Where a customer has overpaid, it shows on statements and if late payment fees are set, these. also show on the statement. Surely if a customer has overpaid, this should not be subject to the
late payment status being applied?
In theory if a customer pays late, then late payment fees are due.
If they overpay, is that an error on their part?
Will you repay the overpaid amount?
And before or after deduction of late payment fee?
This is a management decision and not one that can be solved by Manager.
Late payment fees accrue to invoices, not accounts.
Yes, but the op isn’t about how late payment fees are applied. Instead, it’s about how late payment fees shouldn’t apply to overpaid invoices.
It should only apply to overdue and not overpaid.
I am not exactly sure what @Ealfardan means with respect to what @bartona wrote. I do not believe @bartona was claiming that overpaid sales invoices were being assessed late fees (if that is what @Ealfardan thought). Let me clarify detail.
Late fees are applied to individual sales invoices (when that option is selected) every month that the specific invoice remains unpaid or only partially paid after the due date. It does not matter what the overall status of the customer’s subaccount in Accounts receivable might be. Every other sales invoice ever issued to that customer could be overpaid, but if payment for the specific invoice with late payment fees is past due, the late payment fee will be assessed. In this respect, each sales invoice is a standalone transaction.
Now, if you want an overpayment on one sales invoice to be automatically applied to another with late payment fees owed, simply leave the Invoice field blank on the overpaid invoice. The excess receipt will automatically be applied to unpaid invoices in order of due date.
If you want to forgive the late payment fee because of overpayment on another sales invoice, edit or delete the late payment fee itself in the Late Payment Fees tab. See Assess late payment fees | Manager.
@bartona, your expectation seems to follow the practice of segregating overpayments to a Customer credits account. Some accountants prefer this approach over combining them in Accounts receivable. Manager used to operate that way years ago. (Excess payments against purchase invoices were also posted to a Supplier credits account.) But the approach was abandoned because it was more difficult for novices to understand and included more automatic control accounts. It was also more difficult to track down mistakes. Both approaches are equally valid, but the current one simplifies automatic application of overpayments, as well as combined receipts/payments covering multiple invoices.
That’s what I understood