Overpaid fees and students who leave mid-term

What to do with a fee credit balance when a family overpays or a student withdraws: holding credit, crediting lines, refunds and the VAT on credit notes.

By Achekam · 11 October 2026 · 5 min read · For Education businesses in South Africa, Nigeria, Kenya

Two awkward situations land on every finance office sooner or later. A parent pays the same instalment twice, once by transfer and once at the front desk. Or a student withdraws in the middle of a term, the family asks for money back, and the fee invoice on file still shows the full year.

Both leave the institution holding money that may not be its own. Handled casually, they turn into credit balances nobody can explain at year end, refunds made from the bank with no matching entry in the books, and a parent who feels the school kept what it should have returned.

Here is a straightforward way to deal with both, in South Africa, Nigeria or Kenya, and what Achekam does at each step.

Where the extra money sits

When a payment is larger than what the invoice needs, Achekam does not force it onto the wrong document. The invoice is settled, and the surplus is held on the customer's account as a credit.

That credit is not income. It is money you owe back to the payer until it is used or returned. From there you have three honest options:

• Use it. If the same parent has another invoice open, for a sibling or for the next term, re-allocate the receipt so the credit pays that invoice.
• Hold it. If the family has agreed in writing that the surplus should stay for next term, leave it on the account and say so on their next statement.
• Return it. If the family wants the money back, an administrator records the refund against the receipt.

Agree which of the three applies before you do anything. A credit balance that sits untouched for a year with no instruction on file is a question your auditor will ask.

When a student leaves part-way through

Your fee policy decides what a leaving family is entitled to, not your software. Read it first: notice periods, non-refundable deposits and registration fees, and whether the rest of the current term is charged in full. In South Africa, ISASA's note on the Consumer Protection Act and school enrolment contracts explains what the NCC v HeronBridge College ruling means for independent schools' enrolment contracts, notice periods and refunds of deposits.

Once you know what should be credited, correct the original invoice with a credit note. In Achekam a credit note is always issued from the invoice it corrects; there is no free-standing credit note. You can credit the whole invoice or only the lines you choose, and the credit note posts to the ledger and can be downloaded as a PDF or e-mailed to the payer.

Why the way you build invoices matters now

Because credits are made in full or by line, an invoice that lists each term, or each component such as tuition, boarding and transport, is far easier to credit fairly than one with a single line for the year. If a student leaves at the end of the second term, you can credit the third-term line and leave the rest standing. With one line for everything, the conversation becomes a negotiation. When you design next year's invoices, think about how you would credit them.

If the credit note is larger than what is still owed on the invoice, the leftover credit is held for the customer, exactly like an overpayment. You then decide whether to refund it or keep it against a sibling's account.

Cancelling, refunding and writing off

Three tools are easy to confuse, and each has a different purpose:

Two cautions about refunds. First, recording a refund in Achekam does not move any money: you still make the payment from your bank. Second, if the original payment came in online through a payment gateway, the refund is made in that gateway's own dashboard, not sent by Achekam, and a person then records it. Keep the gateway's refund reference with the record.

VAT on the credit note follows the original invoice

Fee rules change, and so do tax rates. Achekam handles the timing problem for you: a credit note uses its original invoice's date and tax codes. If the line you credit carried no VAT on the invoice, it carries none on the credit note; if it carried VAT, the credit reverses it at the same rate, even if the rate has changed since.

This is the right treatment in principle, because the credit corrects a past supply rather than making a new one. The same logic appears in other industries, from crediting a software subscription after a downgrade to crediting an outage that happened in an earlier month.

A leaver's checklist for the finance office

1. Get the leaving date in writing from the person who pays the fees, not only from the student.
2. Check your fee policy: notice, non-refundable amounts and what the current term costs.
3. Open the payer's statement so you see every invoice, receipt and existing credit together.
4. Decide which invoice lines are no longer due and issue a credit note from that invoice for those lines.
5. Look at the resulting balance. If the family still owes, follow it up as normal; write off only what you genuinely cannot recover, and only with approval.
6. If there is credit left over, get the family's instruction: refund, or keep it for a sibling.
7. For a refund, pay it from the right bank account or gateway and record it in Achekam with the reference.
8. E-mail a final statement showing a nil balance, and file the correspondence with the student's record.

Before the next leaver

Overpayments and withdrawals are easier when the groundwork is already there: invoices built line by line, a written refund policy families have seen, and one person who owns credit balances. If you are still setting up how instalments are recorded in the first place, start with fee instalments as part payments on one invoice, then come back to this checklist.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.