How do I deal with overpayments on Xero?

You will have to find and match the bill or invoice that was overpaid..

You will have to find and match the bill or invoice that was overpaid, then allocate the overpayment under a new transaction.

Xero Central has a good article on this which shows you how to resolve the issue. 

If you're a RightWay customer and still require help with this issue we're happy to chat you through it. Please contact your RightWay accountant, email info@rightway.co.nz or call 0800 555 024