Customer Overpayment
A customer overpayment occurs when a customer pays more than the amount due on an invoice. This can happen due to duplicate payments, rounding differences, or a customer intentionally prepaying. In Rillet, overpayments are recorded as a liability until refunded or applied to a future invoice.
Set Up Accounts and Products
Before processing overpayments, you must configure the liability account and the product used to track overpayment credits. This ensures that all adjustments are properly reflected in the general ledger.
Follow these setup steps:
Go to your Chart of Accounts and create a Liability account for customer overpayments.
Go to Products and create a Non-Revenue product called Overpayment Credit. Assign it to the overpayment liability account.
Record an overpayment
When processing a payment that exceeds the invoice balance, Rillet allows you to record the extra amount as a liability.
To record an overpayment:
When matching a payment greater than the invoice total, select Match & Adjust.
Use the Customer Overpayments account for the adjustment and click Create and Match.
This creates a liability for the overpayment amount.
Create a customer credit (optional)
If your workflow requires issuing a credit memo for the overpayment, you can create a credit directly from the customer’s profile.
Go to the Customer’s profile and Create Credit Memo.
Use the Overpayments Credit product.
Set the Revenue Recognition dates to match the Credit Memo Date.
This creates an unpaid credit on the Customer’s profile.
Note: This step is optional and only needed if you are refunding the credit memo directly to the customer.
Refund an overpayment
If you decide to return the overpayment amount to your customer, there are two ways to record the refund depending on whether a credit memo has been created.
Available 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 Cash Reconciliation.
Apply an overpayment to a future invoice
If the overpayment is not refunded, it can be applied as a credit toward a future invoice.
To apply the credit:
Go to the Customer’s profile and select the Credit Memo tab.
Locate the overpayment Credit Memo and click the three-dot icon.
Select Apply to Invoice.
Choose the invoice where you want to apply the Credit Memo.
Click Apply.
The Credit Memo will be applied to the selected invoice and reduce the balance due.
See also
For related actions you can take when handling overpayments, see the following articles:
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