Skip to main content
T
Trudye
February 17, 2023
Solved

Overpayment of Invoice from Customer on QB Desktop Enterprise

  • February 17, 2023
  • 2 replies
  • 0 views

Here's the scenario:

 

1. Invoice created and sent to John Smith, LLC for $100

2. John Smith,LLC pays me $150

3. John Smith, LLC says that we can keep the extra $50 for a future invoice

 

This is where I am not sure the next steps. 

 

In Option 1:
 1. Make receive payment for $100.  

 2. Make Credit Memo to Client for $50

 Problem: When the I go to make a deposit - I cannot attach a credit memo, so it will only attach the $100. How do I match to the other $50?

 

In Option 2:

 1. Make Receive Payment for $150.

 2. Match to the Deposit of $150

 3. It allows me to save the extra $50 as a credit

Problem: It is showing a negative $50 in my A/R on cash basis.

 

How would I make sure that I have the credit for a future invoice - if that invoice is not created for a year, and also not have negative A/R showing up on my Balance Sheet in Cash Basis?

Best answer by JamesAndrewM

Thanks for getting back to the thread, @Trudye.

 

I'll conform with others and share information that could help clarify things for you.

 

To help you properly handle an overpayment from a customer in QuickBooks Desktop Enterprise, you could follow these steps:

 

Option 1: Create a Credit Memo

 

  1. Make a Receive Payment transaction for the full amount of $150.
  2. Create a Credit Memo for $50 for John Smith, LLC, and save it.
  3. When you go to make a deposit, you can add both the payment of $100 and the credit memo of $50 to the deposit. This will result in a deposit of $150 in your bank account.

 

Option 2: Apply the Overpayment to Future Invoices

 

  1. Make a Receive Payment transaction for the full amount of $150.
  2. In the Receive Payment window, under "Outstanding Transactions," select the original invoice for $100 and apply the payment to it.
  3. Create an invoice for John Smith, LLC for $50 (you can use the same customer account and job name). Save and close the invoice.
  4. The $50 overpayment will now be shown as a credit on the customer's account, which can be applied to future invoices when they are created.

 

Furthermore, the A/R is negative because it is a balance that will be cleared if applied to an invoice.

 

You may visit this article for tips about handling your QBDT reports: Customize reports in QuickBooks Desktop.

 

Please don't hesitate to reach out to us if you need assistance with QuickBooks-related concerns. Have a nice day!

2 replies

G
GlinetteC
February 17, 2023

Hello there, Trudye. Thank you for sharing detailed information about your overpayment issue. I'm here to lend a hand on how QuickBooks handles this.

 

QuickBooks Desktop will ask if you want to retain the credit or refund the customer. The overpayment is negative A/R which is why it's showing negative on your balance sheet. If you choose to leave the credit for future use, here are the steps you can perform:

 

  1. From the Customers menu, select Receive Payments.
  2. Under the Received from drop-down, choose your customer.
  3. Then, select the Discounts and Credits icon.
  4. On the Credits tab, check the credit you want to apply and then Done.
  5. You may see a prompt to Confirm the transfer. If you do, select Yes. The amount will be applied automatically to the invoice.
  6. Select Save & Close.

 

However, if you choose to refund a customer, please follow the process below:

 

  1. Select Customers from the top menu bar.
  2. Choose select Receive Payments.
  3. From the Received from drop-down menu, enter the appropriate customer.
  4. Click the Discounts and Credits icon.
  5. In the Available Credits section, select the check you created, then hit Done.
  6. If you'll be prompted to confirm the transfer, select Yes. 
  7. When you're done, click Save & Close.

 

To learn more about the process, read this article:  Give your customer a credit or refund.

 

I also encourage visiting our Customer Transaction Workflow Guide to help track your sales and receivables in QuickBooks Desktop.

 

If I can be of any assistance, please don't hesitate to visit this thread again. I'll be right here to assist you again.

