Hi there, @sarah17.

You might have entered the payment along with the invoice transaction, that's why it was not recorded as a Credit memo. I can show you the way to correct this. First, you'll have to delete the payment transaction. Then, re-create it and enter the total amount paid in the Amount received box. I'll also include how you can match this transaction on the Banking page. That way, we can ensure that the transaction is cleared.

Here's how to re-create the payment:

1. Go to the +New button and choose Receive payment.
2. Enter the customer's name and tick the box beside the invoice transaction.
3. Enter the total amount paid in the Amount received field. Note: After entering the amount, you'll see in the sub-total field that there's an Amount to credit, that is the excess payment of the customer.
4. From the Deposit to field, click the drop-down button, and choose Undeposited Funds.
   
   
    
5. Select Save and close.

Once done, you can deposit the customer's payment. I'll show you the steps below.

1. Navigate to the +New button and select Bank deposit.
2. Select the account you want to deposit the payment.
3. Tick the box beside the customer's payment.
4. Select Save and close. This is how it looks like:
   
   

Then, you can match this if the payment transaction is already downloaded on the Banking page. You can refer to the steps below.

1. Go to the Banking menu and select the bank where your customer's payment has been deposited.
2. Find the transaction with the correct details. QuickBooks will automatically detect the transactions that matched with the downloaded ones from the bank. A green mark will show on the transaction.
   
   
3. Click the transaction and verify the details.
4. Select the Match button.

You can also review the process in this article: Categorize and match online bank transactions in QuickBooks Online.

When you're ready to assess your business financials, you may consider checking out this article: Reconcile an account in QuickBooks Online. This contains a video tutorial and tips on how to fix any issues during the reconciliation process.

Please don't hesitate to tag my name in the comment section below if you need further assistance. I'd be happy to help you succeed. Take care and have a blessed day!