Can I apply overpayment from a previous invoice to a final invoice?

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Can I apply overpayment from a previous invoice to a final invoice?

The original invoice had an amount for work done and a line item for the permit fee that was billed incorrectly and was paid for. We would like to apply the amount to the final invoice which would leave the customer with a small balance. The customer would like us to refund the amount and re-bill for the final invoice.

Asked on June 14, 2012 under Business Law, Arizona

Answers:

William Adams / Adams Legal Group, PLLC

Answered 9 years ago | Contributor

As a business contracts attorney, unless you have a written contract with the customer that specifies the method of payment and the detail of how such accounting and invoicing issues will be handled, then there is no correct "legal" answer to your question.  There may be best practices, personal preferences and customs, but unless you havea  history with that particular customer in handling such issues previously in a given way, there is probably no real precedent to rely upon.  Thus, you are both right in that either way of handling the accounting would be acceptable; however, unless your accountant can articulate some rationale why it must be done the way you suggested, I would suggest to you that the customer is always right and that the good will of the customer should win out, unless you have some rationale otherwise. If you do, then contact the customer and if your rationale is substantially supported, then hopefully they will understand.


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