How to handle a payment that is the wrong amount
Wrong-amount payments are common: a typo, a partial payment, or a deposit applied twice. A short routine keeps the books clean.
- Compare the payment to the invoice. Check the invoice, any deposit and any change orders before deciding it is wrong.
- Record exactly what arrived. Log the amount and date received, even if it is not what you expected.
- Contact the customer politely. State the invoice total, what you received, and the difference. Ask how they would like to settle it.
- Refund or apply the overpayment. Refund with the customer's agreement or apply it as a credit on a future invoice, in writing.
- Close the invoice only when it is square. Mark it paid only when the balance is zero or a written credit is on file.
Common questions
Can I keep a small overpayment?
Return it or credit it with the customer's written agreement. Ask your accountant how to record it.
What if the customer shorted the payment on purpose?
Send a friendly reminder with the exact balance first. Ask your attorney before anything stronger.
See also the contractor guides and free tools.
General information, not legal or financial advice. Verify with your attorney or accountant.
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