How to Reconcile Payments and Sync Reduced Invoice Amounts Between Xero and PencilPay After Adjustments

Scenario:

An invoice is processed and paid in Pencil, and the payment is successfully synced to Xero.

Later, The invoice amount was reduced (e.g., applies a discount or return) and removes the original payment in Xero.

The invoice now appears as "Overdue" in Xero because the original payment was deleted, and the new invoice total is lower than the amount originally paid.

Expected Outcome:

To mark the invoice as "Paid" in Xero and apply the overpayment amount as a "Credit Note" for future use.

Steps:

1. Log in to Pencil.

2. Navigate to the Invoices tab.

3. Type the invoice number in the Search field to locate the relevant invoice.

4. Click the three dots (More Actions) menu under Actions

5. Select Payment Details.

6. Locate the Resync Payment button (Teal/Blue-Green button) and click it.

The Result:

• Pencil will push the original payment data back to Xero.

• Xero will apply the necessary amount to mark the invoice as Paid.

• The remaining balance (the difference between the payment and the reduced invoice amount) will automatically be created as a Credit Note in Xero.

• Verification: You can verify this in Xero by going to the Customer’s account and looking for "Remaining Credit."

Article 2: Handling Xero Sync When Invoice Amount is Increased After Payment

Scenario:

An invoice is processed and paid in Pencil. Later, the supplier increases the invoice total (e.g., added fees or corrections). You need to update Xero to reflect the higher total and show that there is now a remaining balance due.

Goal:

To update the invoice total in Xero and apply the original payment, leaving the difference as an "Outstanding Balance."

Steps:

1. Log in to Pencil.

2. Navigate to the Invoices tab and find the relevant invoice.

3. Click the three dots (More Actions) menu.

4. Select Restore Invoice.

5. Step A - Update Total: Click to Manually Sync the invoice.

   • Note: This action pulls the new, higher total from the source into Xero.

6. Step B - Re-apply Payment: Go back to Payment Details and click Resync Payment.

The Result:

• The invoice in Xero will update to the new, higher dollar amount.

• The original payment will be applied to the invoice.

• The invoice status will show a remaining balance due (the difference between the new total and the original payment).