Excess payments typically happen in three situations: a customer pays a round number that is slightly more than the invoice total, a customer pays an invoice twice by mistake, or a customer pays before receiving a credit note that reduces what they owe. In all cases, Zoho Books records the full payment received, applies it against the open invoice, and holds the remainder as an unapplied credit against the customer.
Open the customer record in Zoho Books and look at the Excess Payments section. You can click Apply to Invoice and select any open invoice for that customer to apply the credit. This reduces the open balance on that invoice without requiring a new payment. If the customer prefers a refund, record a journal entry or bank transfer debiting the customer’s credit account and crediting your bank account.
Until applied or refunded, an excess payment appears as a liability (advance received from customer) on your Balance Sheet. The Accounts Receivable Aging Report will show a negative balance for that customer if the excess exceeds their other open invoices. This is a visual flag to follow up and clear the balance promptly.
Excess payment in Zoho Books occurs when a customer pays more than the outstanding invoice amount. Zoho Books records the surplus as a credit balance against that customer, which can be applied to future invoices or refunded.
When a payment received exceeds the invoice total, Zoho Books automatically creates an excess payment credit against the customer’s account. This credit can be applied to future invoices with one click or refunded via a journal entry.
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