Hello @fledglingbookkeepingco,
Welcome to the Community space! I'm glad to see you posting here. I can clarify information about how you can handle the credit in QuickBooks Online.
There are a few options you can choose from when a customer overpays. How you handle it depends on how it happened in the actual scenario.
You can use the credit toward an invoice, refund the customer, or enter the overpayment as a tip in QuickBooks. Based on your details, the closest one is to apply the credit memo to the invoice.
However, I still recommend checking out the three options available to ensure you enter the transactions correctly. I've included a link that contains detailed instructions depending on the scenario: Handle a customer credit or overpayment in QuickBooks Online.
Aside from a credit memo, you can also give delayed credit to customers. For more details about how to enter this in QuickBooks, check out this article: Create and apply credit memos or delayed credits in QuickBooks Online.
Drop me a comment below if you have any other questions about customer overpayments. I'll be happy to help you some more.
