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bwaugh1986
Level 2

Old Overpayment on Customer Balance Report

I have an overpayment of $0.01 from a payment in 2018 showing on my Customer Open Balance Report. How do I get the overpayment off of my customer balance report?  I use Quickbooks Enterprise Solutions: Contractor Version 21.0 if that matters. Desktop!

Solved
Best answer June 14, 2021

Best Answers
Giovann_G
Moderator

Old Overpayment on Customer Balance Report

Thanks for providing details, bwaugh1986.

 

I know a way to handle small balances showing as an overpayment in QuickBooks Desktop.

 

There are two ways to remove the overpayment and clear your accounts. First, you can create a General Journal Entry to write off the amount or use discounts to write off the small amount. Before trying any of these options, please reach out to your accountant to ensure your books is accurate.

 

Option 1: Create a General Journal Entry.

 

  1. From the Company menu, select Make General Journal Entries.
  2. In the Make General Journal Entries window, change the date and fill in the entry number if necessary.
  3. In the Accounts field dropdown, choose Accounts Receivable.
  4. Enter the amount under the Debit column, tab to the Name column, and select a Customer Name from the dropdown list.
  5. In the next line, find the offset account and enter the amount under the Credit column. The offset account is usually an Expense account. You can create a new one if you don't have the offset account yet.
  6. Hit Save & Close.

 

Then, apply the General Journal Entry to the Existing Credit/Debit.

 

  1. From the Customers menu, click Receive Payments.
  2. Enter the name of the customer in the Received From field.
  3. Select the invoice and choose Discounts & Credits.
  4. Under the Credits tab, click the available credit and select Done.
  5. Hit Save & Close.

 

Option 2: Use Discounts to write off small amounts.

 

Create a Charge-off Account and Charge-off item. 

 

These are the steps for Charge-off Account:

 

  1. From the Lists menu, choose Chart of Accounts.
  2. Select the Account button and choose New.
  3. Click Income, then Continue.
  4. Enter Minor A/R and A/P Charge-Off in the Account Name field and hit Save & Close.

 

Here's how for Charge-off item:

 

  1. From the Lists menu, choose Item Lists.
  2. Select the Item button and choose New.
  3. Click Other Charge as Item Type and hit Continue.
  4. Enter Minor Charge-Off in the Item Name/Number field.
  5. Choose Non-Taxable Sales in the Tax Code field.
  6. Select Minor A/R and A/P Charge-Off in the Account field.
  7. Click OK to save and create the item.

 

Then, apply the Charge-off Account created to clear the small amount.

 

  1. From the Customers menu, choose Create Invoices.
  2. Click the customer name in the Customer: Job field.
  3. Select Minor Charge-Off in the Item field and enter the amount of overpayment.
  4. Hit Apply Credits.
  5. Select the credit in the Available Credits section (The amount of credit should match the amount of invoice).
  6. Click Done to close the Apply Credits window.
  7. Hit Save & Close.

 

Feel free to review this guide here for your reference: Write off customer and vendor balances. This contains detailed steps with screenshots of the process.

 

For more insight, you may want to check this resource: Give your customer a credit or refund in QuickBooks Desktop for Windows. This is the other way of giving the money back or issue a credit to your customers.

 

Just click the Reply button if you have follow-up questions about the overpayments. I'll get back to you as soon as possible. Stay safe!

View solution in original post

1 Comment 1
Giovann_G
Moderator

Old Overpayment on Customer Balance Report

Thanks for providing details, bwaugh1986.

 

I know a way to handle small balances showing as an overpayment in QuickBooks Desktop.

 

There are two ways to remove the overpayment and clear your accounts. First, you can create a General Journal Entry to write off the amount or use discounts to write off the small amount. Before trying any of these options, please reach out to your accountant to ensure your books is accurate.

 

Option 1: Create a General Journal Entry.

 

  1. From the Company menu, select Make General Journal Entries.
  2. In the Make General Journal Entries window, change the date and fill in the entry number if necessary.
  3. In the Accounts field dropdown, choose Accounts Receivable.
  4. Enter the amount under the Debit column, tab to the Name column, and select a Customer Name from the dropdown list.
  5. In the next line, find the offset account and enter the amount under the Credit column. The offset account is usually an Expense account. You can create a new one if you don't have the offset account yet.
  6. Hit Save & Close.

 

Then, apply the General Journal Entry to the Existing Credit/Debit.

 

  1. From the Customers menu, click Receive Payments.
  2. Enter the name of the customer in the Received From field.
  3. Select the invoice and choose Discounts & Credits.
  4. Under the Credits tab, click the available credit and select Done.
  5. Hit Save & Close.

 

Option 2: Use Discounts to write off small amounts.

 

Create a Charge-off Account and Charge-off item. 

 

These are the steps for Charge-off Account:

 

  1. From the Lists menu, choose Chart of Accounts.
  2. Select the Account button and choose New.
  3. Click Income, then Continue.
  4. Enter Minor A/R and A/P Charge-Off in the Account Name field and hit Save & Close.

 

Here's how for Charge-off item:

 

  1. From the Lists menu, choose Item Lists.
  2. Select the Item button and choose New.
  3. Click Other Charge as Item Type and hit Continue.
  4. Enter Minor Charge-Off in the Item Name/Number field.
  5. Choose Non-Taxable Sales in the Tax Code field.
  6. Select Minor A/R and A/P Charge-Off in the Account field.
  7. Click OK to save and create the item.

 

Then, apply the Charge-off Account created to clear the small amount.

 

  1. From the Customers menu, choose Create Invoices.
  2. Click the customer name in the Customer: Job field.
  3. Select Minor Charge-Off in the Item field and enter the amount of overpayment.
  4. Hit Apply Credits.
  5. Select the credit in the Available Credits section (The amount of credit should match the amount of invoice).
  6. Click Done to close the Apply Credits window.
  7. Hit Save & Close.

 

Feel free to review this guide here for your reference: Write off customer and vendor balances. This contains detailed steps with screenshots of the process.

 

For more insight, you may want to check this resource: Give your customer a credit or refund in QuickBooks Desktop for Windows. This is the other way of giving the money back or issue a credit to your customers.

 

Just click the Reply button if you have follow-up questions about the overpayments. I'll get back to you as soon as possible. Stay safe!