Processing a Refund in Lot Installments in HomeBuilder –
A Quick Guide to Handling Refunds –
Processing refunds against lot installments in a home builder system is an uncommon but sometimes necessary task. While deposits are typically retained once made, there are situations where agreements are reached to return money to home buyers.
This guide walks you through the complete process of handling such refunds within HomeBuilder.
How to Process Refunds for Lot Installments in Home Builder
Prerequisites: Setting Up Installment Statuses
Before you can process a refund, ensure you have the proper setup in place:
- Navigate to Installment Statuses in your system
- Verify you have a record that:
- Allows posting against a cash receipt journal
- Permits negative amounts
- If this record doesn’t exist, create one with these specifications
- You can name this status whatever you prefer (the example uses “refund”)
Step-by-Step Refund Process
1. Locate the Lot and Review Deposits
- Navigate to the specific lot you need to refund (e.g., Lot #4 for Customer #3)
- Review the deposit summary to confirm the total amount
- Check the lot installments details to see all posted installments that need to be reversed
2. Create the Refund Entry
When creating your refund installment:
- Date: Use today’s date
- Name: Provide a descriptive name (this will appear on the remittance)
- Stage Number: Enter any number between 1-50 (mandatory field, use a high number to make it stand out)
- Amount: Enter the total deposit amount as a negative value
- Status: Set to your refund status code
3. Process Through Cash Receipts Journal
- Click Actions → Other → Add to Cash Receipts Journal
- Enter today’s date
- Navigate to the created cash receipt journal entry
4. Modify the Journal Entry
Important modifications needed:
- Clear out any unnecessary top records
- Change the document type to blank (cash receipt journals have restrictions)
- Instead of posting directly to the bank account, select the customer account
- This creates a negative receivable that can be paid via check or EFT/ACH
5. Post the Transaction
After posting the journal entry:
- The lot deposits will return to zero
- All installments will show as reversed
- The system is now “clean” regarding installments
6. Issue Payment to Customer
The final step involves creating the actual payment:
- Open the Payment Journal
- Set document type to “refund”
- Select the customer
- Apply the payment to the refund entry created earlier
- Set the applies-to ID (same process as vendor payments)
- Choose your payment method (computer check, EFT, etc.)
- Print the check or process the electronic payment
- Post the transaction to complete the process
Key Points to Remember
- This process treats the cash receipt journal as a general journal due to system restrictions
- The refund creates a negative receivable that must be paid separately
- Payment processing follows the same workflow as vendor payments
- All original installments are properly reversed in the system
- The customer receives their refund via your standard payment methods
Conclusion
While refunding lot installments is unusual, this systematic approach ensures proper accounting treatment and maintains clean records in your home builder system. The process effectively reverses the original deposits and creates a proper payment trail for the refund.
Find more information on Lot Installments in HomeBuilder within our Knowledge Base.
HomeBuilder by Suite Engine
HomeBuilder is a comprehensive software solution designed specifically for residential production builders. Developed by Suite Engine, it integrates seamlessly with Microsoft Dynamics 365 Business Central to provide modern and secure construction management capabilities.
Key Features of HomeBuilder:
- Phase, Model, and Lot Management:
- Efficiently manage construction phases, models, and lots.
- Track vendor contracts and control budgets directly from the system.
- Budget Control and Reporting:
- Monitor budget to actual reporting.
- Manage model and lot pricing, as well as installment payments.
- Purchaser and Contact Management:
- Handle lot closing dates and sales status.
- Automate closing adjustments.
- Décor Center:
- Pre-determined color chart selections with visual aids.
- Invoice purchasers or include selections in closing adjustments.
- Warranty and Inspections:
- Create service issues and work orders for trades.
- Track work order progress and generate reports.
- Integration and Automation:
- Fully integrated reporting and financials.
- Natively integrates with the Microsoft stack, such as Power Automate, Power BI, and more.
Benefits of Using HomeBuilder:
- Enhanced Financial Visibility: Provides detailed financial reporting and control over costs.
- Improved Efficiency: Streamlines processes and keeps operations organized.
- Mobile Accessibility: Accessible on PC, tablet, or phone, allowing for flexibility and remote management.
- Customer and Vendor Satisfaction: Offers portals for contractors and home buyers to access relevant data, improving communication and satisfaction.
HomeBuilder is designed for residential builders who construct 30-150 units per build cycle, making it suitable for townhouses and condominiums. By automating and streamlining day-to-day operations, HomeBuilder helps residential developers manage their businesses more effectively and professionally.
HomeBuilder is Modern and Secure Software for Production Builders | Built within Microsoft Dynamics 365 Business Central
- Learn more about HomeBuilder.
- Get the App on Microsoft AppSource today, or request a personalized demo!
- Get going in no time with our HomeBuilder ‘How-To’ videos
