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sr1962dl
Level 2

I need to record an overpayment in QBO. How do I code this and do I account for the 20% VAT?

A client has received a payment from a client of which, when applied to outstanding invoices, there is an overpayment of about £6,000.  How do I record this and do I have to account for the VAT element as well.  We want to apply the overpayment to ongoing invoices that are due to go out soon.  Hope this makes sense, thank you

Solved
Best answer January 28, 2022

Accepted Solutions
jamespaul
Moderator

I need to record an overpayment in QBO. How do I code this and do I account for the 20% VAT?

Hello, sr1962dl.

 

I'll lend a hand and ensure you'll be able to record the client's overpayment. I'll also add some details regarding the VAT element. 

 

You'll simply want to record the overpayment through the Receive payment function. There's no need to account for the VAT element since it's already calculated through the client's invoices. 

 

To record the overpayment: 

 

  1. Click the + New button, then select Receive payment
  2. Choose the client's profile under Customer.
  3. Set the Payment date to when they paid those invoices. 
  4. Under Deposit to, select the bank account or the Undeposited Funds account where you want to deposit the money. 
  5. For the Amount received field, enter the total amount that the client paid (the exact amount that leads to the overpayment). 
  6. Go to the Outstanding Transactions section, then check the invoices that the client paid. 
  7. Once done, click Save and close

 

Below the invoices table, you'll see the Amount to Credit section. QuickBooks will automatically calculate this and put a credit on the client's profile.

 

amounttocredit1.PNG

 

You can then use the credit amount for future invoices (through the Receive payment function again). 

 

You can use this article if you need more help recording your invoice payments: Record invoice payments in QuickBooks Online

 

Need to reconcile your transactions within QuickBooks Online? We have an article to help you with the process: Reconcile an account in QuickBooks Online.

 

You're more than welcome to ask any other questions about recording other transactions (or doing a specific task in QuickBooks). I'll get back to this thread and lay down the steps and details. 

View solution in original post

7 REPLIES 7
jamespaul
Moderator

I need to record an overpayment in QBO. How do I code this and do I account for the 20% VAT?

Hello, sr1962dl.

 

I'll lend a hand and ensure you'll be able to record the client's overpayment. I'll also add some details regarding the VAT element. 

 

You'll simply want to record the overpayment through the Receive payment function. There's no need to account for the VAT element since it's already calculated through the client's invoices. 

 

To record the overpayment: 

 

  1. Click the + New button, then select Receive payment
  2. Choose the client's profile under Customer.
  3. Set the Payment date to when they paid those invoices. 
  4. Under Deposit to, select the bank account or the Undeposited Funds account where you want to deposit the money. 
  5. For the Amount received field, enter the total amount that the client paid (the exact amount that leads to the overpayment). 
  6. Go to the Outstanding Transactions section, then check the invoices that the client paid. 
  7. Once done, click Save and close

 

Below the invoices table, you'll see the Amount to Credit section. QuickBooks will automatically calculate this and put a credit on the client's profile.

 

amounttocredit1.PNG

 

You can then use the credit amount for future invoices (through the Receive payment function again). 

 

You can use this article if you need more help recording your invoice payments: Record invoice payments in QuickBooks Online

 

Need to reconcile your transactions within QuickBooks Online? We have an article to help you with the process: Reconcile an account in QuickBooks Online.

 

You're more than welcome to ask any other questions about recording other transactions (or doing a specific task in QuickBooks). I'll get back to this thread and lay down the steps and details. 

test32
Level 1

I need to record an overpayment in QBO. How do I code this and do I account for the 20% VAT?

I have a client who overpay.  How can I apply a portion to the invoice and the rest to a future invoice?

Kurt_M
QuickBooks Team

I need to record an overpayment in QBO. How do I code this and do I account for the 20% VAT?

Thanks for joining us here in the thread, @test32


You can refer to my colleague @jamespaul's post to get this sorted out.
 

Feel free to visit these articles for future references:

 

The Community is open 24/7 if you need assistance performing some features in QBO. You can also notify me by leaving a comment down below. I'll make sure to keep an eye on your response. Keep safe and have a nice day! 

test32
Level 1

I need to record an overpayment in QBO. How do I code this and do I account for the 20% VAT?

thank you! what can i do with the payment that came in as a bank feed.  Normally that gets applied to the invoice but since there can't be a match because the amount is higher than the invoice, what can I do since I don't want to duplicate the credit when i create a Credit note as you recommend.  

Kurt_M
QuickBooks Team

I need to record an overpayment in QBO. How do I code this and do I account for the 20% VAT?

Thanks for getting back in the thread, @test32.

 

You can consider excluding the bank transactions and manually clear those recorded payments in your QuickBooks Online (QBO) account. Another workaround is to create an invoice and then receive payments for the existing amount. Once done, you can proceed to make a bank deposit. It's the same bank deposit that you'll match to your bank transaction.

 

If you're unsure with the process, you can also reach out to your accountant. This way, they can provide you with the best possible option to easily deal with this.

 

Please feel free to visit these articles for future reference:

 

 

You can always count on us here in the Community if you need help performing specific features in QuickBooks. Rest assured that we're all ready to assist you anytime. Keep safe and have a good one!

paul72
Level 8

I need to record an overpayment in QBO. How do I code this and do I account for the 20% VAT?

Hi @test32 

 

You only need to create a Credit Note if you're refunding or cancelling a previous invoice.

 

If your customer has simply paid you too much (you want to keep the balance on file for future) then go to Receive Payment > enter the amount received & tick the invoices you are clearing.

At the bottom of the screen will be the total of the invoices plus a line that says... This transaction will create an additional credit in the amount of £xxx

 

That amount is kept on the customer's account for future.

The Receive Payment also posts to the bank account so should create a payment to match on the bank feed (I don't use bank feed so am not certain on that point)

 

Hope this helps.

test32
Level 1

I need to record an overpayment in QBO. How do I code this and do I account for the 20% VAT?

Thank you! that was very helpful and solved my problem 

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