diff --git a/app/Http/Controllers/PaymentApiController.php b/app/Http/Controllers/PaymentApiController.php
index 9710fdc4fdc8..164f34f3416e 100644
--- a/app/Http/Controllers/PaymentApiController.php
+++ b/app/Http/Controllers/PaymentApiController.php
@@ -9,20 +9,23 @@ use App\Models\Invoice;
 use App\Models\Payment;
 use App\Ninja\Mailers\ContactMailer;
 use App\Ninja\Repositories\PaymentRepository;
+use App\Services\PaymentService;
 use Input;
 use Response;
 
 class PaymentApiController extends BaseAPIController
 {
     protected $paymentRepo;
+    protected $paymentService;
 
     protected $entityType = ENTITY_PAYMENT;
 
-    public function __construct(PaymentRepository $paymentRepo, ContactMailer $contactMailer)
+    public function __construct(PaymentRepository $paymentRepo, PaymentService $paymentService, ContactMailer $contactMailer)
     {
         parent::__construct();
 
         $this->paymentRepo = $paymentRepo;
+        $this->paymentService = $paymentService;
         $this->contactMailer = $contactMailer;
     }
 
@@ -108,7 +111,7 @@ class PaymentApiController extends BaseAPIController
         // check payment has been marked sent
         $request->invoice->markSentIfUnsent();
 
-        $payment = $this->paymentRepo->save($request->input());
+        $payment = $this->paymentService->save($request->input(), null, $request->invoice);
 
         if (Input::get('email_receipt')) {
             $this->contactMailer->sendPaymentConfirmation($payment);
diff --git a/app/Http/Controllers/PaymentController.php b/app/Http/Controllers/PaymentController.php
index 2501c4d4ea79..7b8ad7081755 100644
--- a/app/Http/Controllers/PaymentController.php
+++ b/app/Http/Controllers/PaymentController.php
@@ -191,16 +191,10 @@ class PaymentController extends BaseController
 
         // if the payment amount is more than the balance create a credit
         if ($amount > $request->invoice->balance) {
-            $credit = Credit::createNew();
-            $credit->client_id = $request->invoice->client_id;
-            $credit->credit_date = date_create()->format('Y-m-d');
-            $credit->amount = $credit->balance = $amount - $request->invoice->balance;
-            $credit->private_notes = trans('texts.credit_created_by', ['transaction_reference' => $input['transaction_reference']]);
-            $credit->save();
-            $input['amount'] = $request->invoice->balance;
+            $credit = true;
         }
 
-        $payment = $this->paymentService->save($input);
+        $payment = $this->paymentService->save($input, null, $request->invoice);
 
         if (Input::get('email_receipt')) {
             $this->contactMailer->sendPaymentConfirmation($payment);
diff --git a/app/Services/PaymentService.php b/app/Services/PaymentService.php
index 7e12baaeec59..00eec4ddfb99 100644
--- a/app/Services/PaymentService.php
+++ b/app/Services/PaymentService.php
@@ -5,6 +5,7 @@ namespace App\Services;
 use App\Models\Account;
 use App\Models\Activity;
 use App\Models\Client;
+use App\Models\Credit;
 use App\Models\Invoice;
 use App\Ninja\Datatables\PaymentDatatable;
 use App\Ninja\Repositories\AccountRepository;
@@ -149,8 +150,19 @@ class PaymentService extends BaseService
         }
     }
 
-    public function save($input, $payment = null)
+    public function save($input, $payment = null, $invoice = null)
     {
+        // if the payment amount is more than the balance create a credit
+        if ($invoice && $input['amount'] > $invoice->balance) {
+            $credit = Credit::createNew();
+            $credit->client_id = $invoice->client_id;
+            $credit->credit_date = date_create()->format('Y-m-d');
+            $credit->amount = $credit->balance = $input['amount'] - $invoice->balance;
+            $credit->private_notes = trans('texts.credit_created_by', ['transaction_reference' => isset($input['transaction_reference']) ? $input['transaction_reference'] : '']);
+            $credit->save();
+            $input['amount'] = $invoice->balance;
+        }
+
         return $this->paymentRepo->save($input, $payment);
     }