Deferred Revenue

Hi there, @Champ003. 

Thanks for visiting the Community. I appreciate you for sharing the details of your concern. 

In your case, you'll need to use the Expense or Check since the customer made a prepayment for an order but decided to cancel it before receiving the goods or services. Here's how: 

1. Select + New, then select Expense or Check. 
2. Select the customer you want to refund from the Payee drop-down list.
3. Select the bank account where you deposited the payment from the Payment account drop-down list.
4. On the first line of the Category column, select an Accounts Receivable, then enter the refund in the Amount field.
5. Enter all other necessary info in the fields, then select Save and close.

Once done, link the refund to the customer's credit to complete the process. Here's how:

1. Select + New, then select Receive payment or Receive invoice payment.
2. Choose the same customer you used for the check or expense.
3. Enter all necessary details in the given fields.
4. Under the Outstanding Transaction section, check the box for the Expense or Check you've created.
5. Ensure that the payment is equal to the open balance, then Save and close.

See this article for more information: Record a customer refund in QuickBooks Online.

Concerning with the invoices that are paid in full, you can't change the GL codes to deferred revenue. The best option is to create a credit memo or use the journal entry so you can apply them in the future invoice. Refer to this article for more information: Enter and apply credit memos and delayed credits in QuickBooks Online. 

For the unpaid invoices, you have the option to void them. 

You may also want to check out this help article for your future reference: Handle a customer credit or overpayment in QuickBooks Online. It helps you learn about what you can do in case you'll have an overpayment situation. 

Let me know if you additional questions. I'll be around to help. Stay safe.

---

@Champ003 wrote:

We just had a large event cancel and asked our paid customers if they wanted to rollover their payments to next year's event.  A large number of these clients replied yes, they wanted to roll their funds to 2021.  These clients have been invoiced and invoices have been paid in full.  My question will I have to do Journal entries on every customer invoiced (about 200) to move funds to deferred revenue?  Can I open the invoice and change the GL codes to deferred revenue instead of J/E? Just trying to think of options to make it look clean in reports and easy for auditors to understand.  I did refund receipts for everyone that asked for a refund and credit memos for everyone that had a unpaid invoice in order to take out of A/R, but still show the initial revenue on the P&L. Thanks for your help.

---

The issue is to remove the current income and hold it as deferred income. do a journal entry

debit current income for the total amount

credit deferred income, customer name 

credit deferred income, customer name

etc

explain in the memo block

deferred income is a liability account