Customer Overpayment

Customer overpayments occur when a customer pays more than the amount due on an invoice. This can happen due to various reasons, such as:

• The customer mistakenly enters a higher payment amount.

• Duplicate payments are made.

• Rounding differences in currency conversion.

• The customer intends to prepay for future services.

Since you have received more money than billed, the excess amount is recorded as a liability until it is refunded or applied to a future invoice.

In this article we will walkthrough the reccomended steps for recording overpayments in Rillet

Setting Up Accounts & Products

First, we will set up the proper objects in Rillet to ensure proper recording.

Create a Customer Overpayment Account

In your Chart of Accounts, create a Liability account for your customer overpayments

For example:

Create an Overpayments Product

In your Product listing, create a product for Overpayment Credit using a Non-Revenue product. The Account used should be the same account that was created above.

Now you're all set to record an overpayment!

Recording an Overpayment

When matching a payment where the bank transaction amount is > the invoice total, you will see the option for Match & Adjust:

Click Match & Adjust and then user the Customer Overpayments Account for the adjustment.

This will create a liability for the amount of the overpayment.

Optional: Creating a Customer Credit

Navigate to the customer's profile and create a new credit memo using the Overpayments Credit product. The revenue recognition dates can be the same as the Credit Memo Date.

This will create an unpaid credit on the Customer's profile

That this step is option if you are refunding the credit memo directly to the customer.

Refunding an Overpayment

When you refund the customer you have two options:

• Record the refund as a Quick Entry to Customer Overpayments (if no credit has been created).

• Match the refund to the Customer's Credit Memo in the Cash Reconciliation

Applying an Overpayment to an Invoice

When the customer has a future invoice created, you can then apply the Overpayment Credit Memo to the future invoice

This application will reduce the amount due from the customer on the new invoice.