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Level 2

Suspense Account vs. A/R vs Misc Income/Expense Account

Good afternoon All,

I am really hoping that someone can shine some light on the many ways I have read about on how to handle the following scenario(s). Just to note I have my bank accounts linked into QB. My flow is as follows.
  1. invoice customer
  2. customer e-transfers payment
  3. wait for transaction to download
  4. match to invoice.

Scenario 1; I invoice customer1 $100 and then pay $110, and
Scenario 2; I invoice customer2 $100, they send in payment but then send in a duplicate payment (requiring a refund)

So in reading, one solution that seems to come up consistently is to us A/R to record either the overage or double payment and then create a cheque transaction to pay the customer back

The second solution (more for scenario 2) is to move the transaction to a 'Misc Income' account and then create a credit memo.

The third solution was to create a suspense account (bank account, expense account?) - haven't tried this way yet.

Solution 1, I have been told, from the bookeeping side, that I should never be booking transactions to A/R

Solution 2, I have tried and it works, but if the customer simply wants the credit to remain until the next invoice, it doesn't show up in their account, nor does QB know to use any outstanding credits.

Sorry for the long winded post but I wanted to try and include everything, though I am sure I have forgotten something!
2 Comments 2
Alex M
QuickBooks Team

Suspense Account vs. A/R vs Misc Income/Expense Account

Hi there lifeAtTheLake,


It's vital that all your transactions be entered correctly so that your books can be well balanced. QuickBooks Online is a great tool able to help you keep track of balances owed by customers so you can get paid for your services. I can point you in the right direction for assistance with entering your transactions.


In order to know the best method of the ones you've described for entering customer credits and refunds, I recommend speaking to your accountant. Their expertise will be able to view the methods you outlined above in order to provide you with information about which one of them best affects your books. You can add your accountant to your QuickBooks account for them to have access to your books by going to the My Accountant tab. You can also find an accounting professional near you that has experience using QuickBooks by clicking on the Find a pro to help option located in that section.


If you have any other questions, feel free to reach out here.

Level 2

Suspense Account vs. A/R vs Misc Income/Expense Account

Hi Alex, 

Thank you for the reply and while I appreciate what you are saying, the reason for posting the question in the 'community' is that I was looking for responses from others as to how they would handle it in their experience.


Perhaps I haven't posted this in the correct spot for that.

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