Credit Note Alternatives

Keith Fetterman kfetterman at gmail.com
Mon Feb 27 13:16:22 EST 2012


On Mon, Feb 27, 2012 at 10:12 AM, Keith Fetterman <kfetterman at gmail.com>wrote:

> Hi Bob,
>
> Thank you for explaining.  I understand.  I discovered how to populate the
> description field in the customer report, so I can show the refunded amount
> there.  I can't wait to see the real credit note, but this will work as
> an interim solution.  Thanks for figuring out this work around.
>
> Keith
>
>
> On Sun, Feb 26, 2012 at 8:48 PM, Bob Brush <bobbrush3 at gmail.com> wrote:
>
>> On 02/26/2012 03:32 PM, Keith Fetterman wrote:
>>
>>> Hi Geert,
>>>
>>>
>>> You mention 1) receiving a payment from the Refund account and 2)
>>> transfer
>>> money between a checking account and Refund account.  Do you perform both
>>> of these steps for every customer credit note?  Or, do you do one or the
>>> other depending if you want to apply the credit to a future invoice (step
>>> 1) or refunding the money to the customer (step 2)?
>>>
>> Yes, you would do one or the other, if the customer has a balance you can
>> use the "credit" to pay the balance, it is essentially just another asset
>> that can be spent or moved, it is just helpful to coral it from the rest to
>> handle better and also to remember later on what happens, similar to
>> receiving a check payment from a customer to a "Checks to Deposit" account,
>> when you are not sure which bank you may take a deposit to, but need to
>> record that the customer has made payment.  In some cases you might do
>> both, so long as the total is balanced, say for instance, someone takes
>> back a $30 thing but owes you $5 you would receive a payment from the
>> Refund account for $5, then write a check for $25 transferring to the
>> Refund account from the checking or cash account.
>>
>>
>>> In my case, I need to refund the customer by sending a check from the
>>> checking account. In my experiment, I tried to perform both steps (step 1
>>> first then step 2.)  This didn't work because receiving the payment from
>>> the Refund account zero's out the Refund account.  There is no money in
>>> the
>>> Refund account to transfer to the checking account.
>>>
>> Need to keep it balanced, so either partial for both, or one or the other.
>>
>>
>>> In the previous experiment, I did have a negative balance in the AR
>>> account
>>> so I tried to zero this out and create a credit transaction (withdrawal)
>>> in
>>> the checking account for the check.  I tried to do by creating another
>>> payment, but the payment needs to be negative.  I discovered in GnuCash
>>> 2.4.10, I can not create a negative payment.
>>>
>> If the customer did not owe any money and you created a return invoice,
>> then received the payment from the refund account, you will find that
>> customer now has a negative balance, which if you did not pay them would be
>> a reality, you could just let it sit there and apply to a future
>> transaction.  You could create another invoice to cancel it out, but I
>> couldn't justify that, and besides that would have tax implications also.
>>  I think it would be best to delete that payment by opening the account
>> register for the refund account, find the "payment" and delete it.  Now you
>> can use the transfer function, or skip over the the checking account and
>> write the refund.
>>
>>  I discovered the Customer Summary report shows the reduced income from
>>> the
>>> customer, but the Customer Report does not show the refund unless I
>>> perform
>>> step 1.  The originating invoice that creates the refund shows as $0 in
>>> the
>>> Customer Report.  Ideally, it would show a negative invoice (or credit
>>> note) and a positive payment.
>>>
>>> Thanks a lot for the help.
>>>
>>> Keith
>>>
>> Yes, it is not a perfect work around, and this is one of the
>> shortcomings, a report for the customer may show several normal invoices,
>> and several for $0.00, in my case they may be "Estimates" or "Refunds" and
>> really no way to tell other than the conspicuous "payment" right after a
>> $0.00 invoice assuming nothing else happened that day. I have to check by
>> opening to see..  You can print the "Refund Invoice" and get the customer
>> to sign confirming the credit and application to their account, or you can
>> put in the description "Paid via check #567" if you pay them by check.  I
>> experimented with Reversing payments early on, in other words for a refund
>> of $30 receiving a payment of $30, then opening the a/r or checking
>> register and reversing the amounts from the credit column to the debit
>> column and back, it did show on the reports, but overall was error prone
>> and hard to explain to anyone, so I discontinued that process.  Some times
>> it can screw up your A/R for reasons I can't explain, and the only solution
>> is to delete the transactions and enter all over again..  not fun.
>>
>>  documentation, Wiki and both the GnuCash users and dev mailing lists to
>>>>> find out how to accomplish this.  I don't see anything in the GnuCash
>>>>> application.  The closest thing I have found is Credit Note Wiki page:
>>>>> http://wiki.gnucash.org/wiki/**Credit_Notes<http://wiki.gnucash.org/wiki/Credit_Notes>
>>>>>
>>>> Yes, and it is awesome..
>>
>>
>>>>> or on the road map for GnuCash.  Does anyone have an idea when this
>>>>> functionality might be available?  I fear that it may be a long time
>>>>>
>>>> Using the latest development version is probably not a good idea just
>> yet, I will say that credit memos have saved me more time than any other
>> single feature, so you have to weigh the risk with the  improved
>> productivity, for most the best idea will be to wait.
>>
>> :)
>>
>> --
>> Bob
>>
>>
>


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