Customer pays invoice twice. Refund fee?
Discussion
Our invoices are the same year-round and subject to an inflation adjustment annually, all B2C. We have a customer who repeatedly pays the old amount and the adjusted amount. I've asked if there's anyone can help him with his finances and requests for bank details go without reply. I'm now having to send a cheque, but it's a pain in the bum (I was as surprised I could find a cheque book), he does pay them in. Getting him to change the amount previously has been a battle - only a suggestion we will withdraw our service gets attention. I genuinely think he's the sort of chap that does it for s
ts and giggles! Retired and wealthy, but not daft.
Can I charge an admin fee for processing the refund each month? If so, what would be a reasonable fee? Hopefully it won't come to that, but it might get him to sort it. Small invoice <£300pcm which puts him bottom 5% in terms of value to us and we're a small VAT-registered business.
ts and giggles! Retired and wealthy, but not daft. Can I charge an admin fee for processing the refund each month? If so, what would be a reasonable fee? Hopefully it won't come to that, but it might get him to sort it. Small invoice <£300pcm which puts him bottom 5% in terms of value to us and we're a small VAT-registered business.
22 said:
Our invoices are the same year-round and subject to an inflation adjustment annually, all B2C. We have a customer who repeatedly pays the old amount and the adjusted amount. I've asked if there's anyone can help him with his finances and requests for bank details go without reply. I'm now having to send a cheque, but it's a pain in the bum (I was as surprised I could find a cheque book), he does pay them in. Getting him to change the amount previously has been a battle - only a suggestion we will withdraw our service gets attention. I genuinely think he's the sort of chap that does it for sts and giggles! Retired and wealthy, but not daft.
Can I charge an admin fee for processing the refund each month? If so, what would be a reasonable fee? Hopefully it won't come to that, but it might get him to sort it. Small invoice <£300pcm which puts him bottom 5% in terms of value to us and we're a small VAT-registered business.
How about keeping the money as a credit on his account and only processing a refund when he asks for one.ts and giggles! Retired and wealthy, but not daft. Can I charge an admin fee for processing the refund each month? If so, what would be a reasonable fee? Hopefully it won't come to that, but it might get him to sort it. Small invoice <£300pcm which puts him bottom 5% in terms of value to us and we're a small VAT-registered business.
Eric Mc said:
The decent thing to do is to contact the customer and inform them that they have overpaid. Give them the choice of a refund or an offset against the next order.
Legally, you are not allowed keep it.
That not correct, legally you’re not allowed to spend it. Keep the money and record it as a credit against his account. Let them know and if they ask for refund give to them or simply take it off the next order. Cheques are a complete pain and particularly if they don’t cash them.Legally, you are not allowed keep it.
How do you show in your records that you have not used the overpaid funds for your own business (or personally)?
Do you keep your customer cash in separate bank accounts for each customer?
The reality is that cash from customers goes into the business bank account and becomes part of normal operating cash funds. It is imposssible to show that you have not spent the customer's money.
All you can show is that there is a negative balance on that particular customer's sales ledger account i.e. you are showing that your customer has paid you money for which there is no matching invoice.
Most decent businesses, once they realise what has happened, will contact their customer to inform them that they have overpaid and ask them whther they would like a refund or whether the overpayment can be kept for offset against future sales to that customer.
Do you keep your customer cash in separate bank accounts for each customer?
The reality is that cash from customers goes into the business bank account and becomes part of normal operating cash funds. It is imposssible to show that you have not spent the customer's money.
All you can show is that there is a negative balance on that particular customer's sales ledger account i.e. you are showing that your customer has paid you money for which there is no matching invoice.
Most decent businesses, once they realise what has happened, will contact their customer to inform them that they have overpaid and ask them whther they would like a refund or whether the overpayment can be kept for offset against future sales to that customer.
Eric Mc said:
Most decent businesses, once they realise what has happened, will contact their customer to inform them that they have overpaid and ask them whther they would like a refund or whether the overpayment can be kept for offset against future sales to that customer.
From the OP "I've asked if there's anyone can help him with his finances and requests for bank details go without reply."The OP has tried to do what you describe & got nowhere.
InitialDave said:
How?
Send a cheque.It's up to him to decide whether he wants to bank it or not.
You could even send actual cash (depending on the amount involved).
He sounds like the type of customer who is too much trouble so I would be inclined to not do business with him in future.
Eric Mc said:
Send a cheque.
It's up to him to decide whether he wants to bank it or not.
You could even send actual cash (depending on the amount involved).
He sounds like the type of customer who is too much trouble so I would be inclined to not do business with him in future.
That is what is happening currently: a cheque is sent with the refund each month, and the customer banks them.It's up to him to decide whether he wants to bank it or not.
You could even send actual cash (depending on the amount involved).
He sounds like the type of customer who is too much trouble so I would be inclined to not do business with him in future.
However, the question asked is how best to overcome this onerous monthly admin overhead.
jeremyc said:
hat is what is happening currently: a cheque is sent with the refund each month, and the customer banks them.
However, the question asked is how best to overcome this onerous monthly admin overhead.
Stop dealing with him. You are not obliged to do business with people who are un-cooperative.However, the question asked is how best to overcome this onerous monthly admin overhead.
If his custom is vital to your own business i.e. he's a very important customer, then maybe you might just have to put up with his eccentricities. Personally, I'd dump him as a client.
Gassing Station | Business | Top of Page | What's New | My Stuff