AR Payment Using Customer Deposits GL

To make a very long story short, we have a customer that overpaid. We’ve made efforts to return the overpayment, but am not getting any response from them.

To make this money easier to return, we made a manual ledger entry that accepted the overpayment into Cash and 214000 Customer Deposits.

We now have an invoice that we can apply some of this overpayment to and want to be sure it is hitting the correct GL numbers.

  1. Can you assist me with the correct way to receive this money from GL 214000 as a Deposit here: Cetec ERP
  2. Can you assist with the correct account to use on the AR Payment screen:
    Cetec ERP

Thank you!


To clarify, I do not see a manual ledger entry to Cash account and Customer Deposits for the amount in the AR Payment link. Can you send a link to that entry please ma’am?

CETEC ERP Customer Support

Meantime, so you will have standard procedure if this comes up again, when you have an overpayment from a Customer with nothing to apply it to, and you want to refund to the customer…To send a refund check- Go to the Accounting Tab > A/R > Credit Memos in order to create a credit memo and you can write a check from the credit memo.
Since you now have Invoices to apply the overpayment to I can assist with how to get this recorded properly once I hear from you with a link to the manual ledger entry made, but I also need to understand what you mean by “receive”? Did you send a refund check to the customer and they sent it back, or is this the original overpayment they made you were trying to record?
Thank you for additional information.
CETEC ERP Customer Support

This customer has never paid correctly. It appears another one of their other locations handles payments and that they do not pay off of our invoices, but something in their system is triggering payment amounts that are not correct. We’ve documented what we are guessing happened on their end and contacted anyone we know there with the information but have not receive a reply so that a review of the account and refund may be completed.

In the past, this customer has not been willing to accept refunds for overpayment. We accepted their overpayments and applied them as prepayments to their orders. However, when we saw a break in ordering coming up, we made ledger entries in hopes that we could avoid a mess in the system when returning the funds.

These are the manual ledger entries that have been made:
Ledger Entry 126586

Ledger Entry 126925

Ledger Entry 127603

Ledger Entry 127604

I want to use the money recorded in GL214000 on two recent invoices for them. No refund checks have been sent back to them as we are waiting on them.

Our bookkeeper does not see a way to process an AR payment without going through the Deposit screen - like the Deposit 2441 link above. That is what I mean by “receive” the money. I’d like to know what should be entered on that screen. The money was already entered into our Cash 1010 account with the manual ledger entries - so I don’t want it hitting our Cash 1010 account a second time.

I’d also like to know what should be entered on the AR payment screen above for GL accounts.

The second Deposit and AR Payment we are trying to do the same thing with is below:


Thank you for the replies and all the links. That all is extremely helpful.
I’m going to create some steps to get you to where you would like to be on this, run it past my other accounting team member to make sure I’m covering all the bases, and will get back to you as quickly as possible.
My current observation is that we likely will have to plan on reversing the ledger entries in the current period as they do not interact with the AR aging as the AR objects do (Invoices, CR memos, AR Payments, Unapplied Cash), in that you will not have a customer AR aging impact nor be able to apply those ledger overpayments to any Invoices to clear them from that Customer’s AR aging. Then we can walk you through the steps for Customer overpayments that create Unapplied Cash objects that can apply as payments on Customer Invoice objects in the normal procedures for receiving payments from the Customer.
The new steps will include offsetting reversing ledger entries to be cleared on the current month’s account reconcile so your cash account will have -0- impact on cash balance.
We will be right back with complete directions to resolve this issue.

CETEC ERP Customer Support

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The following steps will record your overpayments from your customer in a manner that will record them properly within AR so that the overpayments can be applied against Invoices for that Customer, until the overpayment is used up.
Note that the AR Pmts for any overpayment amount creates Unapplied Cash object(s) that will come up when Invoices become available for payment. You would “Include” any available Unapplied Cash as payment on any Invoice that is available to apply payment to. Both available Unapplied Cash and Invoices come up in AR Payment screens.

  1. Go to account reconcile 68 and change status to “Open”, then uncheck the reconcile box for GL Entry 126586, leaving the account reconcile in “Open” state.
  2. Go to account reconcile 70 and change the status to “Open”, then uncheck the reconcile box for, leaving the account reconcile in “Open” state. Deposit 2400 (AR Pmt 18461) is already unreconciled on that acct rec 70.
  3. Your GL entries are now all available to edit; you will need to navigate to each of the GL entries (via the links you sent to each one) that were created to “receive” the cash overpayments and in each GL ledger screen, scroll down to bottom right and click the blue “Reverse Entry?” button. A box should open below that with the Reverse on date (use current date November 2023 date)…now click the red “Reverse Entry?” button as well and confirm “Okay?”. Use this process for all four GL entries: 126586, 126925, 127603, & 127604.
    NOTE: The use of the November date for the reversals will leave prior periods Sept and Oct in tact. November activity will offset, so your Cash account balance will not be affected, fyi.
  4. Next navigate to Deposit 2400 dated 2023-10-06 and click the red “Re-open” button to release AR Pmt 18461 for editing. You can click AR Pmt 18461 blue hyperlink from that Deposit screen.
  5. In the AR Pmt 18461 edit screen, click the red “Reopen Payment” button and change the “Payment Value to” 112000 Undeposited Cash, retaining the 2023-10-06 Post On date. Click the blue Payment Complete button.
  6. Next navigate to Deposit 2400 dated 2023-10-06, Update and again Deposit.
  7. Then, since Deposit 2441 is still Open, navigate directly to AR Pmt 18552. In that edit screen, click the red “Reopen Payment” button and change the “Payment Value to” 112000 Undeposited Cash, retaining the 2023-11-03 Post On date. Click the blue Payment Complete button.
  8. Next navigate to Deposit 2441 dated 2023-11-03, Update and again Deposit.
  9. Then, since you have reversed the GL ledger entries 126586, 126925, 127603, and 127604, you will need to create AR Pmt or Pmts for each/all of these overpayments (creating the Unapplied Cash objects referred to previously), using November post on dates for any/all and Payment Value to 112000 Undeposited Cash (offsets the reversal entries). Also make Deposit or Deposits using November post on dates as well. Then these can all be cleared on 2023-12-01 account reconcile for 1010 Cash, marking as cleared on both the reversal entries and the new Deposits.
    Please let us know if you need assistance with any of these steps or if the steps don’t proceed as described, or also of course if everything goes as planned.
    CETEC ERP Customer Support

This is impressive!! I will be working through this on Monday with our A/R person. Thank you so much!

Okay, we sat down to work through this and in step #2 it says “then uncheck the reconcile box for,” but there is no information on which item is supposed to be unreconciled. I don’t want to make any assumptions here, could you please provide what you’d like me to uncheck in step 2? Thank you!

QUICK FOLLOW UP QUESTION! We worked on this again today working through my last question ourselves (so you can disregard my Nov 17 question above). We took the necessary steps and Unapplied Cash for this customer looks great! The only question is, we have Open’ed the Account Reconciles for 68 and 70 in steps 1 and 2 - so that we could uncheck the things that needed to be unchecked. Now that we are done what do we do with these Account Reconciles. Do we recheck the boxes for these deposits that had been unchecked or do we leave them unchecked and then close the reconciles? Thank you for your help!!

I did some checking and the reconciles remained unchanged so I closed them and I think we have this fix completed!