An overpayment happens when a customer sends more than the total of their open invoices. After the payment is applied to all available invoices, the remaining funds sit as an unapplied balance on the payment. You have two options: apply the remaining balance to a future invoice, or return the funds to the customer as a refund. This guide covers both paths.
Identifying an Overpayment
1. Go to Receivables. Click Receivables in the left sidebar.
2. Find the payment. You can find overpayments in two ways:
Go to the All Open Balance Payments tab to see all payments with unapplied funds across all customers.
Go to Payments by Account, find the customer, and open the payment directly.
3. Confirm the unapplied balance. Open the payment. On the Payment Distribution screen, if an amber notice is visible below the payment summary card, the payment has unapplied funds. The notice shows the exact amount remaining.
đ¸ Screenshot suggestion: The Payment Distribution screen showing the amber unapplied funds callout with the dollar amount and two options: Issue Refund and Apply remaining.
Option A â Apply the Balance to a Future Invoice
Use this option when the customer wants to leave the credit on their account and have it applied the next time an invoice is due.
1. Click Apply remaining. Click the Apply remaining button in the amber callout. This opens the Apply Payment screen.
2. Select the invoice to apply the remaining balance to. If a future invoice is already in the system, it will appear in the invoice list. Check it to apply the remaining funds.
3. Save. Click Save. The unapplied balance moves to the selected invoice and the callout will no longer appear on the payment.
đĄ Note: If no invoices are currently open, you can leave the balance on the payment until a future invoice is ready. It will continue to appear in All Open Balance Payments and can be applied at any time.
Option B â Issue a Refund
Use this option when the customer wants their overpayment returned to them.
1. Click Issue Refund. Click the Issue Refund button in the amber callout. The Issue Refund modal opens, pre-filled with the customer name, the unapplied amount, and the original payment method.
đ¸ Screenshot suggestion: The Issue Refund modal pre-filled with the customer name, source (Payment), and amount from the overpayment.
2. Confirm or adjust the refund details.
Review the pre-filled fields and adjust if needed:
Method â Defaults to the original payment method. Change this if you are issuing the refund via a different method (for example, the customer paid by credit card but wants a check)
On â The date of the refund
Chk Num â If issuing a check, enter the check number
Mailed On â The date the check was or will be mailed
Comments â Any notes about the reason for the refund
3. Add refund items (optional). If you want to document what the refund is for at the line-item level, use the Add Item button in the Refund Items table at the bottom of the form. Enter a description, quantity, and unit price. The Item Total will calculate automatically and the Amount field above will update to match.
â ď¸ Warning: If you manually change the Amount field and it no longer matches the Refund Items total, the system will flag the mismatch when you try to submit. You will be asked to choose which amount to use before the refund is created.
4. Click Issue Refund. Click the Issue Refund button. The refund is created and you are taken to the Refunds tab where you can see the new record with a status of Issued.
After Issuing a Refund
The refund will appear in the Refunds tab register. When the check clears the bank, mark it as cleared. See How to Mark a Refund as Cleared for those steps.