In Xero, an Overpayment transaction creates a Credit Note against the Customer / Supplier Contact which can be later applied to a Sales Invoice or a Bill. 

The process to create an Overpayment transaction is the same for Customers' Overpayments and Suppliers'.

Overpayment transactions can be created both from the Bank Feeds and from the overpaid Invoice/Bill. 

This Knowledge Article covers how to create an Overpayment transaction from the Bank Feeds screen

1. In the Bank Feeds find the Deposit/Withdrawal payment
2. From the [Create] Tab click on Add Details
   
   
   
   
3. Select/Enter the following details:
   • Received As/Spend As > Select: Overpayment
   • From > Find/Enter the Customer/Supplier Name
   • Date  > Confirm the payment date from the bank transaction
   • Reference > Enter the invoice number related to the double payment
   • Description > Enter a description for the overpayment
   • Amount > Confirm the payment amount from the Bank transaction
4. Click on [Save Transaction]
   
   
   
   
5. Click on [OK] to match the transaction

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