Why is a tip with payment considered an overpayment or credit?

I'm here to help you, @n-howard.

In QuickBooks Online, there's a feature that allows customers to add tips to their payments manually. The reason for overpayments or credits when customers pay their invoices, is due to the tips not being turned on. Let me walk you through the process to make your overpayment or credit into a tip:

Step 1: Add an income account to track tips

1. Go to the Gear icon, then select Chart of accounts.
2. Select New. Depending on your account view, you will see either a "New Account" panel or a "New Category" panel.
    

Step 2: Create a tip item

1. Go to the Gear icon and click Products & services.
2. Select New, then Non-inventory.
3. Enter a Name like "Tips".
4. In the Income account, select the account you created in Step 1.
5. Click Save and close.

Step 3: Record the extra money as a tip

1. At the left navigation panel, select Sales and then click Invoices.
2. Select Create invoice.
3. Enter the Customer's name.
4. In the Products/Services field, select the tip item you created in Step 2.
5. Select Save. If your credits are set up for automatic application, you're all set. Otherwise, select Receive Payment.
6. Click the credit and then Save and close.

On the other hand, follow these steps to turn on the tips feature to add a Tips field to all your Invoice and Sales Receipt forms.

To turn tips on:

1. Select the Gear icon and then click Account and settings.
2. Click Sales.
3. In the Sales form content, select Edit.
4. Turn to Accept tips on.
5. In the Who's receiving these tips? window, click an option:
   Just me: Click if you only pay tips for yourself. This creates an income account for tips.
   My Team: Click if you use tips to pay your employees or others. This creates a liabilities account for tips.
6. Select Update.
7. Click Save, then Done.

You can check this article for more details about turning on and off the Tips feature: Turn tips on or off for sales forms in QuickBooks Online.

Furthermore, you can check this out in case you want to personalize your sales forms: Customize invoices, estimates, and sales receipts in QuickBooks Online.

If you have any further concerns about your Tips, please don't hesitate to share them with the community. Stay safe!