Credit balance on invoice

I issued an invoice for £115 and the client paid me £120 so when i entered the bank transaction as payment against an invoice I now have the invoice marked as paid but it is showing a balance of -£5.00. So how do I remove that -£5.00 from the invoice and apply it to the next invoice for that Client.
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  • Hi Ian

    The best way to deal with customer overpayments is to split the transaction and explain the invoice amount and the overpayment separately.

    For example, say the invoice is for £1,000 including any VAT, and your customer paid you £1,030, you would split that transaction like this http://www.freeagent.com/support/kb/b...

    So you would change the amount of the receipt from £1,030 to £1,000, and explain this as a receipt against that invoice like this http://www.freeagent.com/support/kb/i...

    The software would then put in an automatic extra transaction of £30 to make sure your bank account balances.

    If this is to be allocated to the next invoice you can explain the overpayment as a receipt against that invoice. However, if you're not sure whether you will be allocating it to a future invoice or paying it back to your customer, the best way to explain the overpayment is with type Other Money In and reason Receipt to Contra Account. Use the description to reflect who the overpayment relates to.

    If you then issue another invoice to your customer which you are going to set the overpayment against, you can go back to the transaction that you have explained to the Contra Account and change it to an Invoice Receipt. Be careful though, you won't be able to do this if the overpayment is in a VAT locked period. If that happens, please contact us again for help.

    I hope this helps but please do feel free to get back in touch if you get stuck.

    Kind regards

    Janice
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  • Hi Janice,

    I appreciate that this is the best way to deal with it... but what should we do if we forgot to do this?

    We had a client overpay by 38p a while ago, and unfortunately assigned the entire amount to their invoice without splitting the transaction.

    This is now in a locked period, the invoice states it is overpaid (in poke-you-in-the-eye red), and I can't seem to see what I can possibly do about it!

    TIA.
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  • Hi Christian

    If you can email us at support@freeagent.com and we can have a look - we may be able to change that for you if it's in a locked period.

    If there is another invoice to which it can be explained to we can change it, or can change the overpayment to 'Sales' for example.

    Many thanks

    Janice
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