Overpayment (bookkeeping)

The case discussed here, seems to be about crediting and credit invoices, but it's actually about overpayment:

What happened

#	Description	Accounts receivable	Checking account	Revenue
1	Issueing invoice 2022-006	€ 4.000		€ 4.000
2	Payment 2022-006	€ 4.000-	€ 4.000
3	Crediting previous invoice 2022-006	€ 4.000-		€ 4.000-
4	Issueing corrected invoice 2022-010	€ 3.000		€ 3.000
5	Issueing invoice 2022-011 with € 1.000 discount	€ 5.000		€ 5.000
6	Payment 2022-011	€ 5.000-	€ 5.000
--	Balance	€ 1.000-	€ 9.000	€ 8.000

Problems

See table above:

• There is a € 1.000- balance for accounts receivable - It should be € 0
• Revenue is missing € 1.000.

Comprehensive

How these transactions would look like, when done more comprehensively:

#	Description	Accounts receivable	Checking account	Revenue
1	Issueing invoice 2022-006	€ 4.000		€ 4.000
2	Payment 2022-006	€ 4.000-	€ 4.000
3	Invoice 2022-010: Crediting 2022-006	€ 4.000-		€ 4.000-
4	Reverse payment 2022-010	€ 4.000	€ 4.000-
5	Corrected invoice 2022-011	€ 3.000		€ 3.000
6	Payment 2022-011	€ 3.000-	€ 3.000
--	Balance	€ 0	€ 3.000	€ 3.000

What actually went wrong

Different ways to describe the problem:

• Invoicing and payment on line 5 has been conflated
• There is not an issue with revenue or checking amount, but that the customer has payed more than needed - He/she has a credit with us.

Solution

Introduce a new account Overpayment (balance - credit) and book stuff as follows:

#	Description	Accounts receivable	Checking account	Revenue	Overpayment
1	Issue invoice 2022-006	€ 4.000		€ 4.000
2	Payment 2022-006	€ 4.000-	€ 4.000
3	Crediting previous invoice 2022-006			€ 4.000-	€ 4.000
4	Issue corrected invoice 2022-010			€ 3.000	€ 3.000-
5	Issue regular invoice 2022-011	€ 5.000		€ 6.000	€ 1.000-
6	Payment 2022-011	€ 5.000-	€ 5.000
--	Balance	€ 0	€ 9.000	€ 9.000	€ 0