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How to split a bill pmt where I paid too much & am waiting for a refund? Most of the payment will be for past bills but can't see where to add category for overpayment.

Forum|Forum|11 months ago
August 3, 2025
2 replies
25 views

I have Edit Transaction open, I've selected the outstanding bills to pay, however I overpaid by $300 and there is no option to add a line to categorize this $300 overpayment.

QuickBooks Online

Best answer by Rainflurry

@kevin205

The response from @FaithA won't work because your $300 overpayment is the vendor credit. When you make an overpayment, QB automatically records it as a credit for that vendor (Accounts Payable A/P debit in accounting terms), so you don't want to duplicate that by creating an additional vendor credit. When you receive the $300 refund, create a deposit (New > Bank deposit), choose that vendor under RECEIVED FROM and Accounts Payable under ACCOUNT. That refund deposit creates a "bill" that can be tied to the overpayment. To tie them together, go to New > Pay bills. Select the bill created by the refund and apply the credit created by the original overpayment. That's it.

F

FaithA

Level 1

We can handle overpayments in QuickBooks Online by creating a Vendor Credit to account for the excess amount, Kevin205.

Let me guide you through the process.

Step 1: Record the Payment for Outstanding Bills

Navigate to + New on the left-hand menu and select Pay Bills.
Choose the vendor whose bills you’re paying.
Select the outstanding bills you want to pay and apply the payment amount to clear them.
Save and close the transaction.

This will clear the invoices that match the payment amount except for the extra $300 you overpaid.

Step 2: Create a Vendor Credit for the Overpayment

Go to + New again and select Vendor Credit from the vendor-related options.
Select the same vendor as in the payment.
In the Amount field, enter $300 (the overpayment).
For the Category, use "Accounts Payable A/P" or another appropriate account from your chart of accounts. This step ensures the overpayment is properly accounted for.
Save the credit.

Now, QuickBooks associates the $300 overpayment with the vendor, allowing you to reconcile it later.

Step 3: Refund or Apply Credit to Bills

Refund Scenario:

If the vendor issues a refund, go to + New and select Bank Deposit.
Choose the account where the refund was deposited and link the $300 to the Vendor Credit.
Click Save and close. This will reconcile the credit by offsetting it with the refund.

Account Credit Scenario:

If the vendor applies the overpayment to future bills, simply select the $300 vendor credit when processing the next Pay Bills transaction to reduce the amount owed on those bills.

This ensures your books stay accurate and organized while tracking the overpayment until it’s resolved.

Let us know in the comments if you have more queries. We'll be looping back to assist you.

RainflurryAnswer

Level 11

@kevin205

The response from @FaithA won't work because your $300 overpayment is the vendor credit. When you make an overpayment, QB automatically records it as a credit for that vendor (Accounts Payable A/P debit in accounting terms), so you don't want to duplicate that by creating an additional vendor credit. When you receive the $300 refund, create a deposit (New > Bank deposit), choose that vendor under RECEIVED FROM and Accounts Payable under ACCOUNT. That refund deposit creates a "bill" that can be tied to the overpayment. To tie them together, go to New > Pay bills. Select the bill created by the refund and apply the credit created by the original overpayment. That's it.

K

kevin205Author

Thank you Rainflurry, this worked. QB had been storing the overpayment as a vendor credit and when the refund came in I had originally posted it as a credit to the expense category. I've now recategorized it through the Accounts Payable as you suggested and it zeroed out the vendor credit.

Rainflurry

Level 11

Great. Glad it worked!

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