How to Refund a Prepayment

If you simply entered a Prepayment to the wrong Owner and need to change it.

There are several ways to refund Prepayment balances.

How to refund a Prepayment Method 1

If a check is to be printed for the prepay balance to the investor.

Make sure you remove the prepay balance since you are refunding the remaining balance of prepay funds on a well. This can be done by going to DOI, click on 'View/Adjust JIB values'.

Add the owner in the Vendor file. Add an Invoice in the Accounts Payable programs for the amount of prepay to be refunded. Accounts Payable; general ledger 21000 will be automatically credited for adding an invoice. You will debit the prepay general ledger you originally used when you received the prepay funds, normally 21015. When you pay the Vendor’s check, general ledger 21000 will be debited and cash will be credited. See GL Number Restrictions.

If the prepay balance is to be applied against outstanding Accounts Receivable invoices. Remove the prepay balance from the DOI file, click on the View/Adjust JIB values button. Print the Accounts Receivable Inquiry report to determine which invoices can be paid. Enter a JEC payment application to Accounts Receivable invoices using the remaining prepay funds. An automatic credit to general ledger 11300, Accounts Receivable will be made in the transaction file. You will debit the prepay general ledger you originally used when entering the prepay, normally 21015. The prepay report should agree with your prepay general ledger on the trial balance at all times.

If the investor has no outstanding Accounts Receivable invoices and you wish to refund prepay by creating a credit Accounts Receivable invoice to be used against future expense in Operating Statements or refund the Accounts Receivable credit amount. Remove the prepay balance from the DOI file, click on the View/Adjust JIB values button. Add an Accounts Receivable invoice for the owner in the Accounts Receivable programs. The invoice number must end in a “C” to be a credit invoice. When entering a credit invoice the debit and credit posted to the Transaction file is normally just reverse of a standard Accounts Receivable invoice. See How to Use a Credit AR Invoice for more info.

Example: JIB 15000C. An Accounts Receivable credit invoice will automatically credit general ledger 11300 and you should debit the original prepay account general ledger number used when prepay was received (normally general ledger 21015). If you netout in the Operating Statements, the balance of the credit Accounts Receivable invoice will be a credit prior balance brought forward on the Operating Statement.

Alternate Method 2 for Refunding Prepayment

You can use the Quick Check function. When creating a Quick Check you will Credit your bank G/L number and when asked for an Expense account, you will use the original G/L number you used when you added the Prepay. Then follow along entering in the requested fields until you come to the amount. Here you will put the Prepay amount you want to refund. After printing the check you will be asked ‘Save to Transaction File’ and you should say Yes. This will make the required entry to your Transaction file (General Ledger). After you complete the Quick Check you will need to go to the DOI File and find this person on the corresponding unit and manually Edit the ‘Prepay Balance’ box under the 'View/Adjust JIB values" button.

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