Refund an Overpayment to a Customer

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"My customer overpaid me. How do I apply their payment and refund the customer?"

If the contract has not been invoiced in full, then:

1.	You may apply the full amount of the check to the invoice which will leave you with a credit balance on the invoice. This can be helpful if you have not billed the contract in full. By the end of the your contract, the customer may realize their error and shortpay you on the next check.

If the contract has been invoiced in full, and the final payment amount is more than the invoice, then:

1. Enter a backcharge cash receipt for the amount overpaid and code it to the job with a phase and job expense account of your choosing. Once posted, this entry will debit the Accounts Receivable account and show up as a credit on the job/phase/expense.

2. Enter a payable invoice to the customer to the same job/phase/account used in Step 2. This will post a debit on the job; the total of the two entries will net to zero on the job.

3. Issue the check to the customer for the overpayment.