CenterPoint^® Accounting - Customer Deposits, Prepayments and Overpayment Processing

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Customer Deposits and Overpayments Video - Duration: 12 min 19 sec

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A customer deposit is a prepayment for the purchase of future goods and services (unearned revenue). Overpayment of customer invoices (A/R) may also be considered customer deposits because they are also considered unearned revenues.

When a customer deposit is entered, it must be posted to a liability account (unearned revenue) that belongs to the Customer Deposits account category.

Step A: Verify or Add a Customer Deposits Account (Onetime Setup)

Step B: Creating Deposits for Customer Overpayments and Prepayments/Deposits

Step C: Applying Deposits to Invoices

Refunding a Customer Deposit

Frequently Asked Questions

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Step A - Verify or Add a Customer Deposits Account (Onetime Setup)

1. Select Setup > Accounts > Accounts and review the list to see if you have an existing Customer Deposits account. If you do, edit that account. Otherwise, click New to begin adding a new account.
2. If you are editing an existing Customer Deposits account, verify that the Type is set to Liabilities and the Category is set to Customer Deposits. Correct if needed. Then, click Save and skip to Step B section below.
3. When creating a new account, enter an appropriate Number and Name.

4. Select Liabilities as the Type.
5. Select Customer Deposits as the Category.
6. Click Save.

Step B: Creating Deposits

There are two types of deposits that can be entered in CenterPoint depending on if the customer is giving you a prepayment or deposit for a futre purchase, or if they have inadvertently overpaid an invoice. Step-by-step instructions are included below for both scenarios.

Creating a deposit for a customer prepayment or deposit

1. Select Processes > Sales > Receipts.

2. Enter the Bank Account the receipt will be deposited into. If using bank deposits, also specify the appropriate Bank Deposit.
3. Enter the customer the deposit was Received From, the Date, and the Amount. The Payment Type and Check/Ref # fields are optional. Messages will display when duplicate sequence numbers are found based on the Duplicates and the Check When fields in Setup > General > Numbering Sequence. The messages inform you if a duplicate sequence number was found and how the duplicate sequence number should be replaced with a new sequence number, automatically or manually.
4. In the grid, select your Customer Deposits account in the Account field.
5. If a receipt for the customer is desired, click the Print button.

6. Click Save to complete the transaction. This receipt will now display as a deposit on the customers account, increase the bank account and increase the customer deposits liability account.

Creating a deposit for a customer's overpayment

1. Select Processes > Sales > Receipts.

2. Enter the Bank Account the receipt will be deposited into. If using bank deposits, also specify the appropriate Bank Deposit.
3. Enter the customer the deposit was Received From, the Date, and the Amount. The Payment Type and Check/Ref # fields are optional. Messages will display when duplicate sequence numbers are found based on the Duplicates and the Check When fields in Setup > General > Numbering Sequence. The messages inform you if a duplicate sequence number was found and how the duplicate sequence number should be replaced with a new sequence number, automatically or manually.
4. Click on the Apply to Open Invoices button.

5. Enter the amount received in the Receipt Amount field, and click Apply.
6. The remaining amount of the receipt will display in the Over Payment (Customer Deposit) area. Select your Customer Deposits account in the Account field. The amount will display automatically.
7. Click OK to return to the original receipt screen.

8. Click Save to complete the transaction. This overpayment portion of this receipt will now display as a deposit on the customers account, increase the bank account and increase the customer deposits liability account.

Step C: Apply Deposits to Invoices

There are two processes that can be used to apply a previously entered deposit to an invoice. Both are described below.

Option 1 - Apply the deposit while entering the customer sales invoice

1. Select Processes > Sales > Customer Invoices. Use the normal process to enter an invoice for the customer.
2. By default the system will automatically apply any unapplied deposits to the invoice. The amount applied will be displayed in the Amount Received box

The deposit amounts will automatically be applied to the current invoice unless you change the deposit application by clicking the Amount Received button and change the deposit application. If the applied deposit is less than or equal to the balance due on the current invoice, the entire amount is applied. If the applied deposit is greater than the balance due on the current invoice, only the balance due will be applied. The Balance Due is calculated as the Invoice Total - Amount Received Applied - Sum of Customer Deposits Applied - Discount Amount. Click OK.

Note: If you prefer that the system not automatically apply deposits, click on the Options button at the bottom of the screen, select Apply Customer Deposits, and then select Manually Apply Customer Deposits to Invoices. 

