How to Handle Overpayments in Cash-Basis Accounting in Cubby Storage
When using cash-basis accounting in Cubby Storage, overpayments can present challenges due to the requirement that all payments must correspond to charges on the tenant’s ledger. This article provides a comprehensive guide to handling overpayments effectively while adhering to accounting rules.
Overview of Overpayment Handling
In cash-basis accounting, payments cannot exceed the total charges on a tenant’s ledger. To accept an overpayment, you must create or adjust charges to match the payment amount. This ensures compliance with accounting principles while allowing you to process the payment.
Steps for Adding Manual Charges
If you receive a payment that exceeds the tenant’s current balance, you can add a manual charge to the ledger to accommodate the overpayment. Follow these steps:
Navigate to the tenant’s profile in Cubby Storage.
Go to the Ledger section and select Add Manual Charge.
Create a charge that matches the overpayment amount (e.g., a future rent charge ).
Post the payment against the total outstanding balance, including the newly added charge.
This method ensures that the overpayment is recorded correctly and does not violate cash-basis accounting rules.
Special Considerations for Cash-Basis Accounting
Future Charges: If you anticipate future charges (e.g., next month’s rent), you can create these charges in advance to accommodate overpayments. This approach is particularly useful for checks or money orders that exceed the current balance. Note that if the payment does not fully cover the added charge, the account will show an outstanding balance until the remaining amount is paid.
Point Charges: For one-time overpayments, you can add a charge equal to the overpayment amount. Once the payment is processed, you can remove the charge from the ledger. Ensure this aligns with your facility’s policies.
By following these guidelines, you can effectively manage overpayments in cash-basis accounting while maintaining compliance with accounting rules and providing a seamless experience for your tenants.