T
Trudye Author
February 17, 2023

Ok - so with the example - when they pay me..

 

I am supposed to receive payment for 150, and then second step is follow your list to make a credit memo? 

 

Because I am not able to do a normal receive payment for 100 and then your steps for 50 and have it match to the bank deposit I make in QB. 

J
JamesAndrewMAnswer
February 17, 2023

Thanks for getting back to the thread, @Trudye.

 

I'll conform with others and share information that could help clarify things for you.

 

To help you properly handle an overpayment from a customer in QuickBooks Desktop Enterprise, you could follow these steps:

 

Option 1: Create a Credit Memo

 

  1. Make a Receive Payment transaction for the full amount of $150.
  2. Create a Credit Memo for $50 for John Smith, LLC, and save it.
  3. When you go to make a deposit, you can add both the payment of $100 and the credit memo of $50 to the deposit. This will result in a deposit of $150 in your bank account.

 

Option 2: Apply the Overpayment to Future Invoices

 

  1. Make a Receive Payment transaction for the full amount of $150.
  2. In the Receive Payment window, under "Outstanding Transactions," select the original invoice for $100 and apply the payment to it.
  3. Create an invoice for John Smith, LLC for $50 (you can use the same customer account and job name). Save and close the invoice.
  4. The $50 overpayment will now be shown as a credit on the customer's account, which can be applied to future invoices when they are created.

 

Furthermore, the A/R is negative because it is a balance that will be cleared if applied to an invoice.

 

You may visit this article for tips about handling your QBDT reports: Customize reports in QuickBooks Desktop.

 

Please don't hesitate to reach out to us if you need assistance with QuickBooks-related concerns. Have a nice day!

R
robins1962
August 21, 2024

I have the same issue except, Quickbooks Desktop has made an invoice for the overpayment and applied the overpayment to the invoice that QB created. I have already refunded the overpayment and sent a check to the customer. When I uncheck the invoice QB made, it askes me about creating a credit or giving a refund...again.

I
Ivan_G
August 21, 2024

I've got your back in handling the overpayment accordingly in QuickBooks Desktop (QBDT), Robin. To address this matter accurately, I'll help you account the check to Accounts Receivable and link it to the available credits via Receive Payments.

 

If the invoice mentioned is erroneous, we can delete it in the system. In doing so, the linked overpayment will be unapplied. Here's how:

 

  1. Go to the Customers menu, then Customer Center.
  2. Click the Transactions tab and modify the Filter By and Date fields accordingly.
  3. Look for and double-click the invoice.
  4. From the upper portion of the Invoice page, hit Delete.
  5. Confirm the action by ticking OK.

 

Following that, let's edit the associated account on the check and change it to Accounts Receivable:

 

  1. Go to the Banking menu and select Write Checks.
  2. From the upper-left corner of your Write Checks page, click the Find button.
  3. Enter or select your customer on the Payee field and provide the rest of the details accordingly.
  4. Review the entered details and click Find.
  5. Double-click the check and modify the Account to Accounts Receivable.
  6. Choose the customer on the Customer Job dropdown, as it's a requirement to save this transaction as Accounts Receivable.
  7. Once done, hit Save & Close. Then, hit Yes on the Recording Transaction prompt.

 

Finally, let's link the check and the credit by utilizing the Receive Payments feature:

 

  1. Go to the Customers menu and pick Receive Payments.
  2. Tick the Checkbox for the check dedicated to the refund.
  3. Click the Discounts And Credits option and select the available Credit. Then, Done.
  4. Review everything and then Save & Close.

 

To learn more about handling customer refunds, kindly check this link: Give your customer a credit or refund in QuickBooks Desktop.

 

You may also review this article to help you once you need to pull up and organize your reports according to your preferred displayed information: Customize reports in QuickBooks Desktop.

 

If you have additional queries about customer refunds or need help managing other transactions and data, drop by again on this thread. I'll be around the clock to assist you promptly.

Terms & ConditionsAccessibility statement