If you are manually applying customer deposits, the amount in the Amount Received box will always display as 0.00 even if you have deposits available for application. To display all outstanding deposits and manually apply the deposit, click Amount Received. The Apply Customer Deposits screen displays all available deposits that have previously been received with a deposit date that is less than or equal to the current invoice date and not yet applied to a sales invoice. To apply the deposit to the invoice, select the check box next to the Date and then click OK. If the applied deposit is less than or equal to the balance due on the current invoice, the entire amount is applied. If the applied deposit is greater than the balance due on the current invoice, only the balance due will be applied. The Balance Due is calculated as the Invoice Total - Amount Received Applied - Sum of Customer Deposits Applied - Discount Amount.

3. The Net Due is calculated as the Invoice Total - Amount Received Applied - Sum of Customer Deposits Applied - Discounts.
4. Click Save to complete the invoice and application of the deposit.

Option 2 - Apply the deposit after the customer sales invoice has been entered

1. Select Processes > Sales > Apply Customer Deposits.

2. Enter the Customer and the Transaction Date.
3. Click on the Lookup button to the right of the Deposit field to display all unapplied deposits. Select the appropriate deposit from the list. (Use the Notation column to identify specific customer deposits .).

4. In the grid, select the invoice(s) to apply the deposit to. All unpaid invoices will display in the grid. To select an invoice, put a check in the Apply box.
5. Click Save to complete the transaction.

Refund a Customer Deposit

Option A: Refund a Customer Deposit with a Printed Check

1. Select Processes > Sales > Refund Customer Deposits.

2. Enter the Company/Fund, Customer, and select the Refund Date. In the Refund Method box, select Payment.
3. Select the BankAccount. If you need to print a check for the refund, enter the check number and check the Print this check? box.
4. Memo Line 1 will display the following text: "Refund customer deposit/overpayment". This text can be changed. Enter any other information into the Memo Line 2 box.
5. Select the deposit to be refunded.
6. Click the Print button. (An image of a printer displays on the button. A green check mark means the check will be printed and a red X means the check will not be printed.) Select whether the check should be printed when it is created, the printer to print the check to and the number of copies to print. To set your default for the Print button, right-click on the button and select Set As Default. To override the Print button default, click the Print button and change the settings on the Print Settings screen.
7. Click Save to complete the refund .
8. Click Close.

Option B: Create an Vendor Invoice for a Refunded Customer Deposit  

1. Select Processes > Sales > Refund Customer Deposits.

2. Enter the Company/Fund, Customer, and Refund Date.
3. Select Accounts Payable Invoice as the Refund Method.
4. Select the AP Account and enter an optional Invoice Number.
5. Select the Customer Deposit you are refunding.
6. Click Save to complete the refund and create the AP Invoice. Click Close.

Frequently Asked Questions (FAQ)

Q: Which report should I use to review my customers outstanding deposits?

A: The Customer Deposits report. Select Reports > Reports > Transaction Reports > Receipts > Customer Deposits.

Q: Is there a way to un-apply a deposit to an invoice?

A: Yes. The easiest way to do this is by using the drill-down capabilities in our reports.

1. Preview the Applied Customer Deposits Journal (Reports > Reports > Transaction Reports > Receipts > Applied Customer Deposits Journal).

2. While previewing the report, verify that it is in interactive mode by clicking on View and selecting Interactive Mode. Click on the dollar amount to be un-applied in the Amount Applied column to display the original transaction that applied the deposit (this will be either the Apply Customer Deposit or Customer Invoice screen).
3. If the Apply Customer Deposit screen is displayed, click the Delete button.

Q: Which report will show me deposits that have been applied?

A: The Applied Customer Deposits Journal (Reports > Reports > Transaction Reports > Receipts > Applied Customer Deposits Journal) will display all applied deposits. While previewing this report, use the drill-down capabilities to review which invoice(s) it was applied to. This is done by clicking on the dollar amount while previewing the report.

Q: Can I delete a customer deposit?

A: If a customer deposit was inadvertently entered, it can be deleted as long as it has not been included in a bank deposit and is not in a closed period.

1. Preview the Customer Deposits report (Reports > Reports > Transaction Reports > Receipts > Customer Deposits). Note: While previewing the report, verify that it is in interactive mode by clicking on View and selecting Interactive Mode.
2. Click on the deposit amount to be deleted. On the Applied Customer Deposits Journal that is displayed next, again click on the deposit amount. The original Receipt transaction will be displayed.
3. Select the Delete button.

Q: Will customer deposits/overpayments be included in the Open Invoice and Aged Receivable reports?

A: Customer deposits and overpayments can be included in the Accounts Receivable Aging, Customer Deposits, Applied Customer Deposits Journal, and the Customer Ledger reports. There is not an option to include them in the Accounts Receivable Open Invoice report.

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