credit memo creation

Hi there, dLearned.

Welcome back to the QuickBooks Community. I'll share details on how customer's credits or to handle overpayments in QuickBooks Online.

Once the customer overpays more than what was owed, you can enter a credit memo, refund the customer, or enter the overpayment as a tip in QuickBooks. Since the customer pays you $500 and the invoices to be paid are only $400, there's no option to automatically issue a credit memo for $100 in QuickBooks Online. Meanwhile, you can enter the full amount of $500 in the receive payment window and choose the four invoices that cost $100 each. This way, it will automatically create a credit to the customer's profile that you can apply for future invoices. 

I've attached a screenshot below for visual reference:

You can click this article to see detailed steps on how you can apply the available credit to customers' balances or open invoices: Create and apply credit memos or delayed credits in QuickBooks Online.

I'm also adding this article to see various information on how you can refund the customer or record the overpayment as a tip-in QBO: Handle a customer credit or overpayment in QuickBooks Online.

Keep me posted on how it goes or if you need additional help. I'll keep an eye on your reply. I'd like to make sure this is taken care of.

Thank you for your reply.  Just so I am clear, if I do as described, there would be a $100 "amount to credit" left over (which I suspected).  Now do I HAVE to create a credit (memo or delayed credit)?  If I don't do that extra step, does this extra money display on a customer statement or balance?

Hi there, dLearned.

Not entering a credit memo will not display a balance on your customer's statement. That said, you'll have to enter the transaction amounting to $100 as stated by my colleague.

You can click this article to see detailed steps: Create and apply credit memos or delayed credits in QuickBooks Online.

Don't hesitate to reach out to me if ever you needed help.

Thank you!  So then one last point of clarification.  If, instead of the scenario stated, what if the customer overpaid an invoice.

So we have a customer that paid (according to the check stub) for an invoice that didn't exist.  I did as suggested above, and created a credit memo for the excess amount.  The same customer, on a second check, overpaid an invoice (paid $7500 instead of $75.00).  I have paid the invoice exactly as they indicated, and the invoice now shows a balance of $-7425.  In this case, am I correct in assuming that this balance (because it is attached to an actual invoice) will display on the customer statement as a negative amount?  And if so, it can be "paid" and in effect applied to other invoices? If so, there would be no need to create a credit memo or anything else, correct?

Hello,

I saw this thread and have a question as to the impacts of the credit in the Bank Register and finally Reconciliation.  Following the same example, 4 invoices each of $100 have been issued.  The customer pays $500, which leads to a $100 credit.  A bank deposit is created (+New, Bank Deposit) with all the checks amounts and deposited into the bank.  When the bank statement is received you reconcile based on the checks deposited (which includes the $500 payment).  Next month, the credit is applied to the customers new invoice. That invoice shows up in the bank register as a payment eventhough it was from a prior credit.  The bank statement does not reflect the payment since the check was applied and reconciled in the prior month.

How do you remove the invoice which was paid via a credit, from the bank register.  If you show as reconciled or cleared, your QBO cash balance will be reduced thus not matching your bank statement.  

Should I have processed the deposits differently than +New, Bank Deposit method?

thank you,

Hector

Hi Delarosah!

I see this is a duplicate of what I answered earlier. Please check this out:

https://intuit.me/3d40vby

You can reply in the other thread if you have any additional questions, but please consider contacting our QBO Support as well since there are many affected transactions in your record.