Customer Payments & Credits

The Payments & Credits tab on the Customer Form gives you a consolidated view of every payment a customer has made and every credit that has been applied to their account. Understanding this tab is essential for managing accounts receivable, resolving billing questions, and ensuring that customer balances are accurate. This article explains both sections of the tab in detail, describes how payments and credits are created, and outlines common workflows for day-to-day use.

Accessing the Payments & Credits Tab

To view a customer's payments and credits:

1. Open the Customer Form by navigating to Customers in the main menu and selecting the desired customer.
2. Click the Payments & Credits tab at the top of the form.
3. The tab loads and displays two distinct sections: Payments (top) and Credits on Account (bottom).

Section 1: Payments

The top section of the tab is dedicated to the customer's payment history. It contains a data grid listing every payment recorded against this customer's invoices, along with a summary total at the bottom of the section.

Payment Grid Columns

The Payments grid displays the following columns:

Each row in the grid represents a single payment transaction. If a customer made multiple payments toward the same invoice (for example, a partial payment followed by a final payment), each payment appears as a separate row with the same invoice number in the Related Invoice column.

Total Payments Summary

Below the Payments grid you will see a Total Payments line that shows the sum of all payment amounts listed in the grid. This figure represents the total dollar amount the customer has paid across all invoices over the lifetime of their account. It provides a quick reference for understanding the overall payment volume for the customer.

Section 2: Credits on Account

The bottom section of the tab displays any credits that are currently available on the customer's account. Credits represent money that the customer has available to apply toward future invoices, reducing the amount they owe.

What Are Credits?

Credits are positive balances on a customer's account that can be used to offset future charges. They arise from several situations:

• Overpayments — If a customer pays more than the invoice total, the excess amount is automatically recorded as a credit on their account. For example, if an invoice totals $95.00 and the customer pays $100.00, a $5.00 credit is created.
• Returns and Refunds — When a customer returns merchandise and instead of issuing a cash refund, the business applies a credit to the customer's account for future use.
• Manual Adjustments — An authorized user can manually create a credit on a customer's account. This is often done as a goodwill gesture, to correct a billing error, or to honor a promotional discount that was missed on a previous transaction.

Credits on Account Total

At the bottom of the credits section, you will see the Credits on Account total. This figure represents the current credit balance available to the customer. If the total is $0.00, the customer has no credits to apply. A positive value indicates that the customer has funds available that can be applied to reduce the balance on a future invoice.

How Payments Are Recorded

Payments are typically recorded through the invoice payment workflow rather than directly on the Payments & Credits tab. Here is the standard process:

1. Open the invoice that the customer is paying (either from the Invoices tab on the Customer Form or from the main Invoice area).
2. On the Invoice Form, use the payment recording feature to enter the payment amount, select the payment method, and optionally enter a reference number.
3. Save the payment. The invoice's paid amount updates and the balance decreases accordingly.
4. The payment automatically appears on the Payments & Credits tab of the Customer Form.

This approach ensures that every payment is tied to a specific invoice, maintaining a clear audit trail. The Payments & Credits tab serves as a read-only summary of all these transactions in one convenient location.

How Credits Are Created

Credits can be created in several ways:

Automatic Credit from Overpayment

When a payment exceeds the remaining balance on an invoice, AccuArk automatically calculates the difference and creates a credit on the customer's account. No manual intervention is required — the system handles it during the payment recording process.

Credit from a Return

When processing a return, you have the option to issue the refund as a credit on the customer's account rather than returning cash or processing a card refund. This is useful for retaining the funds within the business while still honoring the customer's return.

Manual Credit Adjustment

Authorized users can create manual credits when needed. Common scenarios include:

• Correcting a pricing error on a previous invoice
• Applying a promotional discount after the fact
• Offering a goodwill credit to resolve a customer complaint
• Transferring a balance from one customer account to another

Applying Credits to Invoices

When a customer has credits on their account and a new invoice is created, the available credit can be applied to reduce the amount owed. Here is how it works:

1. Create a new invoice for the customer (either from the Invoices tab or from the main Invoice area).
2. During the payment process, AccuArk checks whether the customer has any available credits.
3. If credits are available, you can choose to apply some or all of the credit toward the invoice balance.
4. The credit is deducted from the customer's credit balance and applied as a payment on the invoice.
5. The remaining invoice balance (if any) can then be collected through a standard payment method.

For example, if a customer has a $25.00 credit and their new invoice totals $80.00, applying the full credit reduces the amount owed to $55.00. The $25.00 credit disappears from the Credits on Account total and appears as a payment on the invoice.

Understanding the Relationship Between Payments, Credits, and Invoices

It is helpful to think of the flow as follows:

• Invoices create the obligation — the customer owes money.
• Payments satisfy the obligation — the customer pays money.
• Credits are a stored value — they sit on the account until applied to a future invoice.

The Payments & Credits tab brings the payment and credit sides together in one view, while the Invoices tab shows the obligation side. Together, these two tabs give you a complete picture of the customer's financial relationship with your business.

Common Workflows

Verifying a Customer's Payment

1. Open the customer record and go to the Payments & Credits tab.
2. Look in the Payments grid for the payment date and amount in question.
3. Check the Reference Number column to match the customer's receipt or bank statement entry.
4. Note the Related Invoice column to confirm which invoice the payment was applied to.

Checking Available Credits

1. Open the customer record and go to the Payments & Credits tab.
2. Look at the Credits on Account total at the bottom of the tab.
3. If the customer has a credit balance, it will be displayed as a positive dollar amount.

Reconciling a Customer's Account

1. Review the Invoices tab to see the total outstanding balance across all open invoices.
2. Switch to the Payments & Credits tab to see the total payments and any available credits.
3. Compare the figures to ensure that the customer's records match your internal accounting.

Tips and Best Practices

• Always record payments through invoices — This ensures every payment is linked to a specific invoice, maintaining a clean audit trail. Avoid creating free-standing payments that are not tied to an invoice.
• Review credits regularly — Customers may forget they have credits on account. During routine account reviews, check for outstanding credits and remind the customer that they can be applied to future purchases.
• Use reference numbers consistently — When recording payments, always enter a reference number (check number, transaction ID, or confirmation code). This makes it much easier to trace payments later during reconciliation.
• Monitor overpayments — If a customer frequently overpays, it may indicate confusion about invoice amounts. Proactively address this to avoid accumulating large credit balances.

What to Read Next

• Customer Invoice History — View and manage all invoices for a customer
• Customer Loyalty Program — Understand loyalty points, redemption, and enrollment