42.5 Using over payments

Currently, it is not recommended to use the over payment functionality.

If over payments are used, the ”stored” amounts for later use are not tracked in the normal places. Once over payments have been applied to AR/AP transactions they will be visible, and the totals will show up in balance sheets under the correct asset/liability, but running AR/AP reports for individual vendors/customers will not flag that there are over payments outstanding. The only place to find them is in the specific ”Use [AR] Over payments” screen.

To work around the current limitations use transactions and debit/credit notes as follows.

For AR:

  1. 1.

    Create an AR transaction for the overpaid amount

  2. 2.

    Create a credit note for the same overpaid amount

  3. 3.

    Receive the extra payment with the AR transaction, and the credit note shows up on the payment screen where you can apply it to another invoice

For AP:

  1. 1.

    Create an AP transaction for the overpaid amount

  2. 2.

    Create a debit note for the same overpaid amount

  3. 3.

    Receive the extra payment with the AP transaction, and the debit note shows up on the receipt screen where you can apply it to another invoice

Note that this approach triggers two movements on the tax account, in case taxes apply to the customer or vendor. One movement to charge taxes and one to nullify the previous charge. Additionally one should be careful about invoice numbering when applying this procedure: the two transactions are synthetic (not real invoices) and should probably have invoice numbers outside of the regular numbering range (e.g. with a specific prefix or suffix such as ’OVP-’) to prevent the need to report on these invoices to the tax authorities – especially if your jurisdiction requires gapless invoice numbering.