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Video instructions and help with filling out and completing How Form 843 Overpayment

Instructions and Help about How Form 843 Overpayment

This video covers what happens when a customer pays more than what is owed it also covers how to handle discounts for early payments when you record a customer payment that's more than the full amount of the invoice QuickBooks ask you how you want to handle the overpayment and I'm going to show you two scenarios one way the customer has only one outstanding invoice and makes an overpayment and the other where the customer has more than one outstanding invoice first the customer with one invoice so let's choose it from the customers menu go to customers and then go to receive payments we'll choose the customer dante Dallara he paid nine hundred instead of the 886 so we'll type 900 and press tab and enter the check number here you can see the QuickBooks has selected the invoice and applied the 886 to the invoice and indicates that there's an overpayment of $14 when you choose leaves the credit to be used later and save the payment QuickBooks will give the customer a credit the next time you create and save an invoice for the customer QuickBooks will mention that there is a credit available and ask what you want to do if the customer prefers a refund select this option refund the amount to the customer and QuickBooks will create a refund using the payment method that you choose but let's leave it as a credit to be used later ok on to the second scenario let's click Save and new and QuickBooks reminds you that there is the overpayment and you could print the credit memo right away or you could use the credit later when you create the invoice so let's just click OK ok the next customer is Chester Raines and just are paid four hundred and seventy-five instead of the three hundred and sixty invoice amount so we'll enter four seventy-five and write the check number and here you can see the QuickBooks applied the full amount to the oldest invoice and applied the excess amount to the second-oldest invoice at the bottom QuickBooks tells you there's an underpayment on the second invoice and shows you the amount of the underpayment you have the option of leaving it as an underpayment or writing off the extra amount and those were discussed in a another video so we'll leave it as leave as an underpayment and QuickBooks applies the partial payment to the second invoice and keeps the remaining balance in your accounts receivable but what if the customer or you prefer to use it as a credit for later you could uncheck the second invoice and QuickBooks shows you that there's now an overpayment and you can leave it as a credit but let's go back okay quick save and close if you offer discounts for early payment QuickBooks keeps track of those discounts and you must apply the discounts when available for example if your payment terms are something like 1% 10 net 30 that means you give a 1% discount if you receive the payment within 10 days so let's open the customer center and choose Morris Shaw and you can see that the terms are 2 percent 10 net 30 so let's receive a payment from Morris receive payments notice that there's a discount date column and QuickBooks says this customer has discounts available so to see the discounts click discounts and credits clip Brooke shows you the amount of the discount based on the payment terms with the customer but you could change this amount if needed for example when a customer pays early but does not pay the full amount here you would choose the income account you used to track discounts although you might think of a discount as an expense it's considered negative income and QuickBooks posts the amount to the discount account as a negative number so it actually reduces your income so click discounts and you could select a class but I'm going to click done and save anyway and QuickBooks adds a discount column and displays the discount amount if the customer paid in full the discount now would show up as an overpayment and it's probably easiest to leave it as a credit to use later but often a customer will take the discount even when the discount date has passed most companies accept the payment as is anyway in the name of goodwill we just changed the date and the amount to show you what this would look like so first I'll clear this one and open a new one so we'll choose the customer and I'll change the amount to what the customer paid which was 377 and I'll change the date to January 24 and press tab in this case QuickBooks does not add a discount column because the discount date has passed and it shows an under payment amount of $8.00 when you click discounts and credits QuickBooks displays zero as the amount of the discount to track this discount correctly enter the amount of the discount which was eight dollars that the customer took and choose the discount account and click done save anyway and now there is no over or under payment and the discount column is now added and says eight dollars one less thing let me show you how the automatically calculate payments preference comes into play so let's click Save and new and save anyway because I didn't assign a class and choose Floyd so for this company file because that preference automatically calculate payments is checked you can choose the invoice here and QuickBooks will remind you about the preference and you could turn off the preference here by clicking no but let's click yes so you would select the invoice here without entering the amount and QuickBooks enters the amount for you as you select or deselect the invoices the amount changes so if you turn off this preference.

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