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gmoran59
October 7, 2021
Question

We received an Overpayment on a customers account how do we reconcile the payment total when matching invoices to the payment?

  • October 7, 2021
  • 17 replies
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    17 replies

    Rea_M
    October 7, 2021

    Matching an invoice overpayment to your downloaded payment transactions is my priority, @gmoran59. Let me guide you on how.

     

    When you receive an overpayment on a customer's account, you'll have to use the Receive payment option to enter the actual amount paid for the invoice. Then, choose to either do a refund or keep it as a credit (only if you've set up customer credits to apply to future payments by default). You can refer to this article to learn more about this: Handle a customer credit or overpayment in QuickBooks Online.

     

    Once you're done, deposit the payment (from the Undeposited Funds account) using the Bank deposit feature. This way, you're able to deposit the funds or the received payment in the bank. Here's how:

     

    1. Go to the + New button.
    2. Select Bank deposit.
    3. From the Account dropdown, choose the account you want to put the money into.
    4. Click the checkbox for the payment you've received.
    5. Select Save and close or Save and new. 

     

    Then, once the payment is downloaded, match it to the existing entry in QuickBooks to keep your account updated. For the step-by-step guide, you can refer to this article: Categorize online bank transactions in QuickBooks Online.

     

    Also, I'd recommend reconciling your accounts every month. This will help you monitor your income/expenses and detect any possible errors accordingly. You can check out this article for the detailed steps: Reconcile an account in QuickBooks Online.

     

    Please don't hesitate to let me know if you have other concerns about managing invoices and payments in QBO. You can drop a comment below, and I'll gladly help. Take care, and I wish you continued success, @gmoran59.

    gmoran59Author
    October 18, 2021

    I understand you would create a credit for the over payment to the customer account but what do you do when the reconciling the invoices to the payment receipt for the over payment amount.  If I create a Credit memo it shows up at the bottom of the receive payment screen but if i chose that entry it increases the amount to credit reference not reduce it so what do i do?

    Ryan_M
    October 18, 2021

    Thank you for the prompt reply, @gmoran59. I'll help clear things up for you about customer overpayments in QuickBooks Online (QBO).

     

    The way you deal with a customer's overpayment depends on what he wants to do with it. If he wants a refund, then you need to create an expense or a check. Otherwise, you create a credit note. 

     

    As for the credit note, you have two options for it. You can apply it on a different invoice:

     

    1. Go to the + New menu, then select Receive payment.
    2. Choose the customer in question, then the credit note and the invoice.
    3. Tick the box of another pending invoice where you want to apply the credit note. Enter the overpayment amount in its Payment column.
    4. Hit Save and close.

     

    Or, use it on a new invoice:

     

    1. Move to the + New menu, then select Invoice.
    2. Proceed with creating the invoice, then press Save.
    3. Click the Receive payment button.
    4. Tick the box for the credit note in question then hit Save and close.

     

    In your situation, you can include the overpayment in the Receive Payment screen. There isn't a need to manually create a credit note for this process, since the system will automatically create it for you. Edit the Amount received box to including the overpayment, and only select the invoice in question. You'll get the pop-up message asking if you want to Save it as a credit.

     

    See the screenshot below for your reference:

     

     

    Additional information about this process is in this article: Handle a customer credit or overpayment in QuickBooks Online. 

     

    In case your customer considers an overpayment as a tip, you can view this article for the steps: Record an invoice overpayment as a tip.

     

    Feel free to post a reply in the comments below if you have other questions. I'll be sure to get back to you. Have a nice day!

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