Overpayment of invoice

I have a customer that has paid an invoice for more than what was billed. In our old system we could overwrite the amount when we posted the payment and that we create a credit on their A/R. Is this an option when applying payments? Or do I need to create a j/e?

Rookie Asked on August 17, 2022 in Accounting.
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2 Answer(s)

Just issue a credit memo for the over payment amount. Then apply the credit memo to future invoices or issue refund

Advanced Answered on August 18, 2022.
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When you apply the payment to the invoice only the amount of the invoice will be credited, leaving the overpayment as a general credit to A/R for that Customer.  You can use Customer Refund to issue a refund check.  Or leave it there to apply to a future invoice.  (The credit memo solution suggested in the previous post won’t work, unless you’re trying to write-off and keep the overpayment as misc income in which case I still wouldn’t do that as a credit memo.  In most states that’s actually illegal and you have to escheat that overpayment to the state after 2 years)

Rookie Answered on August 27, 2022.
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