Customer overpayments

Hello, @DileepaNirmal.

I'll share the steps on how you can record customer overpayment. You can either apply the credit to an invoice, refund the customer for the overpayment, or record overpayment as a tip. Let me guide you how to do it.

To apply it to an invoice:

1. Go to +New.
2. Select Receive payment.
3. Pick the customer's name, then enter the credit and the invoice.
4. Select another pending invoice and enter the overpayment amount in the Payment column.
5. Click Save and new or Save and close.

For details on the other options, check out this article: Handle customer credit or overpayment in QuickBooks Online.

I'm also adding this link in case you need help in reconciling your account. It has steps to guide you along: Reconcile an account in QuickBooks Online.

Please know that you're always welcome to reply to this thread if you have follow-up questions or concerns with overpayments. I'm here for you. Take care.

Your answer is weird. I mentioned that there were no more pending invoices for that customer. Have only one invoice. You like just copied an answer from a related post. Anyway, Thanks

Thank you very much. And I'd like to know one more thing. When creating the what should I select as the category?

Please find the attached screenshot;

Sorry @DileepaNirmal - for some reason I cant' see the screenshot.

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@DileepaNirmal wrote:

When creating the what should I select as the category?

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Creating the Refund?

This needs to go from the Accounts Receivable (Debtors) account/category - so that it's available as a credit in the Receive Payment screen for (3).

Sorry. I missed the word "refund" in the previous comment. Yes. I asked about the category which I should select when creating the cheque.

Paul, I have tried this way;

Banking window > Select the received payment > Select find match option > Select the remaining invoice > Record the remaining amount as an advance payment (Current Liability) with No VAT 

After sending the extra money, I created a journal entry;

Advance payments  Debit 

    Current                    Credit

I then matched the journal entry to the banking transaction that sent money to the debtor.

What do you think about this way?

Hi @DileepaNirmal 

I don't use the Bank Matching process in QBO - so I'm not sure exactly how it works.

If you check the Advance Payment (Current Liability) account balance is zero again - as you have worked out, there is usually more than one way to do things like this but you always want the end result to balance out.

Also check that the Bank Balance is correct after the transactions.

Finally, check that the Customer's account register is zero afterwards - so that QBO doesn't think money is owed one way or the other.

If those three are balanced, you're good to go.

The only point that's nagging me is which Category/Account did you use for the Refund Cheque in QBO?

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@DileepaNirmal wrote:

After sending the extra money...

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If you used Accounts Payable (Debtors) from my method, I think you may still find a balance in the Customer Register doing it this way.

I think if you used the Advance Payment (Current Liability) account (again with No VAT) you wouldn't need the Journal.

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@paul72 wrote:

The only point that's nagging me is which Category/Account did you use for the Refund Cheque in QBO?

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Ignore that @DileepaNirmal - I think I can see now!

You didn't actually enter a Refund Cheque into QBO, you sent the payment from the Bank & matched the payment against the Journal in QBO.

- in this case, the Journal is simply taking the place of the Refund Cheque in QBO.

Personally, I would have entered as a Cheque instead of a Journal (it's a little more obvious if anyone's reviewing at a later date) but yes it should work - just double check that the three things above all balance.

Have a good weekend!

Hi Paul, 

I checked all the things. It's all okay.

I didn't use the refund receipt. Instead of that, I used the journal entry;

You said you would not have to use the journal again if you've used the advance payment account. Actually, I used the journal only once. I used the journal entry to record the transaction I sent the money back. 

Advance payments                Debit

   Current                                    Credit

You helped me a lot. Thank you very much.

Have a great weekend!