Design Manager Knowledge Base Article

 

 

 

Title/Subject:

Client returns and refunds

Category:

Design Manager 2000

Type:

How To

Last Reviewed:

Wednesday, December 21, 2005

Article ID:

10000106

 

 

Entering a Client Return

 

When a client returns an item, you will have to make adjustments to your DM2K records to properly account for the return. The adjustments you make will be determined by the conditions surrounding the return and the disposition of the item. If you do not have the optional accounting module you will only need to adjust the client's records. If you have the accounting module you may also have to adjust the vendor's records. As the adjustment of the client's records is independent of the vendor's records, each will be taken in turn starting with the client's adjustment. There are many combinations of returns, and below are the most common situations for client returns…

 

 

* Client Returned an Item that has no Deposit or Invoice Attached

 

In this case there has been no accounting entries associated with the item. You will not need to make any entries to reflect this return. You may want to delete the item from the project or proposal that it is on.

 

 

*Client Returned an Item that has a Deposit but has not been Invoiced.

 

For this situation, you will need to move the deposit allocated to the returned item to a different item or refund the client part of the deposit.

 

1. Find the deposit and Void it. Then Highlight the proposal and Edit the proposal that used to have the deposit under it.

 

2. Remove the check mark from the tagged column next to the item that the client does not want. Print and accept the changed proposal.

 

3. Re-enter the deposit against the proposal. If you need to give the you client money back, then enter only the amount of the deposit that are keeping. If you are keeping the whole deposit, just re-enter it and thecomputer will automatically increase the deposit on each of the remaining items.

 

4. If you are refunding the client part of the deposit, do the following.

           

            a.) Highlight the deposit on the Documents and Accounting Window and press Edit to change the amount of the deposit.

           

            b.) Next, enter a Miscellaneous Cash Receipt for the amount that you are refunding. Use the same date and cash account as the original deposit. Also, use the client deposit account for the G/L account on the receipt.

 

            c.) Now enter an operating expense (you can use a one-time vendor) to your client for the amount you are giving back to them. Again, use the client deposit account.

 

            d.) You can write the actual check to your client by using the Checking Window, Pay/Print tab at any time.

 

 

*Client Returned an Item that has been Invoiced but there has not been a Final Payment

 

Since the item has been invoiced, you must issue a credit for the item. You can use the Reverse/Credit Invoice function to automatically credit the invoice.

 

1. Highlight the Invoice on the Documents and Accounting Window and choose Void. This will open the Reverse/Credit Invoice Window.

 

2. Enter the date of the credit and a brief description if you wish. Choose OK to print the Credit Memo. Accepting the Credit Memo will reverse the invoice. A red X will appear in front of the invoice on the Documents and Accounting Window to signify that the invoice has been reversed (credited).

 

 

*Client Returned an Item with an Invoice and has Paid in Full

 

The action required in this case will depend on what is to be done with the payment.

 

Usually, the client will get a refund check, have the payment held as a deposit, or apply the payment to some other invoice.

 

If the payment is to be held as a deposit, simply void the payment under the invoice and re-enter it as a deposit against a proposal or as a retainer against the project. If you need to void part of the payment, simply edit the payment and change the amount, then re-enter the difference as a deposit or retainer.

 

When refunding the client part or all of the payment do the following after voiding or changing the payment: Enter a Miscellaneous Cash Receipt for the amount that you are refunding. Use the same date and cash account as the original payment. Also, use a revenue account for the G/L account on the receipt. Now enter an operating expense (you can use a one-time vendor) to your client for the amount you are giving back to them. This time use an expense account to record the return. You can write the actual check to your client by using the Checking Window, Pay/Print at any time.