Account for invoice overpayments

When a client pays you more money than is due on the invoice that was sent, this is an overpayment. You have three options to handle the overpayment:

• Refund your customer
• Apply the overpayment to other existing invoices
• Create a credit for future invoices

Refund your customer

If the payment was received through Wave’s online payments feature, you can refund your client the overpayment and Wave will automatically account for the refund. This will also save you any processing fees on the refunded portion of the payment.

If the payment was received outside of Wave, manually record a payment to the invoice for the full amount. Refund your customer outside of Wave, then record the overpayment as a refund on the invoice.

To record the overpayment as a refund:

1. Open the overpaid invoice.
2. Select Manage overpayment.
3. Select the method you chose to refund your customer (e.g., cash, bank payment, etc.).
4. Select the account from which funds were withdrawn for the refund.
5. Select Submit in your web browser or Record amount as refund in the mobile app.

Apply the overpayment to other existing invoices

If your customer paid a lump sum amount for multiple invoices, you can apply that amount to other invoices. Learn how to apply the overpayment to other invoices in Account for a lump sum invoice payment.

Create a credit for future invoices

If your client doesn’t want a refund and prefers you to put the extra money towards future invoices, you can record the overpayment in a customer credit account.

Create a new liability account in your Chart of Accounts under Customer Prepayments and Customer Credits to record the overpayment. Wave doesn’t track who the funds belong to, so we suggest naming the account something like Customer Credit - Customer’s Name. Learn how to add accounts.

If the payment was received through Wave’s online payments feature, follow these steps to record the overpayment to the customer credit account:

1. Log in to your account at waveapps.com.
2. On the left-side menu, click Sales & Payments > Invoices.
3. Click on the overpaid invoice to open it.
4. Select Manage overpayment. Wave automatically enters the overpaid portion in the Amount field.
5. In the Method field, select Refund via other payment method.
6. In the Account field, select the customer credit account you created.
7. Click Submit.

This makes the balance due on your invoice zero and the overpaid amount is held in the customer credit account to use towards future invoices.

If the payment was received outside of Wave, follow these steps to mark your invoice as paid and record the overpayment to the customer credit account:

1. Log in to your account at waveapps.com.
2. On the left-side menu, click Accounting > Transactions.
3. If you import transactions into Wave, locate the income transaction. Click on the dropdown arrow to the right, then select Edit more details. Or, create an income transaction and fill in the details.
4. Click Split transaction.
5. In the top section, enter the invoice amount and categorize this as Payment Received for an Invoice in Wave, then select the relevant invoice.
6. In the bottom section, enter the amount that was overpaid and categorize it to the customer credit account you created.
7. Click Save.

This marks your invoice as paid and makes the balance due on your invoice zero. The overpaid amount is held in the customer credit account to use towards future invoices.

Apply the credit to future invoices

1. Log in to your account at waveapps.com.
2. On the left-side menu, click Sales & Payments > Invoices, then click the invoice you want to mark as paid.
3. Click Record a payment.
4. Enter the amount you want to apply from the customer credit account.
5. In the Method drop-down select Other payment method, and in the Account drop-down select the customer credit account. Select the Invoice Date as the date.
6. Click Submit.