I'm really having an issue regarding the proper way to handle customer overpayments. I have read the online directions on handling overpayments, credit memos, adding a service item, and unapplied payments. All seem to have different directions. I do not want the overpayment to occur in the "unapplied cash payment" account on the P&L.
To simplify: I have an invoice for $500.00, but the client's check shows an overpayment of $400.00.
1. The check is already in the bank but not matched.
2. If I receive the check for $900 and apply it to the invoice for $500. QBO will say that it automatically creates a credit of $400.00 for later use. When I return to the customer, the $400 appears under the last invoice, and there is an unapplied $400.00. Is this when the overage posts to an "unapplied cash payment" account? QBO does not automatically credit a Credit Memo. Is this when I create a CM using the service item code that links with A/R? How do I apply the unapplied amount to the CM w/o duplicating the credit?
Apparently, there are too many ways to handle overpayments, but not all of them are correct. I want to send a credit memo to the customer so he is aware of the CM of $400 on his account.
I can't believe that I struggle with this issue, but I do. Your guidance will really help.
RK
