Write Over Payment Invoice For Free

If your contract allows you to apply to other outstanding invoices or to hold as an open unapplied credit, then that would be ok. Otherwise, it should be refunded to the customer or just obtain the customer's permission to apply to other invoices.

Generally speaking, for the overpayments you could record an invoice for the overpaid amount and allocate it to a rounding income account, then you would apply the overpaid amount to that invoice created.

Example: Employee A was paid $500 on their check for the 1/31 pay period. Employee A should have been paid $400. This results in a gross overpayment of $100.

Use a credit balance adjustment to apply the overpayment as a payment to subsequent invoices. Use a negative invoice charge to apply the overpayment as a credit to a future invoice.

If the invoice is from a regular supplier, the easiest solution is often to apply the overpayment to a new or existing invoice. Other options include refunding the overpayment or being given a credit note that you can allocate against a future invoice.

What is an overpayment? An overpayment is defined as any payment that is larger than the invoice's outstanding amount. This can occur if the wrong amount is paid, or if an invoice is accidentally settled twice.

Provide a Refund Businesses often issue overpayment refunds in the same format as the customer provided payment. For example, if your customer paid by check, you may return a check for the overpayment refund. If he paid by credit card, however, you can usually issue a refund directly to the card.

Use a negative invoice charge to apply the overpayment as a credit to a future invoice.