To process an overpayment in QuickBooks, you need to follow the steps that are as follows: 

  • Click the Create menu (+) in the upper-right corner.
  • Choose the option to receive payment.
  • Select a customer in the Receive Payment window.
  • Put a checkmark next to the invoice you want to pay in the Outstanding Transactions section.
  • Enter the exact amount you received from the customer in the Amount received field (including the overpayment).

How do I handle a customer overpayment in QuickBooks online?

To manage your customer’s payment in QuickBooks Online. We can either keep the overpayment and apply it to future invoices from the customer, or we can make a refund for the overpayment. Here’s how to report your customer’s overpayment on their invoice:

  • Click the Create menu (+) in the upper-right corner.
  • Choose the option to receive payment.
  • Select a customer in the Receive Payment window.
  • Put a checkmark next to the invoice you want to pay in the Outstanding Transactions section.
  • Enter the exact amount you received from the customer in the Amount received field (including the overpayment).

How do you record a customer overpayment?

It’s no different when documenting accurate payments if a consumer has overpaid and paid more than the invoice amount. You can follow these steps in QuickBooks Online to record this:

  • Select Sales, then Invoices from the drop-down menu.
  • Select Receive payment after you’ve located the invoice to which you need to apply for the amount.
  • In most cases, the total amount will appear in the Payment field.
  • In the Amount Received section, enter the total amount paid (including overpayment).
  • Choose Save and Exit.

The overpayment will now appear on the customer’s account as a credit.

How do I record a credit card overpayment in QuickBooks?

QuickBooks Online allows you the freedom to deal with any bookkeeping issue that arises in your firm. You may quickly and conveniently record bills, payments, and refunds from your supplier. I’ll show you how to record the overpayment and the reimbursement you received from your supplier. It appears that you have documented the overpayment on your bill by selecting “Make Payment.” Don’t worry, that’s precisely how you should do it! Unfortunately, however, this will negatively balance the vendor’s account. 

We must record the refund from the supplier to eliminate the negative balance. You’ll make a journal entry if your provider has granted you a refund that you’ve placed in your bank account. To use a journal entry to indicate the refund, follow these steps:

  • Select Journal Entry from the drop-down menu after clicking Add New.
  • Select Accounts Payable (A/P) as the Account in the first line. The refund amount should then be credited to this account.
  • Select your Bank Account (whatever account you’ve deposited the return to in real life) in the second line. The refund amount should then be deducted from this account.
  • Select the Supplier who is refunding you in the Name field.
  • Save the file.

Since the cash was refunded back to your card, the easiest way to record this return from your supplier is to utilise the Add New option to record a Credit card credit. As long as the date, account, and amount match, you should be able to match the credit inside the banking feed once it’s been logged. If you can’t locate a match, just leave the transaction out of the bank stream. To do so, check the box next to it and then click Exclude. The only difference in your records is that the transaction will not be ticked off automatically during your monthly reconciliation.

If you want to categorise this transaction differently, I recommend checking with your accountant. Because this was a refund and you didn’t obtain a product or service from your supplier in exchange for the money, documenting it against COGS might not be the best practice.

Summary

To summarise, QuickBooks Desktop software is accounting software that has always remained on the top since the time of its launch. The reason behind this is the continued updation keeping it relevant and number one in all these years. The whole idea of this blog is to help you understand the various aspects of overpayment in QuickBooks and some other factors related to the same. I hope that this blog helped you and was worth your time.

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