I had to make a bank deposit for a customer overpayment to match our bank records. It was not a credit memo. How do I now use these funds to pay towards an invoice?

melissa-pennflee · ‎November 15, 2023

Customer overpaid and there was no invoice to select to apply it to. Funds became a credit on the customer account (not a credit memo). How do I now use these funds that were already deposited into ur bank account to pay towards a new invoice? Thanks

Ethel_A · ‎November 16, 2023

Hello there, @melissa.

Yes, you can create journal entry to record the deposit from the previous month and the payment from this month to the correct account. I suggest consulting with your accountant before you begin this process. Your books won't get out of hand because you'll know which accounts to debit and credit.

Click + New.
Select Journal entry.
From the first line, select an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
On the next line, choose the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
Enter information in the memo section so you know why you made the journal entry.
Select Save and new or Save and close.

Also, I have a link that you can read for additional guidance in transactions in QuickBooks Online: Categorize online bank transactions in QuickBooks Online.

Don't hesitate to comment below if you need further assistance in recording payments in QuickBooks Online. I'm always here to help. Have a great day.

View solution in original post

ZackE · ‎November 15, 2023

Thanks for reaching out to the Community, melissa-pennflee.

You can apply your customer's credit to an existing invoice while receiving payment for it.

Here's how:

Use the + New button, then go to Receive payment.
Specify a customer, then their credit and invoice.
Choose a pending invoice, then enter your overpayment amount in its Payment column.
Select Save and new or Save and close.

You can also configure your account settings so credits are applied to future payments automatically:

Use the Gear icon, then go to Account and settings.
Access your Advanced tab.
In the Automation section, click Edit.
Select Automatically apply credits.

I've also included a detailed resource about working with credits/overpayments which may come in handy moving forward: Handle a customer credit or overpayment

If there's any additional questions, I'm just a post away. Have a lovely day!

melissa-pennflee · ‎November 16, 2023

Thanks for your reply. This would have worked if I had accurately explained that we have multiple systems and how they integrate.

We are a mechanical/body shop and all of our invoices and payments received are posted into a job costing system called PNet. These postings are then pushed from PNet into QBO.

We received a payment from this customer this month to pay for 9 invoices that total $6,069.28. However, they only sent us $2,765.05 via ACH to our bank account and I need to apply the $3,304.23 that was deposited in a prior month and is sitting on their customer account as a credit.

I’m wondering if I need to post a journal entry that will clear last month’s “deposit” of $3,304.23 and then use the opposite line of that journal entry to “apply” the credit they have with us. I need to be able to make the “bank deposit” of $2,765.05 by using the “payments received” of $6,069.28 with the “credit” of $3,304.23 to make it all add up.

This is quite convoluted, but it’s how our shop works and we often have customer pay wrong amounts that span different accounting periods. This one is leaving me stumped. Any help is greatly appreciated. Thanks.

Ethel_A · ‎November 16, 2023

Hello there, @melissa.

Yes, you can create journal entry to record the deposit from the previous month and the payment from this month to the correct account. I suggest consulting with your accountant before you begin this process. Your books won't get out of hand because you'll know which accounts to debit and credit.

Click + New.
Select Journal entry.
From the first line, select an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
On the next line, choose the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
Enter information in the memo section so you know why you made the journal entry.
Select Save and new or Save and close.

Also, I have a link that you can read for additional guidance in transactions in QuickBooks Online: Categorize online bank transactions in QuickBooks Online.

Don't hesitate to comment below if you need further assistance in recording payments in QuickBooks Online. I'm always here to help. Have a great day.

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I had to make a bank deposit for a customer overpayment to match our bank records. It was not a credit memo. How do I now use these funds to pay towards an invoice?