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mark-theduelinga
March 26, 2024
Question

How do I move an unapplied (over) payment in QBO to the outstanding balance of a later invoice and also show the credit paid against the later bill?

  • March 26, 2024
  • 1 reply
  • 0 views
$50,000 was moved to a bank account.  At the time, $43,305.62 in invoices and bills were paid.  This left an unapplied credit of $6,694.38 showing on the invoice side.  The next two invoices and bills were paid $6,694.38 less, because of the overpayment.  What do I need to do in QBO to 1) apply the unapplied payment to the invoice?  2) apply the $6,694.38 to the outstanding amount left to pay on the bill? so that everything is properly applied and cleared in QBO.  The actual second reduced payment was "matched" in both bank accounts to the amount actually paid which was $6,694.38 less.  This was a transaction between two company accounts.

 
This is the same bank and two different accounts.  We sent invoices out and "received" payment on one bank account, leaving an unapplied payment that needs resolved against the recent invoice.  We recorded bills on the other company account and on that bank account, showed that the second bill was paid for the amount that came through on the bank "spent" column to match it.  This remaining "bill" amount needs to be cleared out also, against the overpayment for the first bill.  I am not sure where QBO put this overpayment on the bill side.

1 reply

E
Erika_K
March 27, 2024

Hello, mark. I've got the steps to handle overpayments.

 

In QuickBooks Online (QBO), there is a way to use customer credit as payment for vendor bills. We can set up a clearing account to move the balances accurately, which we will use for the Journal entry. To proceed, I highly suggest seeking an accountant to further assist you with completing this process. 

 

To set up this account, we can: 

 

  1. Go to Settings ⚙ then select Chart of accounts.
  2. Choose New to create a new account.
  3. Under the Account Type dropdown menu, select Bank or Equity.
  4. Under the Detail Type dropdown menu, click Cash on hand.
  5. Enter the account name. (ex. Barter Bank Account)
  6. Hit Save

 

Afterward, we can create a Journal entry to offset the customer credit and vendor bill. Let me show you how: 

 

  1. Debit the Account Receivable (A/R) and choose the specific customer. 
  2. Debit the Account Payables (A/P) and select the vendor. 
  3. Credit the clearing account and enter the total amount for the A/P and A/R. 
  4. Then, click Save and close from the dropdown menu. 
     

 

Once done, we can link the Journal entries to the customer credit through Receive payment and the vendor bill via Pay bills. 

 

I have included helpful resources on recording deposits and how you can refund your customer in QBO: 

 

 

I'm still ready to assist if you have further concerns with managing overpayments and credits in QBO. Keep safe! 

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