Apply overpayment to existing invoice or bill

Here's how to apply an overpayment to an existing invoice or bill for the same contact.

  1. In the Accounts menu, select Sales (if overpayment received) or Purchases (if overpayment paid).
  2. Click Awaiting Payment.
  3. Select the overpayment Overpayments icon..

    Image showing overpayment on Awaiting Payment tab.

  4. Click Overpayment Options and select Allocate Credit.
  5. Xero displays all unpaid invoices or bills for this contact. Enter the amount to credit to each invoice or bill.

    You can allocate less than the full amount of the overpayment, for example if the overpayment is more than the amount of unpaid invoices or bills.

    Image showing allocation of outstanding overpayment.

  6. Click Allocate Credit.


If the Allocate Credit option doesn't appear in the Overpayment Options menu, please check the following:

  1. The contact name used by the overpayment and invoices or bills are the same.
    • If the contacts are different, edit the overpayment, invoice or bill so all use the same contact.
    • If you have duplicate contact records, merge or archive the duplicate contact record.
  2. If you use multi-currency, the invoice or bill and the overpayment must be in the same currency.