Kustom may issue invoices when your account or settlement balance becomes negative, regardless of whether your account is active or terminated. This article explains why such invoices are generated, when they are issued, and how they are managed.
Understanding Negative Balance Invoices
A negative balance occurs when the total refunds or adjustments on your account exceed your sales or payouts. Some common scenarios include:
Refunds Exceeding Sales: If refunds surpass recent sales, your account will reflect a negative balance, which may trigger an invoice to settle the amount.
Cancelled Agreements or Lack of Orders: For accounts with no new sales (e.g., terminated agreements), Kustom cannot deduct refundable amounts from incoming payouts. As a result, refunds and related debts are invoiced directly.
Negative Settlements: Settlements might show a negative balance if prior-period debts are carried over, or fees and adjustments are not offset by payouts. Such negative balances will result in invoices to reconcile the outstanding amounts.
Payment Flow Changes: Changes like platform or payment provider switches may cause reconcilable amounts that cannot be netted against ongoing payments, leading to direct invoicing.
Special Cases and Platform Migrations
Platform Transactions (e.g., Klarna to Kustom): In situations such as migrations from another payment platform (e.g., Klarna to Kustom), negative balances created during the transition (e.g., refund processed after payout) are inherited and invoiced by Kustom.
Conditions for Invoice Generation
Kustom generates invoices under the following conditions:
Time-Based Triggers: - If your account has a negative balance for 14 days with no captures (no new sales), or - If the negative balance persists for 30 days, regardless of sales.
Negative Payout Reports: - If refunds and fees exceed sales, resulting in a negative payout report, you have seven days to offset the balance before an invoice is issued.
Invoices remain active until fully repaid, regardless of future sales activity. You will receive invoices and instructions by email, and can manage delivery preferences via the Kustom portal under Settlements > Invoices > Add invoice delivery details.
Managing and Monitoring Invoices
Portal Updates and Visibility: If you notice an invoice marked as unpaid despite receiving a cancellation notice, this likely reflects a system delay in updating the Kustom portal. Rest assured, cancellations remain valid even if the portal hasn’t refreshed yet. Recheck later for updates.
Tracking and Documentation: You can view settlement and reconciliation reports in the Kustom portal under the Settlements section. These reports provide insights into how balances are calculated, their origins, and related invoices.
Summary
Invoices issued for negative balances ensure timely resolution of debts arising from refunds or adjustments. Understanding invoice triggers, managing them proactively via the Kustom portal, and ensuring balances are reconciled can help avoid complications. Contact Kustom support for any unresolved issues or if additional clarification is needed.