A customer credit transfer request between different companies needs clear evidence of who owns the credit and who may authorise its proposed use. Keep the original customer balance identifiable while the request is reviewed. Common directors, branding or a group email domain do not make separate legal entities one customer account.

Accounting records, calculator and glasses on a desk
Illustrative photograph by Cht Gsml.

Establish the two accounts

Record the company holding the credit, the proposed recipient company, invoice references and currency. Identify whether the balance came from an overpayment, credit note or deposit. Keep the underlying transaction trail unchanged.

Verify the instruction through an established contact and the company’s approval process. A salesperson’s wish to clear a new invoice is not by itself evidence that another entity agreed to surrender its credit.

Ask for the proper arrangement

Give the accountant and commercial reviewer the proposed transfer and supporting correspondence. They should determine the appropriate documentation and ledger treatment. If legal rights or authority are unclear, seek advice rather than treating a software account merge as approval.

Keep any GST or invoice correction question separate from the transfer of a balance. A change of allocation does not automatically change who bought the original goods or services.

Example: a group customer changes its purchasing entity

An invoice is issued to a new group company, and an old company has an unused credit. Preserve both accounts and obtain the appropriate instructions. Do not rename the old customer so historical invoices appear to belong to the new company.

Reconcile both sides

After approval, record the linked entries and review the remaining balances. Confirm that the credit was neither refunded nor applied elsewhere as well. Keep the authority, approved treatment and reconciliation together so another reviewer can trace the outcome.

Related practical guidance

For the surrounding records and responsibilities, see bookkeeping basics, company records to keep, bookkeeping and accounting.

Official guidance: IRAS official guidance.

Help with your company records

For accounting, bookkeeping and related compliance support, contact Raffles Corporate Services at [email protected] or WhatsApp +65 8501 7133. Tell us which records or process need attention so we can discuss the relevant next steps.