USA Writing off A/R Credits

[HereIGo]

Just started with a company that has credits in customer accounts to from 2010-2015

What are the rules for how to handle these overpayments. Am I required to get it back to customer or can I write it off. Credits are anywhere for $5-$1000.

Thanks!

 

[AGH the CPA]

If you're in the US, you'll need to return the $ to the customer. If the customer no longer exists (company out of business) or you are unable to find them, the next step is to check your states escheat laws. Most require that you submit the money to them.

 

[HereIGo]

Thank you for the response. Is there a minimum $ amount? I can see the larger balances but would like to write off smaller ones.

 

[AGH the CPA]

Thats governed by the laws of your particular state.

https://www.credittoday.net/public/Escheatment-What-are-you-obligated-to-report-to-the-state.cfm

 

[HereIGo]

Thats governed by the laws of your particular state.

https://www.credittoday.net/public/Escheatment-What-are-you-obligated-to-report-to-the-state.cfm

Thank you...a very good article

 

[JR.]

Should be able to write off minimum balances. $5 and under.

I would start by contacting the customer and asking if they want a refund or they might decline and then you can write it off.

Send a letter in the mail with two options : refund is owed to me , send refun (w-9) might be required ; or, refund is not owed to me , write off

Send this letter twice and keep dates.

This will clear some balances. Lastly, escheat the funds to the state in which the customer does business.