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Community Contributor **
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Customer overpaid, but can't find credit to apply to next invoice

Quickbooks Pro 2013 Desktop, Windows:

 

We have a customer who accidentally sent us two checks for the same amount last week. One was significantly more than the invoice it was to be applied to. They said to deposit it and give them a credit towards their next invoice. I did this in Receive Payment (Applied $2140.89 to the $399.06 invoice), and chose to apply the overpayment as a credit to be used later. I'm ready to do that now (actually it'll probably be two invoices), but when I create the new invoice, it shows no credit on the account. 

 

When I look at the entry in Receive Payments from the overpayment, at the bottom of that window, it says there's an overpayment of $1749.81, which is the correct amount.  The radio button for "Leave the credit to be used later" is selected. 

 

However, in Receive Payments for the new invoice, I'm not prompted to apply any credit towards the new invoice, nor does any available credit appear when I click on "Discounts and Credits"

 

Where is this missing credit? I need to send them invoices today before I go on vacation, but I'm completely baffled as to what's going on. We've done this before and it just worked. 

Best answer 10-29-2018 01:57 PM

Accepted Solutions
Community Contributor **

Re: Customer overpaid, but can't find credit to apply to next invoice

This makes sense. I don't care if it's the "right" way to do it as long as the numbers are correct in the end. This client does work with us weekly, so nothing is going to carry over from one year to the next. They overpaid last week and the new batch of invoices this week already surpassed the overpayment. So I just applied the overpayment to those invoices in Receive Payments and it's done. 

 

Thanks.

7 Comments
Established Community Backer ***

Re: Customer overpaid, but can't find credit to apply to next invoice

2013 is so old I no longer have it installed to try it, and try to see what the issue is.

 

Do you have more than one accounts payable created?  If so try switching the invoice to the other a/r account

 

Does the customer balance detail report show the credit?

Community Contributor **

Re: Customer overpaid, but can't find credit to apply to next invoice

For this customer we add a job for every project we do. So the structure is: Customers/Customer Name/Job Name -- invoices are tied to the job. Not sure if that creates another AP, but it's how we organize a lot of our stuff and moving the invoice into a different job is going to be confusing if we have to revisit this later. 

 

If I open the Customers window and click on Open Balance, I see the new invoice (positive amount) and the overpayment (negative number matching the overpayment mentioned above). So Quickbooks sees it correctly in the open balance window. 

 

But when I try to apply that overpayment to the new invoice, using either Discounts and Credits or "Apply Credit" I'm told there are no credits to apply. 

Established Community Backer ***

Re: Customer overpaid, but can't find credit to apply to next invoice

If the credit is on one job, and the invoice is on another, QB will not show the credit since it thinks the jobs are unique.  They changed that in 2019, but in that old a version you have to use a work around if that is the case

 

create a liability account called clearing
create an other charge item called move-credit and select the clearing account on the item screen

create an invoice for the main customer in that amount and use the move-credit item
in receive payments click the invoice and apply the credit

create a credit memo for the job, use the move-credit item and the amount
in receive payments apply the credit to the job

Community Contributor **

Re: Customer overpaid, but can't find credit to apply to next invoice

That is just colossally stupid, if you ask me. But I should expect nothing less from Quickbooks...

I mean, "Job" is the application's nomenclature, and you don't invoice a Job, you invoice a Customer. Job names and POs are used to differentiate from project to project within a given customer. 

 

Thanks for the work-around. I'll give this a try when I'm back in the office. 

Established Community Backer ***

Re: Customer overpaid, but can't find credit to apply to next invoice

As I said they fixed this in the 2019 version, and I would sincerely suggest you consider upgrading

Established Community Backer ***

Re: Customer overpaid, but can't find credit to apply to next invoice

If you have used Receive Payment originally for Customer Name only, then every time you need to use that credit, you would open that original Payment screen and see the Job Column, so that you can apply it to all jobs that need it, even into the future.

 

And what really is the issue here, is that you carried Negative AR all this time, which is not proper for your accounting. When someone overpays, you do it like this, using an Other Charge Type item:

 

Cash Basis entity = this is supposed to be seen as income. Your item links to Income; you make an invoice for the date and amount of that balance that is the overpayment. You apply the payment to this invoice, too.

 

Accrual Basis entity: that prepayment item links to Liability.

 

Later, you make an invoice for an actual gross sale; now you are ready to Apply the prepayment (or previous overpayment) to the new sales invoice = make a Credit Memo and put the prepay/overpay item here. Apply this using the icon at the top of the Credit Memo. Or, refund it from that icon, or Both needs (partial payment, partial refund).

 

That removes it from being negative AR the whole time you are holding someone else's funds, obscuring your real Total AR owed to you, and properly carrying it Not as negative AR, but as either liability or income (and then applied later as reducing income later), for proper accounting and tax reporting.

 

Example: A cash basis entity that has $5,000 negative AR, really has $5,000 income to report that year. The next year, they make $8,000 sale, and apply the $5,000 to it, and that is acting like a Discounted sale, and only $3,000 is the new net income to report this new year.

 

Community Contributor **

Re: Customer overpaid, but can't find credit to apply to next invoice

This makes sense. I don't care if it's the "right" way to do it as long as the numbers are correct in the end. This client does work with us weekly, so nothing is going to carry over from one year to the next. They overpaid last week and the new batch of invoices this week already surpassed the overpayment. So I just applied the overpayment to those invoices in Receive Payments and it's done. 

 

Thanks.