Xero Top Tips

Posted on: December 3rd, 2018 by Judith Mallen No Comments

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Overpayments are transactions where a customer accidentally pays too much or you overpay a supplier. There are a few ways we can record an overpayment and apply it to an invoice or bill, or arrange a refund.

To record an overpayment:

  • Create an overpayment receive money/spend money transaction from the Manage Account drop down menu in your bank account to reconcile the overpayment to.
  • During reconciliation create an overpayment Receive Money/Spend Money transaction. To do this go to Find & Match>Click new transaction>select overpayment from the drop down> enter the details.

Allocate or Refund Overpayment

Once the overpayment transaction has been entered into Xero, a cash refund can be recorded or you can allocate the overpaid amount to an invoice for the same Contact in Xero. You will find the overpayment transaction in either the sales or purchases awaiting payment screen.

  • Select view transaction and under options choose Allocate where you can choose the invoice you need to allocate the overpayment against.
  • If a contact has overpaid and a new bill/invoice is created after the overpayment has been recorded. Xero will ask if you will to allocate the overpayment against the new bill/invoice.
  • You can also record cash refunds on the overpayment directly which will then reconcile with the bank statement line. To enter a refund open the overpayment> fill in the information at the bottom of the screen under Make a cash refund>click add refund.

Part Payments

 A part payment would be recorded when a customer either partially pays an invoice or if you partially pay bills.

To record a part payment:

  • In bank reconciliations choose find & match
  • Search for the invoice/bill and select the checkbox next to the transaction
  • Click the blue Split hyperlink that appears
  • You can choose how much of the deposit/payment you would like to apply to the invoice
  • The remaining balance only of the invoice will be outstanding

Payment of Multiple Invoices

Sometimes a customer may pay an amount that covers multiple invoices or you may make one payment that relates to multiple bills.

To reconcile multiple invoices to one transaction:

  • In the bank reconciliation screen choose find &  match
  • Search for the invoices by entering the contact in the search field
  • Select the checkbox next to each invoice/bill that you need to pay
  • Click Reconcile

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