Overpaid by agency? :-)

[psychocandy]

Very simple.
Consider a scenario. You go to a local newsagent and pay cash. When he gives back the balance, if he gives an extra pound, what will you do ? Keep it ?

If you will keep it, then in your described situation,don't let the agent know but think of how you will handle the excess in your accounts.

If you will return it, then in your described situation, let the agency know and work out how best to resolve the difference. Make sure you do not loose any money in exchange or bank fee or whatever. It was their mistake, so they have to take the hit. If they refuse to, then charge them an admin fee.

It is generally accepted that keeping other people's money is not moral. Your morals don't have to match the general view. Each on their own. There is no hard and fast rule.

Good point. Just thought - it costs me 29E to transfer to another euro account so if they want it back straight away they'll have to lose this.

[Sockpuppet]

Good point. Just thought - it costs me 29E to transfer to another euro account so if they want it back straight away they'll have to lose this.

Simple view is to tell them and lose a day from the next invoice.

[ASB]

Simple view is to tell them and lose a day from the next invoice.

No, you don't lose a day from the next invoice. If that is the case the discrepancy will be carried through the AR. (what a customer may have paid and when has no impact on what they should be invoiced; that is simply governed by the work undertaken).

Sure you tell them, they pay the next invoice (minus the overpayment from this one) when its due and the accounts are correct. Given the OP is invoicing in Euro I'll pre-empt the next question with this link:

HM Revenue & Customs

Particularly the bit about partial payments (since that is what is happening in effect).

The overpayment is already reflected in the accounts (hopefully in a specific accounts receivable account for the customer) by virtue of the payment being entered.

[Sockpuppet]

Sure you tell them, they pay the next invoice (minus the overpayment from this one) when its due and the accounts are correct.

Exactly what I said. Granted "lose a day" was a bit vague but the principle is the same.

[craig1]

Either refund it or issue them with a credit note against your next invoice. That latter option is probably simpler and involves no actual money transfer.

[psychocandy]

Either refund it or issue them with a credit note against your next invoice. That latter option is probably simpler and involves no actual money transfer.

Yep. Thanks. Sounds like the best option.

[oversteer]

If you did try to hold onto it you then have to falsify an invoice and then you're on dodgy ground.

An agency overpaid me £5,500 once. It took them nine months to realise !

Either refund it or issue them with a credit note against your next invoice. That latter option is probably simpler and involves no actual money transfer.

I don't think you should credit it, the invoice is still valid, just the payment against that invoice is incorrect. If you credit it you'll be out of step with payments and invoices.

[NotAllThere]

If you receive an overpayment, and know (or should have known) that you have, if you simply keep it, you've committed theft.

For example, if you're overpaid by a few pounds, you might well not notice - at least until you did your account. If you're overpaid by a few thousand pounds then (unless you regularly receive huge sums into your account), you could be deemed to "should have known".

As soon as you notice the discrepancy, you're obliged to notify the agency. There's no moral grey area here, it's to do with whether you're happy committing theft.

Credit note is the easiest option all round in this case.

[JamJarST]

I don't think you should credit it, the invoice is still valid, just the payment against that invoice is incorrect. If you credit it you'll be out of step with payments and invoices.

Absolutely agree, a credit note will not solve the problem and will actually increase the difference. For example lets say the invoice is for £2500 and the payment is £3000. The account is sitting with a credit balance of £500. If you issue a credit note it will increase that credit balance to £1000, meaning you owe them £1000. You should issue a statement showing the invoice of £2500 and the payment of £3000 and reflecting the account balance of £500 credit.

[craig1]

Absolutely agree, a credit note will not solve the problem and will actually increase the difference. For example lets say the invoice is for £2500 and the payment is £3000. The account is sitting with a credit balance of £500. If you issue a credit note it will increase that credit balance to £1000, meaning you owe them £1000. You should issue a statement showing the invoice of £2500 and the payment of £3000 and reflecting the account balance of £500 credit.

You're mixing up accrued and actual balances there. Using your example, you owe them £500 for the overpayment but this isn't reflected against anything in your books giving a mismatch of £500 when you reconcile accrued against actual. If you issue them a credit note for £500 then this formally reflects that you owe them £500 against the accrued books meaning you can reconcile these transactions.

If the next invoice is £2500 then they simply pay £2000 using the credit note for the other £500 meaning that your actual balance equals the genuine value of the invoices. Also makes their accounting easier.

If you're doing cash accounting and don't want to start going into accrued balances then you refund them the £500, hope they get it, credit it to your account and then pay the full invoice next time. Far simpler to do a credit note for both yours and their books.