Overview 

A Customer Overpayment occurs when a customer pays more than they were billed. As a result, the Cash Receipt will continue to have a balance after being applied to the original Billing. 

 

If a customer overpayment is small and immaterial you may wish to simply keep it rather than taking the trouble to refund it. In this case please take the following steps:

1. Create a Billing for the customer. Set the GL Account on the Billing Line to sales or miscellaneous revenue account. Post the Billing.
2. Navigate to the Cash Receipt with the overpayment. Apply the balance of the Cash Receipt to the overpayment.

Refund an Overpayment

1. Create a Billing for the customer. Set the GL account on the Billing line to a balance sheet clearing account such as "Accrued Expenses." You may want to create a specific GL Account for this use case. Post the Billing.
2. Navigate to the Cash Receipt with the overpayment. Apply the balance of the Cash Receipt to the overpayment.
   Note: Ensure that the Account Type is marked as Customer and Vendor.
3. Create an Account Payable for the same amount in step 1. Set the GL Account on the Account Payable Line to a balance sheet clearing account used in step 1. Post the Account Payable.
4. Create a Cash Disbursement by following the standard instructions for creating a single or batch Cash Disbursement(s).