Approximately two years ago, a client paid £20k twice for one invoice.
Since then we have phoned and emailed telling them (numerous times) the details of this overpayment. At first we were simply asking them how they want to be repaid as we do not work for them that often , then it became apparent they could not find this duplicate transaction. It has been very difficult to get anyone to respond to us on this.
However, recently, we finally did get a response from them saying there has been no overpayment and it must be an error our end.
The company in question is huge (£600m turnover) so perhaps its understandable that they can lose £20k..! Question is, what do we do now? I am tempted to just write it off as exceptional income otherwise it will just stay on the balance sheet indefinitely.
Replies (21)
Please login or register to join the discussion.
The accounting treatment follows the legal position i.e. when, if ever, the money belongs to you.
That is why everyone is telling you it is a legal question. When you have got a legal opinion I imagine the accounting treatment to adopt will become obvious.
Prescriptive period, surely, you have told them about transaction, asked how you repay them, they have stated not due. so wait whatever time required then credit to income (do consider vat at that juncture?)
Meantime, carry in creditors.
We have picked up a few of these over the years, though much smaller amounts, e.g. old returned deposit cheques not cashed etc from when we did cheques, no response by e mail from former tenants.
As intimated by IanMcTernan , its entirely possible the powers that be in this company don't know anything about this overpayment. The department responsible for these payments may be reluctant to acknowledge this mistake if indeed it is a mistake at their end. Have you tried contacting their MD or FD regarding this issue? It might be worth a try before getting legal advice.
It may be that the payment is correct against an invoice that they entered twice into their system.
As others have said, a legal opinion is really required and then the accounting treatment will follow.
If we cant track them down or if they wont accept an error we normally write to them informing them that if unclaimed in a set period we will donate it to charity.
That said, I'm not sure I'd do that with £20k. Not because it's an amount worth keeping (it is, of course) but rather because I wouldn't want to give it away and then have them come back and say they wanted it after all!
For something this size it's got to be worth getting a proper legal opinion. I'd be happy to obtain one on your behalf for £19,999.95.....................
just circularise them - as to balance at given month and d th accounting based on reconiling signed responses with ledger
The main thing to remember in these cases that this is NOT your money and therefore you have no right over it.
Those of you familiar with AML regulations will know that by acquiring this money without using proper legal procedures could be regarded as part of a money laundering arrangement, so it is essential that legal advice be taken.
To be fair, the OP is trying to get shot of the money - without much co-operation from the owner.
Surely the practical option is to put the money into a nominated, interest bearing account. Just like we would do with clients' money.
Once that's done, you can forget it until the creditor gets round to asking for it.
As already stated I would write to the MD stating the dates that your received both sums of money so looking back it is easy for them to find.
It is worrying how they have managed to get their bank reconciliation to balance though
Once the funds are legally abandoned then if your conscience is pricking you then, especially at this time of year, do consider donating the funds to the SSPCA.
The Scottish Society for the Prevention of Cruelty to Accountants does stellar work assisting Accountants pick up the pieces of their shattered lives following the January deadline, it assists rebuilding their relationship with their families and helps to enable children to recognise their long lost parents. With the support of the SSPCA the blight of January does not need to break marriages, relationships and sanity.
The SSPCA's work encompasses counselling, sending needy accountants on holiday to Legoland (to count the bricks), it even provides therapy sessions so that traumatised accountants once again are capable of having conversations with clients who are so thick talking with a plank of wood would be preferable.
Please give generously.
Me I would leave it on the balance sheet. After 6 years if it had not been claimed I would credit it to sales.
You don’t want to pay the VAT & CT from the £20k ‘sale’ ... leave it on the BS and be happy you’ve had the cash to use!
similar issue, smaller amount...
we had a very large company who paid our invoice of about £1500 twice, in error. about 2 months later they realised and requested a refund - which was duly done within a few days. then about 3 months later (after a system update) they contacted us to request what our remit of £1500 was for as they had no account for us, etc. if no response from us they would refund the payment to us !!!!
i would have to go all through the scenario about their over-payment all over again....which would be bounced between several departments etc. and round it all goes again - last time i heard from them, was about 6-7 weeks ago......I'm expecting another deluge of emails about it them in approx 2 weeks. I've just saved all the emails as a template and resend them. i suspect they actually processed our invoice twice - that's why they can never find any duplicate payment in error.