My client overpaid an invoice outside of Wave

My client overpaid me, and I use Wave's online payments feature

My client overpaid an invoice outside of Wave

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

Refund your customer

Manually record a payment to the invoice for the full amount, then apply a refund for the amount of the overpayment. Return the extra funds to your customer outside of Wave. Learn how to refund a payment.

Apply the overpayment to an existing invoice

To apply the overpayment to an existing invoice, split the transaction.

      1. On the left-side menu, click Accounting > Transactions.
      2. Find the transaction, or click Add income to create a new transaction.
      3. Enter the full payment you received in the Amount box, then click Split Transaction.
      4. In the top section, enter the invoice amount and categorize this as Payment Received for an Invoice in Wave, then select the relevant invoice.
      5. In the bottom section, enter the amount that was overpaid. Categorize this as a Payment Received for an Invoice in Wave and select the existing invoice to apply the funds on.

Create a credit for a future invoice

Create a new liability account in your Chart of Accounts under Customer Prepayments and Customer Credits to act as a customer overpayment account. Learn how to add accounts.

On the Transactions page, split your payment transaction as shown above and categorize the bottom section to your customer overpayment account. This indicates the money is being held to apply against future services.

When you next invoice your customer, re-categorize the bottom section of the split transaction as a Payment Received for an Invoice, and select the new invoice. Without this step, if the timeframe between the overpayment and the future invoice crosses into the next month, it will make reconciliation difficult.

My client overpaid me, and I use Wave's online payments feature

In this case, you have a few options:

Within 90 days, 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 your client doesn’t want a refund and prefers you to put the extra money towards another invoice or future services, you need to reduce the amount of the invoice payment to balance everything. Invoice payment transactions for payments processed by Wave are created automatically by the system, which means they can't be edited or deleted. Instead:

      1. Create a short-term liability account to record the overpayment. Wave doesn’t track who the funds belong to, so we suggest naming the account something like Invoice Overpayment - Customer’s Name. Learn how to add accounts.
      2. On the left-side menu, navigate to Sales & Payments > Invoices.
      3. Click on the overpaid invoice to open it.
      4. Click Record a payment. In the Amount field, Wave enters the overpaid amount as a negative value by default.
      5. In the Method drop-down select Other payment method, and in the Account drop-down select the overpayment account you created. Ensure the date is the same as the date of the original invoice payment.
      6. Click Submit.

This will balance the overpaid invoice. To apply the overpayment to a different invoice:

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