Hello, when customer is paying for more then one invoice and is more than he owned, I usually match amount with open invoices and the difference I add under resolve button with a customer name and under Acc Receivebles category. That will create deposit/credit on customer account which I will apply on new invoice.
Problem is that after applying deposit/credit to new invoice, that amount will show up on balance sheet as UNAPLLIED CASH PAYMENT (because of the date when deposit is received).
Is there any other way to deal with a overpayment?
I'm here to share some information about Unapplied Cash Payment.
When we run your balance sheet report on a cash bases, we can see two accounts for unapplied cash payments. These accounts are automatically created by the program for cash-basis reporting and cannot be deleted or changed.
The Unapplied Cash Payment Income is used to report cash basis income from customer payments that are received but not applied to any sales form. It's intended for the money that we received but never declared the income on a sales form. Usually, the date of the payment is before the invoice date it's applied to. Example: We receive the payment today, and the invoice will be issued next week. It will be "unapplied" until next week when the invoice hits the books.
If an incorrect amount is showing in this account, we'll need to apply the payment to an invoice dated prior to the date of the payment. Otherwise, Unapplied Cash Payment Income is correct.
Actually, there are 3 ways of handling customer overpayments in QuickBook Online. The first one is applying the credit to an invoice which is currently what you're doing. The second one is giving a refund to your customer. In this process, we can use a check or expense to record the refund that will reduce your bank's balance and offset your customer's open credit. Let me show you how:
First, we'll have to record the refund for your customer:
Click the +New icon.
Select Expense or Check.
Select the customer you want to refund from the Payee ▼ drop-down.
From the Payment account ▼ drop-down, select the bank account where you deposited the overpayment.
On the first line of the Category column, select an Accounts Receivable.
Enter how much you want to refund in the Amount field.
Fill out the other required fields.
Hit Save and close.
Then, let's link the refund to the customer's credit.
Click the +New icon.
Select Receive payment or Receive invoice payment.
Choose the same customer you used for the check or expense.
Fill out the required fields.
Under the Outstanding Transaction section, select the checkbox for the Expense or Check you created.
Click Save and close to complete the process.
The last option in handling a customer overpayment is recording it as a tip. However, this is only applicable if your customer paid more than their total on purpose. You can refer to this article to learn more about this process: Record an invoice overpayment as a tip.
I'll be right here if you need more help in managing your customer credits. Have a great rest of the day Vanna!
Thank you for your reply. I understand what you are saying but I still don’t get how to clear Unapplied cash payments because all our invoices are closed - received money is applied to invoices but because of the dates, still sitting in Unapplied Cash Payments..... nightmare...