QuickBooks HelpQuickBooksHelpIntuit

How to refund a deposit and close an invoice

by Intuit2 Updated 6 days ago

Learn how to refund a deposit entered in QuickBooks Online or processed with QuickBooks Payments.

If a customer paid a deposit for an invoice but later changed their mind and cancelled the transaction, you can return the deposit. You can do this by giving the customer a refund and applying a credit.

To refund a deposit in QuickBooks Online, create a credit note, create a cheque to refund the deposit, and then record the payment.

The steps in the following sections guide you through this process.

Step 1: Create a credit note

The first step in refunding a deposit is to create a credit note:

  1. Select + New
  2. Select Credit note.
  3. Select the name of the Customer on your invoice.
  4. Enter the total of the invoice, including the deposit in the Amount field.
  5. Select Save and close.

The credit note is created. The next step is to issue a cheque to refund the deposit.

Step 2: Create a cheque to refund the deposit

To create a cheque to refund the deposit:

  1. Select + New.
  2. Select Cheque.
  3. Select the customer in the Payee field.
  4. Under Category details, in Category dropdown, select Accounts Receivable.
  5. Enter the amount of the deposit received in the Amount field.
  6. Select Save and close.

The cheque is created. The last step in the process is to record a payment.

Step 3: Record a payment

To record the payment:

  1. Select + New.
  2. Select Receive Payment.
  3. Select the name of the Customer on your invoice.
  4. Make sure that the total credits equal the credit note and invoice listed under Outstanding Transactions.
  5. Select the checkboxes for the credit note and invoice in the Outstanding Transactions section.
  6. Select Save and close.

The payment is recorded and the deposit refund is completed.



QuickBooks Online EssentialsQuickBooks Online PlusQuickBooks Online Simple Start

Sign in now for personalized help

See articles customized for your product and join our large community of QuickBooks users.

More like this