Customer underpaid invoice by $1 and another overpaid by 2 cents

1

I’ve read the forum but just checking what is best way to deal with this.

A customer for this quarter has underpaid by $1.
And I noticed one customer has overpaid 2 cents because they rounded the invoice up so I now have -.02c showing under assets-accounts receivable on summary page even though it is set on cash not accrual.

I understand for the $1, I can credit Accounts Receivable - Customer- inv number for $1 and debit Bad Debts expense $1 (or is credit note better where I debit a Customer Credits expense & does it credit accounts receivable - customer?)

For 2 cents overpaid (yes 2c is hardly worth fussing with) I tried to edit & ‘round up’ the invoice as a quick fix but that rounded to the nearest dollar not nearest 10c. I can’t edit the invoice amount as it is “15.25 sqm @ $25/sqm”. Well actually I’m thinking I could edit the invoice putting details in the description & then qty & unit cost blank with invoice total GST inclusive amount matching the amount paid. Any other ideas welcome.

2

For the $1, you could just leave it and when the customer next buys also send a Statement with the overdue highlighted.

Alternatively, if you noticed these issues while Receiving Money, then you could add a line and allocate the adjustment to a particular account say - Bank Fees & Rounding. If the adjustment is a negative amount, use a minus sign in front.

I don’t recommend Bad Debts, because they aren’t that.

If you noticed these later, go back & edit the Receive Money. This way everything is stored in the one transaction rather then being spread over two.

Don’t edit the invoice as the invoice is not “wrong” the receipt is where the issue is at

3

Thanks, I didn’t notice it when allocating from bank statement as only the invoice number comes up on drop down list.
I’ve actually realised it’s my mistake in the invoice description field, they wanted to pay the invoice in 2 payments so I noted the 2 amounts (halves) & should have had an extra $1 on 2nd payment to equal total, they have only looked at the description & not worried about checking it adds to the total.
I’m not sure I understand how I can Receive Money when the money hasn’t been received. I would think it mucks up the bank reconciliation. Seeing as we are talking about pretty small amounts, what do you say I journal entry from Accounts receivable to say Bank charges & rounding.

4

If a customer pays you 25.00 for an invoice which was for 25.02 then the Receive Money would look like this

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The reconciliation is not mucked up as only 25.00 went to bank account, 25.02 went to the invoice so that’s fully paid and the difference went to the rounding account.

You could Journal or go back and amend the receipt as shown above