How to correct a payment error
This article explains how to make corrections using ExpensePlus when you have made a amistake with your payments. There are several ways errors can occur, as described below in the different scenarios.
In this article:
- Scenario 1: the payment was made out of the wrong bank account
- Scenario 2: the payment was made to the wrong account, and the money was returned
- Scenario 3: the supplier / payee was under/overpaid (caused by an incorrect purchase amount)
- Scenario 4: the supplier / payee was underpaid/overpaid (caused by human error when setting up the payment)
- Scenario 5: an expense payment has the wrong grouping of purchases
Scenario 1: the payment was made out of the wrong bank account
Issue
In fund accounting, it isn't actually important which bank account a payment is made from.
For example, if a £10 expenditure is recorded to an expenditure category within your 'Foodbank Fund', the foodbank fund balance will correctly reduce by £10 regardless which bank account the money is paid out from. It's a common accounting misconception among churches and charities that they need to:
- a) have a separate bank account for each restricted or designated fund and
- b) have to try and keep the bank balances of such bank accounts aligned with the already correct fund balances within your financial reports (you don't!)
For further information, click here.
Solution
When bank matching the outgoing bank transaction to the payee/supplier, within the Match Transactions screen, you should match this in the usual way; select the transaction on the left-hand table, and when it matches to the corresponding payment on the right-hand table, click confirm.
If the payment isn't on the right-hand table of the match transactions screen because it was marked as paid from a different bank account, see this helpguide article on how to move the payment to the correct bank account.
If you do decide to move money between bank accounts, this is optional, though not necessary. See this for guidance on how to record a transfer between bank accounts in ExpensePlus.
Scenario 2: the payment was made to the wrong account, and the money was returned
Issue
If the payment was made to the wrong bank account, and the money was returned, you should make the payment again to the correct bank account (without processing this via the expenses and payments process).
As a result of this scenario, you are likely to have 3 transactions:
- An initial paid out bank transaction (to the wrong bank account),
- A paid in transaction (the repayment from the money being returned - assuming it comes back into your account), and
- Another paid out transaction (as the payment is made again, this time to the correct bank account).
Solution
This help-guide article covers how to reconcile the initial paid out bank transaction along with the paid in transaction which is the repayment.
The second paid out transaction (to the correct bank account) should then be reconciled against payment on the right-hand table of the match transactions screen.
If the supplier bank details or payee bank details are incorrect within ExpensePlus, then you should update these.
Scenario 3: the supplier / payee was under / overpaid (caused by an incorrect purchase amount)
Solution
If the supplier / payee was underpaid or overpaid, caused by an incorrect purchase amount, in the match transaction screen, reconcile the paid out transaction with the corresponding payment in the right-hand table.
If the supplier / payee was underpaid
You will need to add another purchase for the amount you still owe and pay this through the usual ExpensePlus payment process. You can then match this transaction as usual on the match transactions screen.
You can upload the same receipt/invoice as the original purchase.
If the supplier / payee was overpaid - and they repay you the overpayment
You should request they pay the money that was overpaid back to your bank account.
When the incoming amount appears on your match transactions screen, you should reconcile this as a 'supplier refund' (for suppliers) or 'expense repayment' (for payees).
You can do this by selecting the transaction in the left-hand table, clicking the + button, then selecting the relevant option from the drop-down menu for transaction types.
This will create a negative expenditure transaction.
If the supplier / payee was overpaid - and they request a credit note
If the supplier / payee was overpaid, but instead of repaying the money, they suggest that you deduct it from the next payment you make to them, you can record this in ExpensePlus.
Within the purchases screen, enter an invoice to pay (for a supplier) or expense claim (for a payee), but with a negative value. This should be the amount to be deducted from the future payment.
Once this has been marked as approved, keep this purchase on your payments screen to offset against a future invoice/expense claim to that supplier/payee (reducing the amount they are paid).
Scenario 4: the supplier / payee was underpaid/overpaid (caused by human error when setting up the payment)
Solution
On the Match Transactions screen, select the bank transaction on the left-hand table, and the payment on the right-hand table, and click 'confirm'.
Single fund/category allocation
When the payment is an expense recorded against a single fund/category, ExpensePlus will automatically update the expenditure amount of the payment to be the same as the bank statement amount. Then follow the instructions in Scenario 3 above to pay the remaining amount or record the overpayment.
Multiple fund/category allocation
Where the payment is made up of a purchase recorded against multiple categories or multiple purchases, ExpensePlus isn't able to automatically update the payment amount as described above.
Instead, you will need to:
1) Select the 'edit button' (pencil icon) to the right of the payment
2) Select the 'Unmark payment as set up' option to send the payment back to the payments screen.
You need to un-select transactions for the edit button to show to the right of the payment.
3) Then update one of the purchases that is part of the payment to make the payment amount match the amount that was actually paid.
Typically this is done by adding an additional budget line of either positive or negative value.
4) Once the payment amount matches what was actually paid, mark the payment as paid again.
On the match transactions screen, you will then be able to match the payment. Then follow the instructions in Scenario 3 above to pay the remaining amount or record the overpayment.
If you 'Unmark a payment as set up' and there are other expenses waiting to be paid on the payments screen, the first payment might be 'grouped' with these purchases.
Once you have corrected the amount of the relevant purchase, to mark the correct purchases as paid again you should:
- click the tick to the right of the payment group (even if there are more purchases in this payment group and so the total does NOT match the amount already paid)
- in the pop-up that appears, untick the purchases that are yet to be paid
- check that the total matches the amount that was actually paid
- click confirm and authorise this payment if needed (as it has already been paid). Don't tick to send a payment notification as this will have already been sent.
Scenario 5: an expense payment has the wrong grouping of purchases
Issue
An expense payment that is made up of multiple purchases can have the wrong grouping of purchases if the payment process was not followed correctly.
Solution
To correct the grouping of purchases so that the payment total matches the actual amount paid:
1) On the Match Transactions screen, select the 'edit' button (pencil icon) to the right of the payment.
2) Select the 'Unmark payment as set up' option to send it back to the payments screen.
3) If multiple payments are concerned and need to be regrouped, repeat step 1 and 2 for each.
4) On the payments screen, click the tick to the right of the payment group. There are likely to be more purchases in this payment group and so the total does NOT match the amount already paid.
5) In the pop-up that appears, untick all purchases and then tick just those purchases that make up the correct total for the amount that was actually paid.
6) Click confirm and authorise this payment if needed (as it has already been paid). Don't tick to send a payment notification as this will have already been sent.
7) Repeat steps 4 and 5 if there are multiple payments that were wrongly grouped.
8) On the Match Transactions screen, reconcile the transactions that should now have the correct amounts.
To better understand the Bank Reconciliation module, please view the module overview video here.