Shipping creates particular situations that commonly yield overpayments, credits or refunds:
Duplicate or mistaken payments: Same bill paid twice by different desks or via manual bank transfers.
Voyage adjustments: Post-fixture demurrage/dispatch reconciliations or bunker imbalance settlements that require crediting previously billed amounts.
Price disputes: Quantity/quality disagreements, agent fee disputes or exchange rate recalculations.
Bunker over-invoicing / corrections: Partial deliveries, quantity corrections, or index pricing disputes.
Recognising the business root of a credit (commercial vs accounting error) matters: a commercial credit may be applied to future voyages; an accounting overpayment often needs a refund or a vendor credit note recorded in payable ledgers. Authoritative accounting guidance treats overpayments as credit balances that must be either offset, refunded, or held in a suspense account until resolved.
Three standard options exist once an overpayment or credit is identified:
Credit note (credit memo): Supplier issues a credit memo to you (the buyer). The ERP records the credit against the vendor account so it can be used against future invoices or applied to open payables. This is the most common and audit-friendly approach.
Cash refund: The vendor returns funds. Finance records a cash receipt and clears the credit balance. Refunds are necessary when you won’t use the vendor again or when regulations require cash return. NetSuite and other accounting systems advise creating a distinct overpayment account to track unresolved credits until they are applied or refunded.
Journal/suspense treatment: A temporary ledger (overpayment/suspense) holds the amount while investigations continue. This avoids misstating payables and provides an audit trail.
Which option you choose depends on commercial preference, materiality and local la; but your ERP workflow must support all three and make the resolution traceable.
Automation and controls reduce the frequency and cost of overpayments:
Two-way and three-way match automation: Match invoices to POs and GRNs (or voyage receipts). Duplicate invoices or mismatched quantities are flagged before payment. Many ERPs and AP automation tools offer duplicate detection and smart matching - a proven defence against overpayments.
Centralised payment flows + netting: Centralise payments in treasury and adopt cross-company netting to prevent internal duplicate payments. Central payment files (instead of decentralised bank transfers) reduce human mistakes. Guides on ERP→bank integration emphasise the benefit of centralised execution for AP control.
Real-time alerts & small-value thresholds: Flag vendor account credits above a threshold for review and automate auto-apply for trivial amounts to speed closure while protecting larger sums for human review.
Proactive monitoring reduces the need for refunds and credit-note churn.
A Voyage Management System (VMS) like Marlo is rarely the system of record for statutory payables; that’s the ERP. A good integration must therefore:
Sync vendor credit notes as first-class entities. When a vendor issues a credit note, the VMS should accept the credit ID and reconciliation amount from the ERP so the voyage-level finance view reflects the corrected position. Many accounting platforms (Xero, QuickBooks, Odoo) support credit notes as distinct documents and APIs exist to sync them.
Tag credits to voyage line items. If a credit relates to bunker overcharge on Voyage #123, capture that mapping so P&L and voyage reconciliation show the true economics without manual journal hunting.
Preserve audit trails & references. Sync original invoice numbers, bank trace IDs, correction reasons and approval notes. This makes recovery, chargeback and audit processes far faster. QuickBooks/Xero integration best practices call for passing payment & credit references in API payloads to keep ledgers reconciled.
Example: when a bunker supplier issues a credit note for a quantity correction, the ERP creates the credit note and posts a vendor credit. The integration should pull that credit into the VMS, apply it to the voyage bunker line, and mark the AP item resolved; all without manual entry.
To prevent friction and audit headaches, design these patterns into your VMS→ERP flow:
“Candidate credit” inbox: A queue where finance sees incoming credits/refunds suggested by the ERP with AI-assisted matching to voyage invoices. Provide confidence scores for the match.
Apply / Refund / Hold buttons: Each credit should allow a one-click action: apply to open an invoice, request a vendor refund (trigger email + bank instruction), or hold in suspense with a required reason. Record who approved and when.
Auto-apply rules: Small credits (e.g., < $50) auto-apply to the oldest outstanding invoice unless explicitly blocked. Larger credits require two approvals.
Reconciliation assistant: Surface probable duplicate payments and suggest vendor credit or refund actions; support auto-journal entries to move amounts from suspense to AP when cleared.
Legal & commercial notes field: Store clauses (e.g., “demurrage disputed - credit agreed subject to SI”) and attach supporting documents (email, signed agreement) to the credit note record.
These UI patterns reduce manual touchpoints and keep the commercial story next to the accounting entry.
Refunds are more frictional than credits because cash moves:
Require bank reference in refund workflow: Store inbound/outbound bank reference numbers (SWIFT/UTR) and reconcile automatically. Many ERPs support attaching payment references; integrations should preserve them.
GST/VAT implications: in some jurisdictions refunds require VAT adjustments; ensure tax codes are set correctly when the refund is recorded.
Customer/vendor communication: standardise refund SLA (e.g., supplier to refund within 14 days) and embed templated communications triggered from the VMS.
Maritime commercial law can complicate overpayment recovery:
Charterparty disputes and time limits: claims tied to voyage performance (e.g., demurrage) may carry strict submission timelines; delay in issuing credit notes can extinguish rights. Keep credit note workflows aligned with commercial claim timelines. Case law shows time-barred claims can be rejected if not properly documented.
Constructive trusts & unjust enrichment: some jurisdictions restrict recovery of payments made in mistake; seek legal advice in contested recoveries. Ship-specific insurers and P&I clubs often publish guidance on recovering overpayments; involve them early.
Track these metrics to ensure the credit/refund workflow is healthy:
Days to apply credit (time from vendor credit issuance to ledger application).
Days to refund (time from the agreed refund date to the cash receipt).
Overpayment incidents per month (trend downwards).
Value held in suspense accounts (should decline as rules/automation improve).
Percentage of credit notes auto-matched (aim high - reduces manual work).
Week 1–2: Baseline- measure current overpayments, suspense balances, and frequent vendors.
Week 3–6: Add control rules: duplicate detection, PO/invoice matching and auto-apply thresholds.
Week 7–10: Build the VMS credit-note inbox + API mapping to ERP credit note objects.
Week 11–12: Pilot with one vendor type (e.g., bunkers) and tune auto-apply rules.
Month 4+: Roll out across vendors, publish SLA templates and train ops & finance.
Overpayments and vendor credits are inevitable in complex voyage finance. The difference between operational drag and smooth recovery is visibility and process: capture the credit as a first-class object, map it to voyage economics, and give finance simple, auditable actions (apply / refund/hold). Done right, this reduces cash leakage, speeds reconciliation and keeps commercial relationships intact.