Thank you for the prompt reply, @gmoran59. I'll help clear things up for you about customer overpayments in QuickBooks Online (QBO).

The way you deal with a customer's overpayment depends on what he wants to do with it. If he wants a refund, then you need to create an expense or a check. Otherwise, you create a credit note. 

As for the credit note, you have two options for it. You can apply it on a different invoice:

1. Go to the + New menu, then select Receive payment.
2. Choose the customer in question, then the credit note and the invoice.
3. Tick the box of another pending invoice where you want to apply the credit note. Enter the overpayment amount in its Payment column.
4. Hit Save and close.

Or, use it on a new invoice:

1. Move to the + New menu, then select Invoice.
2. Proceed with creating the invoice, then press Save.
3. Click the Receive payment button.
4. Tick the box for the credit note in question then hit Save and close.

In your situation, you can include the overpayment in the Receive Payment screen. There isn't a need to manually create a credit note for this process, since the system will automatically create it for you. Edit the Amount received box to including the overpayment, and only select the invoice in question. You'll get the pop-up message asking if you want to Save it as a credit.

See the screenshot below for your reference:

Additional information about this process is in this article: Handle a customer credit or overpayment in QuickBooks Online. 

In case your customer considers an overpayment as a tip, you can view this article for the steps: Record an invoice overpayment as a tip.

Feel free to post a reply in the comments below if you have other questions. I'll be sure to get back to you. Have a nice day!