I appreciate you bringing up the invoice overpayment issue, @SammTax. I will outline the steps for recording this in QuickBooks Online (QBO).
Once an overpayment is recorded in QuickBooks, the system will treat this as a credit and will remain open until a new invoice is created.
To avoid this, you can refund your customer's overpayment via Cheque or Expense transactions. This reduces your bank's balance and offsets the customer's open credit, overpayment, or prepayment. Here's how:
- Click the + New icon.
- Select Expense or Cheque.
- Pick the customer you want to refund from the Payee ▼ dropdown.
- From the Payment Account ▼ dropdown, select the bank account where you deposited the overpayment.
- On the first line of the Category column, select Accounts Receivable.
- Enter how much you want to refund in the Amount field.
- Fill out the other fields as you see fit, and Save and Close.
After that, link the refund to the customer's overpayment. Feel free to follow the steps below:
- Go back to the + New and select Receive payment.
- Choose the same customer you used for the cheque or expense when recording the refund.
- Fill out the other fields as you see fit.
- Under the Outstanding Transactions section, tick the box for the Expense or Cheque you created when recording the refund. If you have automation to apply bill payments turned on, this step is done for you.
- Make sure the payment is the same as the open balance, then select Save and Close.
For more information, check out this article: Handle customer overpayments in QuickBooks Online.
If you want to learn how to pair up your real-life bank balance and QuickBooks balance, you can visit this article: Match online bank transactions in QuickBooks Online.
In case you have additional questions about handling invoice overpayments. We'll be happy to assist you. Thank you, and we hope you have a great day.
