Overpayments in Cin7

In the customer invoices, Cin7 only allows payments made on the invoices to be less than or equal to the invoice amount; otherwise, Cin7 will issue a sync error that the Payment exceeds the document amount. This will result in the payment not syncing in Xero. Any excess payment against a customer invoice should be treated as an overpayment. Overpayments against a sale can either be refunded to the customer or converted into a customer credit which the customer can use against future invoices.

Sample Scenario:

Customer Invoice for $50

Customer Paid $60

= Overpayment of $10

Option 1: Overpayments that are refunded to the Customer

1. Record a credit note in the same sales order (this can be a Simple Sale or Service Sale) for the overpayment in Cin7.

2. In the Credit Note tab and click on Copy from Restock/Invoices. Under the Price column, enter the amount of the overpayment and click on Authorise.

Note: [if the credit note is not linked to a specific product or service sold by the organization] Under Additional Charges and Services of a Simple Sale, select the item Refund (this should be set up in the product card as a service item) if the credit note is not linked to a specific product or service sold by the organization. Enter the quantity and price. Click on Authorise.

3. Scroll to the bottom and click on [+Refund]. Enter the details of the refund, the bank account used to refund the customer, the reference, the date of the refund and the amount.

4. Once the sync happens, this record will flow in Xero and will be shown as follows:

5. The credit note will automatically be tagged as paid using the bank account and information provided in Cin7. This will show as Unreconciled since this has not been reconciled/matched with the bank transaction in Xero. To do this, open the bank account, in this case, the (Test) Bank Account and locate the amount of money that came out of the bank, which is $10.00. Click on the OK button to reconcile the transaction.

Option 2: Convert the overpayments as customer credits

In using the overpayment as a customer credit, the process will be the same for the first 2 steps as shown above. However, for step 3, select [Customer Credit] instead of [+Refund].

1. Record a credit note in the same sales order (this can be a Simple Sale or Service Sale) for the overpayment in Cin7.

2. In the Credit Note tab and click on Copy from Restock/Invoices. Under the Price column, enter the amount of the overpayment and click on Authorise.

Note: [if the credit note is not linked to a specific product or service sold by the organization] Under Additional Charges and Services of a Simple Sale, select the item Refund (this should be set up in the product card as a service item) if the credit note is not linked to a specific product or service sold by the organization. Enter the quantity and price. Click on Authorise.

3 . Scroll to the bottom and click on [Customer Credit]. Fill in the information needed, such as the Reference, Date Paid and Amount. Click on Create.

Cin7 will record the customer credit as follows:

4. The overpayment will be recorded under the Customer Deposit account in Xero, or whatever account is setup in Cin7's account mapping. This can be changed to your preference. This can be found under Settings > Reference Books > Account Mapping.

5. The customer credit that syncs to Xero will show as follows:

As shown above, instead of the usual bank account, it will show as paid using the Customer Deposit account, which is a liability account.

6. In the case where the customer places another order, the overpayment or customer deposit can be used; you will be notified through a prompt on the Invoice stage in Cin7 that the customer has an available credit that can be used to pay off the current order.

Click on Yes! and you will be prompted to another window that will list all of the credits that are available under the customer's account. Select the credit that you would like to use. Using our previous example, the credit note was CR-00112. Put a checkmark right beside this option and click on Add & Save.

You will be redirected back to the invoice, and you will see that the credit has been applied to the current order.

7. In Xero, the order will show the payment using the bank account and the customer credit.

8. Based on the screenshots above, the customer deposit account in Xero is affected by the following situations:

Increase - if there is an overpayment and this will be used as a customer credit to be used against the customer's future invoices

Decrease - the customer credit is used either as a full or partial payment for a current customer order

Reconciling the Customer Payment Received in Xero

1. Click on Find and Match

2. In the search box, enter the invoice number if known. If not, use the customer's name and locate the applicable invoice.

3. For the overpayment of $10.00, click on New Transaction and select Receive Money.

4. Under the Received as option, select Overpayment, provide the Reference and click on Save Transaction.

5. Review the transaction and click on Reconcile.