Dealing with Overpayment

Hello liza-careandcomp

You can record a refund to your client using an expense if they want you to reimburse the accidental overpayment. Using an expense to record the refund reduces your bank's balance and offsets the customer's open credit caused by the overpayment. (Tip: entering the full amount of the payment received on the 'receive payment' screen will close the invoice and automatically creates an unapplied credit of the overpayment amount on the customers account). 

To record the refund for your customer:

1. Select + New > Expense (if you're in Business view, follow the steps to switch to Accountant view first.)
2. Select the customer you want to refund from the Payee ▼ dropdown.
3. From the Payment account ▼ dropdown, select the bank account where you deposited the overpayment to.
4. On the first line of the Category column, select Accounts Receivable.
5. Enter the overpayment amount in the Amount field.
6. Fill out the other fields as you see fit, then select Save and close.

To link the refund to the overpayment:

1. Select + New > Receive payment.
2. Select the same customer you used for the check or expense when recording the refund.
3. Fill out the other fields as you see fit.
4. Under the Outstanding Transaction section, select the checkbox for the expense you created when recording the refund.
Note: If you have automation to apply bill payments turned on, this step is done for you.
5. Make sure the payment is equal to the open balance, then select Save and close.

I have a similar situation. I have an invoice and a payment that is more than the invoice. I put in the total amount of payment a left the overpayment as a credit in QuickBooks Desktop Pro Plus 2023. The deposit states the amount is the original amount of the invoice paid NOT the check received payment amount. i.e. invoice was $3,200 payment was $3,500 and deposit should be $3,500. Credit left on customer account is $300. How do you get the deposit to read the $3,500?