Invoice paid twice 13 months ago - can I issue a credit note
Discussion
I used to do a lot of freelancing, but now I don't bother so much. I have two clients left on the books as it were, and I invoice them yearly in order to keep software I've written for them operational.
Last week the accountant of one client emailed asking for a refund for a double invoice payment. I've went on to my online banking to try and find it, but the invoice and payment in question was issued and paid 13 months ago so I can't find it online. I'm waiting to get a printed out statement for that period. I don't recall being paid twice either.
The client is invoiced every year in December, as the software is critical to their business operations so the previous invoice isn't a one off. I've been told by a friend who I was speaking about this to that I should issue the client a credit note instead and deduct this from this years invoice as I'm not able to raise the money to refund the double payment, but only if I have been paid twice.
But as I've never been in this situation before, I'd like to know the best way to proceed.
Last week the accountant of one client emailed asking for a refund for a double invoice payment. I've went on to my online banking to try and find it, but the invoice and payment in question was issued and paid 13 months ago so I can't find it online. I'm waiting to get a printed out statement for that period. I don't recall being paid twice either.
The client is invoiced every year in December, as the software is critical to their business operations so the previous invoice isn't a one off. I've been told by a friend who I was speaking about this to that I should issue the client a credit note instead and deduct this from this years invoice as I'm not able to raise the money to refund the double payment, but only if I have been paid twice.
But as I've never been in this situation before, I'd like to know the best way to proceed.
Strictly speaking you should really pay the money back. However, the sensible thing to do is contact your client and explain to them what has happened. They may be amenable to some sort of offset agreement against future invoices.
You don't need to issue a Credit Note. What happens, if the customer is agreement, is issue a fee invoice in the normal way for subsequent work as and when you would issue that invoice but show the invoice as having been part paid or paid in full (depending on how the overpaid amount matches against the new invoice).
Are you VAT registered?
How have you accounted for the VAT on the overpaid amount?
If they insist on asking for the cash to be paid back toi them, see if they will accept payment by installments.
You don't need to issue a Credit Note. What happens, if the customer is agreement, is issue a fee invoice in the normal way for subsequent work as and when you would issue that invoice but show the invoice as having been part paid or paid in full (depending on how the overpaid amount matches against the new invoice).
Are you VAT registered?
How have you accounted for the VAT on the overpaid amount?
If they insist on asking for the cash to be paid back toi them, see if they will accept payment by installments.
Eric Mc said:
Strictly speaking you should really pay the money back. However, the sensible thing to do is contact your client and explain to them what has happened. They may be amenable to some sort of offset agreement against future invoices.
You don't need to issue a Credit Note. What happens, if the customer is agreement, is issue a fee invoice in the normal way for subsequent work as and when you would issue that invoice but show the invoice as having been part paid or paid in full (depending on how the overpaid amount matches against the new invoice).
Are you VAT registered?
How have you accounted for the VAT on the overpaid amount?
If they insist on asking for the cash to be paid back toi them, see if they will accept payment by installments.
Thanks for that.You don't need to issue a Credit Note. What happens, if the customer is agreement, is issue a fee invoice in the normal way for subsequent work as and when you would issue that invoice but show the invoice as having been part paid or paid in full (depending on how the overpaid amount matches against the new invoice).
Are you VAT registered?
How have you accounted for the VAT on the overpaid amount?
If they insist on asking for the cash to be paid back toi them, see if they will accept payment by installments.
I'm not VAT registered at all, so that's easy enough.
Once I get the bank statements to see what's happened I'll go back to them with the fee invoice. Like I said it's a yearly thing so they will be getting an invoice this year anyway.
Thanks for the advice, I appreciate it.
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