Accounts receivable debtor refunds
Quite often, a client may request additional money be added to the contract price of a project so the money is paid by the bank via the set claim stages and can then be refunded directly to the client on completion of the project. This money “refunded” to the client can be used on landscaping, curtains or whatever without taking out a separate personal loan. This scenario is great for the client can be difficult for the builder to balance on his books and still show a correct ‘actual’ profit figure on the ‘Project Profit Summary’. Another scenario this can be used for is when a dispute has occurred at the end of a project after allowing money has been paid and the builder agrees to refund the debtor part of the contract price as a settlement of the dispute. The contract price needs to reflect the refund as does the project profit summary.