How to correct a payment error
This support article covers how to correct payment errors, including in these four scenarios:
- 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 the purchase amount that was entered being incorrect)
- Scenario 4: The Supplier / Payee was underpaid/overpaid (caused by human error when setting up the payment)
Note: if you have underpaid a supplier/payee and then subsequently made an additional payment to correct the error - when reconciling transactions, ExpensePlus won't allow you to reconcile two outgoing bank transactions that have different dates on the left-hand table of the match transactions screen with payment(s) on the right-hand table as this would result in a match spanning multiple dates. If this has occurred, then you need to read the guidance in scenario 4 below.
Scenario 1: The payment was made out of the wrong bank account
It's firstly worth pointing out that in fund accounting, it isn't actually important which bank account payment is made from. I.E. if a £10 expenditure is recorded to an expenditure category within your 'Foodbank Fund', the foodbank fund balance will correctly reduce by £10 regardless of from which bank account the money is paid out. 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.
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.
Top Tip: If the payment isn't on the right-hand table (because it was marked as paid from a different bank account), then go to the Match Transactions screen for the bank account it was marked as paid from. Then select the Edit button to the right of the payment, to move it to the Match Transactions screen for the bank account from which the payment was paid - click here for more details.
Note: If you do decide that you do still wish to move money between accounts, then you can of course do this. Once the bank statement transactions for both accounts have been uploaded, within the match transactions screen for either account, select the bank transaction on the left-hand table, click the + button, and select the transfer between bank accounts option - click here for more details.
Scenario 2: The payment was made to the wrong account, and the money was returned
Where this happens, you should go ahead and 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 outgoing bank transaction (to the wrong bank account),
- An incoming repayment bank transaction (from the money being returned - assuming it comes back into your account), and
- A subsequent outgoing transaction (as the payment is made again, this time to the correct bank account).
This help-guide article covers how to reconcile the initial outgoing bank transaction along with the incoming repayment. The subsequent outgoing payment should then be reconciled against payment on the right-hand table of the match transactions screen.
Note: 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 the purchase amount that was entered being incorrect)
Firstly, reconcile the outgoing payment within the match transaction screen in the usual way (by selecting the transaction on the left-hand table, and when it matches to the corresponding payment on the right-hand table, click confirm).
Then:
- If the supplier / payee was underpaid - you will need to add another purchase for the amount still owed (uploading the same receipt/invoice as the original purchase), and then process and match this subsequent payment in the usual way.
- If the supplier / payee was overpaid - you should request they pay the money back. Then, when the incoming amount appears on your uploaded bank statement, you should reconcile this by selecting the transaction in the left-hand table, clicking the + button, then selecting the 'supplier refund' (for suppliers) or 'expense repayment' option (for payees), which will create a negative expenditure transaction.
- If the supplier / payee was overpaid - but instead of repaying the money, they suggest deducting it from the next payment you make to them. When this happens, within the purchases screen enter an invoice to pay (supplier) or expense claim (payee) but with a negative value (for the amount to be deducted from the future payment). Once this has been marked as approved, this should remain 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)
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'.
- When the payment is a single 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, simply follow the instructions in scenario 3 above.
- Where the payment is either 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 to the right of the payment, then select the Unmark payment as set up option to send it back to the payments screen.
Note: you need to un-select transactions for the edit button to show to the right of the payment
(2) You then need to 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 +ve or -ve value).
(3) Once the payment amount matches what was actually paid, mark the payment as paid and once back on the match transactions screen, you will then be able to match the payment. Then follow the instructions in scenario 3 above that covers how to deal with the under/overpayment.
To better understand the Bank Reconciliation module, please view the module overview video here.