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OVERPAY AN INVOICE

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Posted on by MH-12092052-0

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Hello all,

I need your expertise please.

Let's say a customer sent us a payment for an invoice.

Invoice 123456 totals $800, but they paid $1000, is there a way we can overpay that invoice so that we don't have to create an additional line called CPAY. I know SAP & JDE and other ERP can let you overpay or short pay the exact invoice.

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Dynamics 365 Finance

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Zain Mehmood 4,187 Most Valuable Professional on at

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Hi,

In D365 F&O, the system does not allow direct overpayment on an invoice. it will only let you settle the exact amount or less unless you explicitly handle the difference.
To manage this, there are two main options:

Apply the $800 to the invoice, and the extra $200 is treated as an unapplied amount (a credit) on the customer’s account. You don’t have to create a CPAY line manually the system will leave it as an open transaction that can be applied to future invoices.

If your business prefers to overpay and absorb the excess on the same line, you’d need to post the payment using a payment journal, apply the $800 to invoice 123456, and leave the $200 unapplied.

Let me know if this answers your question,

Thanks,

Zain

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MH-12092052-0 301 on at

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Hello Zain,

Will we be able to specify the invoice which will be over paid, under the invoice field

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André Arnaud de Cal... 301,171 Super User 2025 Season 2 on at

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Hi,

To answer your follow-up question, there is no direct option to specify the invoice on the overpayment. On the customer transaction for the payment, you can see all settlement details. From there, you know the invoice number. You can also consider using Financial tags.

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MH-12092052-0 301 on at

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Hello Andre, when we send a statement of account to the customer the invoice field is blank, which is not good

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Zain Mehmood 4,187 Most Valuable Professional on at

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Hi,

In D365 Finance, you can't directly overpay an invoice beyond its exact amount during settlement. The system will allow you to:

Apply the exact amount (e.g., $800 to invoice 123456)

Leave the remaining $200 as an unapplied amount (credit) on the customer's account

This credit stays open and can be applied to future invoices.

If you're aiming to absorb the full $1000 into the same transaction line against the invoice, that’s not supported out of the box. The system will always treat the overpaid portion separately.

Warm Regards,

Zain

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MH-12092052-0 301 on at

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Hello Zain,

I am aware of all that, but the problem is under invoice, that field is not editable, my teammate here cannot put that inv123456 as a reference

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Frank Hamelly | MVP... 46,625 Super User 2025 Season 2 on at

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The invoice statement screenshot you supplied - that looks like a custom form or report. Do you know if it is? If so, a developer should be able to update the code in the form/report to reflect the relevant invoices.

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MH-12092052-0 301 on at

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Hello Frank & all,

I get all that, my issue is we are over paying an invoice, but when we go in the screen for settlment, my teammate here cannot reference the invoice number in the invoice field in that specific screen.

I also don't see this over payment in the open customer invoices screen at all nor in the aging report.

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Frank Hamelly | MVP... 46,625 Super User 2025 Season 2 on at

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If there are no other open invoices for this customer and the other invoice is fully settled, there'd be no invoice to select. Are you saying the field is locked for the other user?

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Ramit Paul 22,797 Most Valuable Professional on at

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Hi,

The only option D365 has for overpayment is the below and I have completed one transactions for you to see the financial entry.

From the AR Parameter, I kept 5 as overpayment tolerance and system allows the overpayment based on that.

See the payment I made 904 for invoice value 900, it will settle the invoice and balance it out and there will be another financial entry posted for overpayment.

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