Recently a client wanted me to show her how to process an overpayment in Xero. I had to explain this via screenshots so I thought that I should put these together in a blog as it could be useful for someone else. I know Xero have many how-to videos on this sort of thing, but sometimes it’s easier to see a step-by-step list rather than remember what you saw in a video. So here goes….
If a customer overpays your invoice, you can easily process this situation via the Xero bank feed. See below for step-by-step instructions:
In the bank feed, find the invoice that relates to your customer’s payment and select it. Then click on “New Transaction”.
From the drop list under “New Transaction”, choose “Receive Money”.
When the next window opens, under “Direct Payment”, choose “Overpayment”.
Enter your details into this transaction as required, including the overpayment amount and click on “save transaction”.
Now you will see that Xero has selected both the original invoice plus the overpayment transaction you just created and voila, the transaction can now be reconciled. All there is to do now is click on “OK” and you’re done. When the customer next pays you, you can use the overpayment amount as a “credit” towards the total amount owing.
And that’s how it’s done! As usual, if you need any help with processing your accounts whether it be Xero or another software, please get in touch.