What are Overpayments in QuickBooks Online


A batch payment 'Overpayment' will go through the following 3 steps when created:
  1. Create an invoice for payment (liability debit to take up the liability and allow for payment via Wise-Pay clearing account)
  2. Create a credit note (liability credit from prepayment account to credit note)
  3. Apply credit note (to future invoices)
  4. (User initiated) Payment sync will then apply payment to ConnectWise invoice (applied liability from credit note to invoice - revenue)
Note: a credit note created by Wise-Pay for the purpose of Overpayments created by Wise-Pay will sync back to ConnectWise as part of the Payment sync.  You will not need to create any further transactions in ConnectWise.  Wise-Pay created Overpayments will also sync as payments to ConnectWise as is the case for pre-payments created directly in the accounting system.

Example

Invoice transaction

Purpose: the function of the invoice transaction is to take up the liability, and allow a payment to be applied to the invoice in the same way as a normal payment would.
An invoice is created for the company making payment, with Wise-Pay then allocating the amount of money collected to the user defined Wise-Pay Prepayments account.  The payment of this invoice is applying against the Wise-Pay payment account.  This then allows funds to be reconciled in the same way as any other deposit being allocated to the payment account (such as the process for Wise-Pay Clearing)


Credit Note Transaction

Purpose: The purpose of the credit note transaction is to bring in an accounting transaction that will allow the allocation of the 'overpayment' created and applied to the Wise-Pay prepayment account.  This transaction will appear on the company account as a credit, and can be applied to any future invoices.

The credit note transaction will take the money out of the liability account (Wise-Pay prepayments) and then apply it against an invoice as an application of credit

Apply Credit Notes

Purpose: when you apply a credit note, the payment is applied to the invoice at the time when the credit is applied.  As QBO is correctly allocating the payment via a liability account, revenue is then recorded as per the date of the invoice (accrual) or date when the payment is applied (cash).

The following example shows a number of credit notes that are available to be applied against an invoice as a result of a Wise-Pay Overpayment being created in the earlier steps

Sync overpayment applied as payments to ConnectWise

Purpose: When a overpayment is applied to an invoice through the credit allocation process, a payment sync is required to update the payment application detail in ConnectWise.  Wise-Sync will identify payments which have been created as part of the Wise-Pay Overpayment process and allow these to be applied as Cash Payments in ConnectWise.  Only credit notes that are created through the Wise-Pay overpayment processes will sync via this method.  Credits created as part of a normal credit memo in ConnectWise or a Credit Note in QBO will not sync as these need to be applied per existing process.