Have you ever had a client overpay an invoice? In this situation, you have two options: you can refund them the difference, or you can apply that overpayment towards future services. If you want to apply those funds to future invoices, how you bookkeep that will depend on several factors. We’ll break it down below.
My client paid me an intentional deposit
If you provide your client with ongoing services and invoice them on a regular schedule, your client may choose to pay several invoices in advance.
The easiest way to reflect this is by splitting the payment to record it against future invoices. If you’d planned to invoice your client $1000 per month from April to June, for example, but your client has paid you the $3,000 up front in April, the first step is to make sure you’ve created the three invoices, one for April, May, and June.
When the payment is recorded, or imported from your your bank connection, split the payment into three and record each split transaction against the related invoice.
If this situation seems familiar, you might want to consider using Wave Checkout, which allows you to offer a package of services to your clients through an easy link.
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