Duplicate payment to a supplier - supplier will use as credit - how do we record it and what do we match the bank transaction to?

Hi there, @alect. I'm here to lend a hand in managing your transactions. 

You'll need first to create a supplier credit to record the supplier overpayment. Here's how:

1. In the left menu, click the + New button.
2. Select Supplier Credit.
3. In the Supplier field, select the appropriate supplier name and enter the following necessary fields.
   • Enter the Date.
   • Amount.
   • Account: the account used here is typically the original expense account on the original bill.
4. Select Save and close.

After that, make a bank deposit to enter the supplier refund.

1. In the left menu, click the + New button.
2. Select Bank Deposit.
3. Go to Add funds to this deposit section.
4. In the Received from field, select or enter the supplier name 
5. Choose Creditors (Accounts Payable) account in the Account drop-down list.
6. Enter the Supplier refund amount.
7. Click the Save and close button.

And lastly, link the Supplier Refund Deposit to the Supplier Credit. 

1. In the left menu, click the + New button.
2. Select Expense or Cheque.
3. Choose the supplier name in the Payee dropdown,
4. Leave the Ref/Cheque no., Payment date, Amount and Memo fields blank.
5. In the Add to Expense or Add to Cheque section that appears on the right-hand side, select Add for the outstanding supplier credit and the deposit. 
6. Click the Save and close button.

For more details about this process, see this article: How do I handle supplier credits and refunds?.

Once done, you can now match the Bank Deposit to the money received in the For Review tab on the Banking page. To give you more insights about categorising and matching your transactions, please see this link: Categorise and match online bank transactions in QuickBooks Online.

For future help, you can visit this resource: Reconcile an account in QuickBooks Online.

Leave a comment below if you have any other questions, I'm always here available to help. Have a great day ahead!

Thank you.  I spent 2 hrs on chat with a support agent who 1) could not understand the problem and 2) could not simply provide these instructions.  

Hi Miriam

Now the refund from the supplier has appeared in our bank transactions but I cannot seem to allocate it to the bill payment?  How do I allocate the actual bank transaction?  Should I delete the "deposit" and then use the bank transaction in the bill payment with the credit?

Hello there, @alect.

Thank you for getting back and providing us with more information about this bank transaction you're trying to match.  

After making the deposit using the steps provided by one of my colleagues above, you can now match the deposit with the refund in your banking transactions. 

You don't have to delete the deposit since it is linked with the supplier credit. Let me show you how to match the deposit with the refund in your banking transactions.

Here's how: 

1. Go to Banking or Transactions on the left panel.
2. Click the Banking tab.
3. Select the For Review section, choose the transaction you want to match, and click the Find match radio button. 
4. In the Match Transactions window, select the Date when you see any possible matches, put a checkmark on the transactions.
5. Click Save.

You can learn more about bank fees at this link: How to account for Bank Fees when matching transactions in Bank Feed.

Also, you can check out this article about categorizing and match online bank transactions in QBO. It has detailed steps that'll guide you through the process.

I'd like to know how you get on after trying the steps, as I want to ensure this is resolve for you. Just reply to this post, and I'll get back to you. Take care always.

For some reason the deposit I created using the above instructions doesn't appear when I try to "match" - other deposits appear but not that deposit.  It's dated 10.9.2021 but it doesn't appear when I select the appropriate date range or when I filter for "deposits".  Any idea why not?

never mind - found the problem.....tax mis-classification made the amounts different.