# How to Apply Overpayment in Xero When Receiving Money

> To apply an overpayment when receiving money in Xero, click 'Create New' on the dashboard and choose 'Receive Money'. Select your bank account, choose 'Overpayment' from the 'Received As' menu, fill in the required accounts receivable details, and click 'Save'.

Canonical: https://livedemo.ai/tutorials/how-to-apply-overpayment-in-xero-when-receiving-money/
Apps: Xero
Updated: 2026-10-05
Interactive demo: https://story-api.livedemo.ai/workspaces/62255d3d3304f17b8f5e2d03/stories/692a2f72d673bd5aa8e61b30/preview?step=1

## Steps

1. On Xero's main dashboard, go to the top menu bar and click 'Create New'.
2. Choose 'Receive Money' from the list of options.
3. After that, select the bank account you wish to use and then tap 'Next'.
4. Click the drop-down menu next to 'Received As'.
5. Subsequently, select 'Overpayment'.
6. Fill out the input fields with the required information related to accounts receivable.
7. Once done, click 'Save'.
8. After completing these steps, an overpayment will be applied to your receive-money transaction.