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Best practice in Dynamics GP - How to process an overpayment that was refund from a vendor?

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Posted on by 15

Hello,

We overpaid an amount to a vendor so its sitting in AP as unapplied cash on the vendor.  Then we received a refund of overpayment from the vendor.  How can we have this amount show in the AP module after we scan the payment as a remote deposit in the bank module?

Thanks for the help.

  • RE: Best practice in Dynamics GP - How to process an overpayment that was refund from a vendor?

    Thank you so much, Joseph.

    We used this method previously. I was wondering if there's a more appropriate way instead of creating a fake invoice to balance the overpayment.

    Regards

  • Suggested answer
    Joseph Markovich Profile Picture
    Joseph Markovich 3,749 on at
    RE: Best practice in Dynamics GP - How to process an overpayment that was refund from a vendor?

    Enter the Return transaction in AP. Make sure to put the same amount in the Cash or Check field. This is how you can get the money to show back in Financial > Transactions > Bank Deposits as a cash receipt.

    Open distributions. The PURCH distribution is going to default to whatever the purchases account is for the vendor. You could change it to a miscellaneous or a suspense account too.

    Instead of Accounts Payable, you are going to see the cash account associated the checkbook.

    This will let you deposit the money back in your bank account and the checkbook/cash GL account will be OK.

    Then enter an invoice for the vendor for the overpayment amount. Either keep the PURCH distributions the default or change it to the miscellaneous or suspense account (if you changed it) from the return.

    Apply the overpayment to the invoice for the vendor.

    All of your vendor totals, GL accounts and AP will be correct.

    I hope this helps.

    Thanks.

    Joe

  • RE: Best practice in Dynamics GP - How to process an overpayment that was refund from a vendor?

    Hi,

    What if we can't consolidate the vendor as it has only profile in AP module and never became or will be a customer?

    Any advice on recording the refund in AP (which we can do via return) and bringing the unapplied payment to zero against that refund in AP will be highly appreciated.

    Regards

  • Suggested answer
    kmalone43 Profile Picture
    kmalone43 880 on at
    RE: Best practice in Dynamics GP - How to process an overpayment that was refund from a vendor?

    There's a few different ways to handle this but I think the cleanest would be via the Customer/Vendor consolidation process.

    Not a great quality video but I put something out there awhile back that might be of some help. www.youtube.com/watch

    Outside of that, if you already made the bank deposit, you could probably issue a debit memo to the vendor's account @ this point & ensure you're hitting the correct G/L accounts along the way.

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