[GNC] best accounting practice for refund

[Derek Atkins]

You would only need a credit note if a client cancelled their contract and 
wanted (part of) their deposit back.

-derek
Sent using my mobile device. Please excuse any typos.
On June 26, 2019 10:21:56 PM Tim Quinn <tim.quinn at att.net> wrote:

> Many of my wife’s tutoring clients will prepay for several sessions (to get 
> scheduling preference and a slight price discount). I create a separate 
> invoice for each client visit (that way the customer report shows the 
> payments and individual sessions nicely), and after posting each invoice I 
> pay it using the remaining balance from the prepayment. GnuCash keeps track 
> of all that very nicely as Adrien described.
>
> I have never used credit notes for this, though. GnuCash knows that the 
> subsequent invoices and the prepayment involve the same customer so it’s 
> really easy to pay those later invoices using what’s left of the prepayment.
>
> I am not seeing the value in adding credit notes into this picture. Am I 
> missing something?
>
> Thanks.
>
> - Tim
>
>> On Jun 26, 2019, at 2:52 PM, Adrien Monteleone 
>> <adrien.monteleone at lusfiber.net> wrote:
>>
>> You have at least 2 options I can think of at the moment:
>>
>> #1 - continue to issue credit notes in your system, but don’t send them out 
>> or pay them with a check. When you have the next positive invoice, ‘pay’ a 
>> portion (or all) of that invoice with the credit note. Simply process a 
>> payment, select the credit note line and an invoice line you want to apply 
>> it to in the top part of the window. GnuCash will offset the invoice with 
>> the credit note for you. If the credit note is more than the invoice, it 
>> will retain the left over as remaining AR credit to be used on subsequent 
>> invoices. You can see the customer’s balance any time either by looking at 
>> an AR aging report, or a Customer Report. Outstanding credit notes appear 
>> in the Invoices Due Reminder window.
>>
>> #2 - If your client regularly pays in advance based on an estimate and you 
>> invoice later, instead of applying the payment to an invoice, apply it to a 
>> Liabilities:Customer Deposits account. Then when you create and post the 
>> final invoice, process a payment for it from this account. You could keep a 
>> separate deposit account for each customer but that might get tedious. You 
>> can run a report on the account sorted by payee to show that info and even 
>> keep that report open in a tab if desired, choosing to refresh it as 
>> needed. If this might only happen for pre-paid expenses, then you can still 
>> use this method, but only for the pre-paid expense part, which you could 
>> (or not) choose to invoice separately.
>>
>> Regards,
>> Adrien
>>
>>> On Jun 26, 2019, at 1:46 PM, Eric Rathhaus office <eric at ewrlaw.com> wrote:
>>>
>>> Hi - I have a client for whom I have many jobs.  On some of these jobs, the 
>>> client prepaid expenses that I did not use.  In the past, I’ve always 
>>> created a credit note for a refund and sent the client a check.  However, 
>>> my client prefers instead that I credit this amount towards future work.  
>>> I’m not sure how to accomplish this cleanly.  I could keep a running total 
>>> of the amount and discount from the total prepayment until it’s used up.  
>>> But this seems clunky and maybe not the best practice.  Any other 
>>> suggestions on how to account for the refund against future work?
>>>
>>> Kind regards,
>>>
>>> Eric W. Rathhaus
>>
>>
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