customer has balance owing to us but we paid them from that amount for damages

Question

on my balance sheet i have an outstanding acct receivable  from 4 years ago i want to reconcile.  since we owed client an amount as compensation due to damages, how do i apply the amount customer deducted from the total invoice they owed us?

Genreve_S · Answer

Hi @Lucian1,

Thank you for bringing your concern to our attention. I apologize for any delay in our response.

I understand the significance of accurately recording all transactions in your file. The deduction can be recorded as a credit for the customer. This credit can then be applied to an existing invoice, effectively reducing the outstanding balance. I recommend going through this article, 'Customer returns, credits and refunds'. It provides a comprehensive guide to creating credit for the customer.

Please feel free to reach out if you need further assistance.

If my response has answered your inquiry, please click "Accept as Solution" to assist other users find this information.

Thanks,

Genreve