What happens when a client overpays an invoice in AR
If a customer overpays their invoice, the overpayment amount can be held as a credit on their account, to be applied later to a future invoice. The overpayment is held in a GL account specified in Accounts Receivable / Setup / Configure Accounts Receivable:
Under Accounts Receivable / Receive a payment, select the customer and bank accounts as normal, and then enter the amount of the receipt, and apply to the outstanding invoice. Any overage will show up as an overpayment. Set the Overpayment Department and Overpayment Location if necessary.
The customer account now has a balance on it:
When another invoice is processed and the overpayment is to be applied to that invoice, go back into Accounts Receivable / Receive a Payment. A box 'Available Overpayments and Advances' will be displayed where the overpayment can be selected to apply to the invoice.