income account or our preferred income account.
   7. In the Credit field, enter the amount of the overpayment from the invoice. Note that this amount must match the amount we entered on the previous line.
   8. Enter other information on this line item as necessary.
   9. Click Add.
4. Verify that the Out of Balance By Debit and Credit fields are empty. We cannot save a journal entry that is out of balance.
5. Verify that the amounts entered in the Debit and Credit fields are the exact amount of the invoice.
6. Click Save.

The final results are:

• Our accounts receivable account is increased by the overpayment amount.
• Our miscellaneous income account is increased by the same amount.

After writing off customer overpayments, we must apply a journal entry to the overpayment.

To apply the journal entry to the overpayment:

1. Go to Transactions > Customers > Accept Customer Payment.
2. In the Customer field, enter or select the customer to which the journal entry should be applied.
3. In the A/R Account field, enter or select the appropriate settlement account.
4. Complete the remaining fields as required.
5. On the Credit subtab of the Apply subtab, check the Apply box for the customer overpayment.
6. On the Invoices subtab of the Apply subtab, check the Apply box for the journal entry you created for this overpayment. Note: The Payment Amount is set to 0.00.
7. Click Save