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Experienced Member

Apply an under-payment

We received a payment remittance of $7060.43 from our client for work order invoices that total $8069.29, however, they reduced the payment by $1008.86 in credits for other work done at different locations and/or for greater amounts than what were invoiced.
How can I receive this payment accurately?
Partial remittance attached.

Thank you in advance!

5 Comments
QuickBooks Team

Re: Apply an under-payment

Hello there, @GramCracker.

 

Let's create a barter account and get your payment recorded.

 

A barter bank account is used to post both sides of a traded transaction. For instance, you might trade or exchange something you sell for something a client sells.  

 

Recording a barter transaction is a process that requires a few one-time setup steps that can then be used to record any barter or trade transaction you may have with your customers or vendors. 

 

But, please make sure that the barter's partner name is both listed as a vendor and a customer. 

 

To set up a barter bank account: 

 

  1. Click List at the top menu bar, then choose Chart of Accounts.
  2. Press CTRL+N on your keyboard to create a new account.
  3. Choose Bank and hit Continue.
  4. You can enter Barter Account as the name and click Save.

Once done, receive the payment against the invoice:

 

  1. Go to the Customers menu.
  2. Click Receive Payments.
  3. Select the customer.
  4. Enter the total invoice amount on the Payment Amount section.
  5. Deposit it to the Barted Account.

After that, pay the bill using the barter account to zero out its balance:

 

  1. Go to the Vendor menu.
  2. Select Pay Bills.
  3. Click the bill to be paid.
  4. On the Account section at the bottom, choose the barter account.
  5. Hit Pay Selected Bills to complete the process.

You can read this article for your reference: Set up a Clearing Account.

 

Another way around, if your customer paid your vendor directly for materials you used, you can check out this article to learn how to record under-payment: Resolve Common Issues when Applying a Payment towards an Invoice.

 

If you have other questions, you can always go back to this post. Have a good day!

Experienced Member

Re: Apply an under-payment

This did not resolve my issue.
I do not have a "bill" needing paid. Therefore, I am not able to choose a bill to pay. 

 

I have credits at a particular location in excess of the invoice amount that the payment is being applied to.
The invoices I'm receiving payment on are for April Landscaping.

The client credits that the client reduced my April payment for were credits issued for February Snow Removal.

 

Example of receiving issue(s) with credit memos:

Location X February snow credit memo = $428.58

Location X April landscaping invoice = $386.40

 

Keep in mind, the client paid the entire February invoice in full prior to the credits being issued, and then reduced a completely different billing period.

 

Thank you in advance for your continued support.

QuickBooks Team

Re: Apply an under-payment

Hi GramCracker,

 

You can apply the credit on your invoice to correctly record it. Just make sure to record the overpayment to show the available credits. I'll show you how to record your credit.

  1. Go to Customers, then Receive Payments or double-click the invoice to open.
  2. In the Customer Payment window, select the open invoice. 
  3. Click the Discounts And Credits icon at the top.
  4. Click the Credits tab, then mark the Available Credits.
  5. Click Done.
  6. Click Save & Close.

Please read this article for details: Record a credit memo or refund in QuickBooks Desktop.

 

You might also find this article helpful: Accounts Receivable workflows in QuickBooks Desktop.

 

Please know that you can always come back here in the Community space if you have other questions.

Experienced Member

Re: Apply an under-payment

This does not work when the credit amount is larger than the invoice you're receiving payment on is.

Thank you for your effort.

QuickBooks Team

Re: Apply an under-payment

Thanks for coming back, GramCracker.

 

When you record the credit as overpayment or credit memo, you can see it in the customer's balance total. Then, use it against your next invoice.

 

For credit memo, go to Customer, then Create Credit Memos/Refunds.

 

To record an overpayment, here's how:

  1. Click Customers, then click Receive Payments.
  2. Select the invoice, then enter the amount in the Payment Amount field.
  3. Click Save & close.
  4. Click OK when prompted.

To apply the credit to your open invoice, here are the steps:

  1. Click Customer, then Receive Payments.
  2. Select the invoice, then click Discounts And Credits.
  3. The Discount and Credits window will open, click the Credits tab.
  4. Mark the available credit to apply on the invoice. Then, click Done.
  5. Click Save & close.

I've added some screenshots for you.

 

Additionally, you can still apply for the available credits if your invoice is greater than your credit.

 

Stay in touch if you have further concerns. We're always here to help.