how do I refund unallocated cash from a customer?

a customer has paid me twice for the same invoice (obviously he needs a beeter accounting system lol) and now he has asked for the second payment to be returned to him. The first payment was allocated to the sales invoice and the second is still on his account as unallocated cash. How do I process this back to him? I cannot use REFUND through BANK/MONEYOUT as this would create a debit posting to my nominal ledger.
I don't want to delete the cash and reinput it to a suspense a/c and repay it from there as I would like to have the tracability of it being on his sales ledger account. The only way I can think of doing it is to create a sales invoice with the nominal code BANK and exclude it from my VAT return and then allocate 2nd payment received to it, but that feels so wrong there must be a better way!

Hi Rachael,

In this case, I would suggest creating a dummy invoice for the amount of unallocated cash, so you would create an invoice as usual, by going into Sales > Invoices > Create Invoice > Select the same entity and account code with the unallocated cash amount. After this, go into Money > Unallocated Cash > Click on the green allocate cash button to allocate against the invoice created. This will cancel out the overpayment.

With regards to the refund, you will have to copy the invoice you created and change the price to a negative and click save. After this, you can quick pay it off whenever you have refunded the customer.

I hope this has been helpful!

Thanks, Tommy

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