Overpayment by customers can present unexpected hurdles, ranging from accounting balance. In this blog, we will explore the process of resolving overpayments made by customers.
Consider a scenario where we have a $2,000 invoice and receive a payment of $3,000, which we record in Payment/Receipt Entry using the Transaction Type Check Receipts (RECCH) function located under A/P-A/R Accounting, Payments. We received $1,000 overpayment amount.
To handle the overpayment issue follow the below steps:
Step 1: We created a direct invoice for the specific customer, matching the amount of the overpayment as shown in the image below.
Fig 1. Direct Invoice
Step 2: Create a direct check against overpayment invoice. Go to
A/P-A/R accounting > Payments > Payment/Receipt entry > RECCH check receipt
Fig 2. Check receipt for overpayment
Step 3: To settle $1000 overpayment in journal entry. Go to Financials > journals > Journal entry.
Fig 3. Journal Entry transaction
Step 4: Go to Financials > Matching > Manual Matching. Select site, Account 12100 (AR) and customer. In the detail section select $2,000 invoice and the $2,000 of the payment and click on Matching button.
Step 5: Now we will create a check for the overpayment of $1000. Go to
A/P-A/R accounting > Payments > Payment/Receipt entry > PAYAT USA
Fig 4. Check against payment
Step 6: Go to Financials > Matching > Manual Matching. Select site, Account 12100 (AR) and customer. In the detail section select $1,000 Payment and the $1,000 of the Overpayment and click on Matching button.
Fig 5. Manual Matching
By understanding the complexities surrounding overpayment and implementing proactive strategies for managing them, maintain trust with customers, and uphold their financial integrity. In a landscape where every transaction matters, handling overpayments with care is not just a matter of good business.
