Internal refunds are used when you need to refund you customer who has paid you too much money at the time you are closing an order, and you need to refund your customer with a company check at a later date, either with through your third party accounting software or with a hand written check.
Internal refunds should never be used for payments on open orders or payments on account. They should only be used during the closing of an order and only if your intention is to close the order and refund the customer with a check at a later date.
Setup
You will need to create a general ledger liability account (referred to as an "Other Current Liability" in QuickBooks) in your third party accounting software. Name this account "Internal Refunds" or some name that reflects the fact that you owe the customer money. This General Ledger account will also need to be set up in FocalPoint (9 from the main menu), identical to the account in your accounting software.
You will need to set up a posting code (2-C from the main menu) also named "Internal Refunds" or other appropriate name. The Main Account in this posting code will be the Internal Refunds general ledger account that you set up in your accounting software.
Finally, you will need to assign this posting code to the Internal Refunds payment type (3-7 from the main menu).
Usage
When you are closing the order, refund the balance you owe the customer with a negative payment amount using the Internal Refunds payment type.
An entry will be made in the internal Refunds file (A-3 from the main menu) so that you can track these obligations to your customers. You may use this function to record when you paid your customer, and also record a check number.
When you write the check out using accounting software, you will be prompted for the account to offset the fact that you are reducing your cash. Choose the internal refunds account.
Note - when you export your financial information out of FocalPoint, the deposit liability account in your accounting software will be credited, and when you write out the check, the account will be debited. If you ever see a credit balance in this account in your accounting software, this indicates that you have some checks to write out to your customers. you should go into the internal checks function in FocalPoint to see what checks need to be written out. if you ever see a debit balance in this account, this would imply that you've written out too many checks to your customers, and further research into this matter is needed.
