Solved

Customer overpayments

Forum|Forum|4 years ago
June 30, 2022
10 replies
9 views

Greetings!

One of my customers paid an extra amount of GBP by mistake. I have only one open invoice to match the received payment. And I need to transfer the excess amount to his bank account later. Can anyone help me to record this scenario in QuickBooks.?

I appreciate any help you can provide.

QuickBooks Online

Best answer by paul72

HI @DileepaNirmal

(1) Record the Payment Received:

...go to Receive Payment > enter the amount received & tick the invoice(s) 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

(2) Record the Refund:

...go to Create Cheque - enter the repayment from Accounts Receivable with VAT Code NoVAT

(3) Link the Refund & the Credit:

... go to Receive Payment again - you should now have a Refund & Credit to cancel against each other - select both & enter a £nil transaction.

Hope this helps.

S

ShiellaGraceA

Level 9

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:

Go to +New.
Select Receive payment.
Pick the customer's name, then enter the credit and the invoice.
Select another pending invoice and enter the overpayment amount in the Payment column.
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.

D

DileepaNirmalAuthor

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

paul72Answer

Level 6

HI @DileepaNirmal

(1) Record the Payment Received:

...go to Receive Payment > enter the amount received & tick the invoice(s) 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

(2) Record the Refund:

...go to Create Cheque - enter the repayment from Accounts Receivable with VAT Code NoVAT

(3) Link the Refund & the Credit:

... go to Receive Payment again - you should now have a Refund & Credit to cancel against each other - select both & enter a £nil transaction.

Hope this helps.

D

DileepaNirmalAuthor

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;

paul72

Level 6

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?

@DileepaNirmal wrote:
After sending the extra money...

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.

Sign up

Login with SSO

Let's get you signed in

Login with SSO