How to Handle Customer Credits

There are two general rules for applying credits to a customers account:

  1. Credit entries should be made as an exact opposite of the original entry.
  2. Credit dollar amounts should NOT be entered simply as a minus number, this will cause any inventory quantities involved in the transaction to be ignored. Instead, enter the quantity as a minus number and the dollar credit amount as a plus number (that is, unsigned). Doing it this way will adjust BOTH the dollar amount AND the inventory quantity appropriately.

For example . . . Let's say you sold a customer 100 gallons of fuel at $1.00 per gallon and improperly recorded the sale to the wrong account. Let's also assume that the batch that this invoice is in has been closed and cannot be edited. To credit the account, you would record -100 gallons of fuel at 1.00 per gallon. In other words, you would make an opposite entry to the original by entering the quantity as a minus number and the dollar credit amount as a plus number.

Note: Do NOT record 100 gallons (a plus number) at -1.00 (a minus number) because, even though this would make the account dollar balance correct, it would misrepresent the gallons of propane sold.

A more complex example of handling a credit would be where a tank comes in from the field with 100 gallons of fuel still in it. The account has a "0" balance and is no longer a customer and would like a refund for the fuel. In this case, you might want to charge the customer a restocking fee of say $30.00 (1 item at $30.00) and then -100 gallons of propane at $1.00 (or whatever the price was that was originally charged). The account would then have a credit balance which would need to be refunded with a check (see How to Handle Refunds for details on how to do this).

Note: You should NOT try to enter a credit through a payment batch because there is no provision for entering quantities in this type of transaction.