Wise-Pay Overpayments in Xero


A batch payment 'Overpayment' will go through the following 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 form credit note to invoices - 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

This example of Overpayments created via a Batch Payment will provide an example of the steps mentioned above


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 a 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 as part of Step 1.  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 as created in Step 1, the payment is applied to the invoice at the time when the credit is applied.  As Xero 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 invoice 572, as a result of a Wise-Pay Overpayment being created in the earlier steps.


Synce Overpayment applied as Payments to ConnectWise

Purpose: When a overpayment is applied to an invoice through the credit alllocation processes, 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 Xero will not sync as these need to be applied as per existing processes.