There may be occasions where a client has paid a deposit towards one policy, but that money needs to be used against a different policy instead.

Where the original payment was recorded and reconciled through Digit, it is not necessary to refund the client and request a new payment. Instead, the funds can be transferred internally using Digit's accounting functionality, maintaining a complete audit trail and avoiding unnecessary bank transactions.

This process should only be used where the money legitimately belongs to the same client and is being reallocated between their policies.

Benefits of transferring the deposit

Transferring the funds internally:

• Avoids unnecessary BACS payments or card refunds.
• Reduces administration for both you and the client.
• Maintains a complete audit trail within Digit.
• Ensures both policy balances remain accurate.

Before you begin

Before transferring a deposit, confirm that:

• The original payment was created and reconciled through Digit.
• The funds are available to be reallocated.
• The transfer is permitted under your internal accounting procedures.

If the original payment was taken via SagePay/Opayo, follow your normal card refund process instead.

Suggested process

Step 1 – Identify the source policy

Locate the policy that currently holds the client's deposit.

Confirm:

• The payment has been reconciled.
• The available balance is sufficient for the transfer.

Step 2 – Create the accounting movement

Record the appropriate accounting entries within Digit to remove the available balance from the original policy.

The exact ledger entry will depend on your accounting workflow, but the movement should reduce the balance available on the source policy without creating an unnecessary external bank transaction.

Step 3 – Allocate the funds to the new policy

Apply the corresponding accounting entry to the destination policy.

This should increase the available funds against the new policy so they can be used towards the premium due.

Step 4 – Reconcile the entries

Complete the reconciliation within Digit so that:

• Both policy balances are updated correctly.
• The ledger reflects the movement of funds.
• A complete audit trail is maintained.

Because no money has actually entered or left your bank account, this is an internal accounting transfer, not a payment or refund.

Important

• Do not refund the client unless the money is genuinely leaving your client account.
• Do not ask the client to pay again if the existing funds can be legitimately transferred.
• Ensure both sides of the transfer are recorded so that neither policy shows an incorrect balance.

Example

A client pays a £150 deposit towards Policy A.

Before cover starts, it is agreed that the deposit should instead be used for Policy B.

Rather than:

1. Refunding £150 to the client.
2. Waiting for the client to make another payment.
3. Reconciling a second bank transaction.

You can:

1. Reduce the balance held against Policy A.
2. Create the corresponding accounting entry against Policy B.
3. Reconcile both entries within Digit.

The overall balance of client money remains unchanged, while both policy records accurately reflect where the funds have been allocated.