Customer overpayment

Hi kinderbro-juno-c,

Thank you for taking the time to get help with handling your customer's overpayment. I'm happy to assist you.

To start, you'll want to enter the full amount when paying the invoice for transparency, and so you can match the transaction on the Banking page.

1. Open the invoice and click Receive payment.
2. Enter the full amount in the Amount received field.
3. Click Save and close.

An invoice overpayment will automatically appear as an open credit on your customer profile and result in having negative Accounts Receivable (A/R), not over-revenue. Since you don't want to refund it, we can write off the overpayment by making a journal entry. We'll debit 10⍧ from A/R and credit 10⍧ to an offsetting account. You can ask an accountant what's the correct offsetting account to use.

1. Click New and choose Journal entry.
2. Enter the following details in the first line:
   • ACCOUNT: Accounts Receivable
   • DEBIT: 0.10
   • NAME: tag the customer's name
3. Enter the following in the second line:
   • ACCOUNT: your offsetting account. Create one if you haven't already.
   • CREDIT: 0.10
4. Enter a memo and click Save and close.
   
   

The journal entry will also post under the customer profile because we are using the A/R account and tagging the customer. We'll need to link it to the open credit to close both transactions.

1. Click New and choose Receive payment.
2. Choose the customer in concern as the payee.
3. Select the journal entry in the Outstanding transactions section and the 10⍧ unapplied payment in the Credits section.
4. Click Save and close.
   
   

After entering all the transactions, you can run a Balance Sheet report or an Accounts Receivable account report to see how the above transactions flow in your books. You can also check about categorizing and matching bank transactions for your reference in the future.

I'm only a comment away if you have any questions throughout the process. Take care and enjoy your weekend!