In Manager, sales invoices can become overpaid when more has been received or posted against it than the original total of the invoice. This results in the Balance due for the invoice showing as a negative amount. Manager will display Overpaid in the Status column of the main Sales Invoices tab listing:
There are many reasons an invoice could become overpaid:
- The customer paid more than the invoice total.
- A receipt from a customer was allocated to the wrong invoice.
- A credit note was posted to an already-paid invoice.
- A receipt was posted to a correct invoice to which Manager had already distributed money automatically because an invoice was not selected during a previous receipt entry.
Overpaid invoices are considered bookkeeping errors. Manager will display overpaid invoices at the top of Sales Invoices tab listing so you can see and resolve them. You should resolve overpaid status before sending out customer statements.
Viewing the sales invoice ledger
To determine the specific reason a sales invoice is overpaid, view the ledger for that invoice. To access the ledger, click on the blue amount under the Balance due column in the tab list:
This will reveal all transactions posted against the specific invoice (including the invoice itself) and a running balance:
Resolving overpaid status
Resolve overpaid status by editing one or more of the transactions in the invoice ledger.
Example
You issued a sales invoice to Bob’s Hardware for 1,000. By mistake, Bob paid you 1,100, resulting in overpayment of 100 on the invoice. To resolve this issue, you edit the transaction where you recorded the receipt of 1,100 and split the amount so only 1,000 is allocated to the invoice and 100 remains unallocated:
After the transaction is updated, the invoice status shows Paid in full:
The unallocated 100 is applied to any other unpaid invoices Bob’s Hardware has, oldest due date first, or remains as a credit to be applied to future invoices.
Careless mixing of automatic and explicit allocations can also result in overpayment of a sales invoice. When you record a receipt from a customer, but do not specify the invoice, Manager automatically allocates the transaction to the unpaid invoice with the oldest due date. But if the transaction was intended for a specific invoice, it should normally be recorded that way. Problems can arise as later receipts are entered, because automatic allocations could be adjusted without any action on your part, with confusing results. So close attention to invoice allocations is good practice, with explicit allocation usually, but not always, being the best approach. Below is an interesting example.
Example
ACME Distributing has two unpaid sales invoices. The first is for 5,000 and the second for 150. The 5,000 invoice has the older due date of the two:
ACME pays 150 without designating which invoice the payment applies to. You record this receipt, allocating it manually to the first, older invoice. This decreases its balance due from 5,000 down to 4,850, while keeping the balance due on the second invoice unchanged:
A few days later, you receive 5,000 with a remittance advice specifying the payment is for the earlier invoice. If you allocate 5,000 to the first invoice, you would end up with overpayment of 150 on first invoice and the balance due still being 150 on the second invoice:
Obviously, ACME doesn’t owe you anything and has not overpaid. Your mistake was allocating the 150 receipt to a specific invoice when the customer did not intend that. So you should click on the negative Balance due amount, find the payment of 150, and delete the invoice allocation. Manager will automatically reallocate the 150 to the unpaid invoice. Now all invoice balances are shown correctly and the customer’s Accounts receivable balance is correct:
