Reconcile an overpaid invoice or bill
Reconcile a payment that's more than the amount of the invoice or bill you've entered in Xero. You'll be prompted to allocate the credit next time you approve a sales invoice or bill for that contact.
On the bank reconciliation screen, next to the bank statement line you want to reconcile, click Find & Match.
Find the invoice or bill entered in Xero. Select the checkbox next to the transaction that you want to match with the bank statement line.
Click New Transaction, then select Receive Money (for an overpayment you received) or Spend Money (for an overpayment you paid).
Next to Spent as or Received as, select Overpayment.
Enter the transaction's details, then click Save Transaction.You can't change the Account or Tax Rate fields.