Matching a credit note to a bank receipt

stobonet · ‎October 12, 2023

My confidence in QuickBooks is rapidly going to zero as almost every issue that I raise has no solution. What I suspect is another one, which ought to be simple but likely is not.

I have customers who have overpaid past invoices. Rather than arrange for a refund they prefer to offset the overpayment against future invoices. So I have created credit notes to match the overpayments. The balance owing, if the system works properly, should automatically be set against future invoices until the balance goes to zero. [Note: I have set the automatic offset setting to ON in Automation.]

All fine except ... There appears to be no way to match the credit note to the bank receipt from my bank feed. So I have unreconciled bank receipts. What do I do now?

[Again note: the Help examples assume that either (a) overpayments are offset against immediate invoices or (b) they are refunded. Nobody seems to have thought through the consequences of using future credits on the bank account.]

Ashleigh1 · ‎October 12, 2023

Hello Stobonet, thanks for posting on the Community page, So you can link the invoice with the credit know via a cheque so then match it up at the banking as the credit note has no way to select a bank account so you would need to apply it as a payment invoice to be able to match it up in the banking page.

stobonet · ‎October 12, 2023

Unfortunately I don't have the least notion of what you are trying to explain. Please could you break it down into a series of steps with pointers to the actions required. Specifically

1. Why is a cheque required? It is bank transfer!

2. What is a payment invoice? I understand invoices but since no goods or services are involved at this point I see no logic to creating any invoice as that will wreck the double entry accounting when the real invoices are created later and paid using the credit note.

I suspect that the real issue is that credit notes have been implemented strictly as artificial, non-cash items - i.e. like discounts or special offers taken off the amount paid by customers. What I am looking for is something like pre-payments or advance deposits which create a balance in the customer account that is drawn down as work is carried out or goods are delivered.

MirriamM · ‎October 12, 2023

Hi there, stobonet. I appreciate you getting back and providing additional information about your concern.

Let me share details on how you can match your transactions in QuickBooks Online (QBO).

Currently, matching credit notes to your bank feeds isn't an option. In your case, you don't need to create a credit note for the overpayment since QuickBooks will automatically detect a credit. Instead, you'll have to enter the full amount when receiving the payment.

After that, match the bank receipt to the invoice payment.

As for your past transactions that have overpayment with credit notes created, you may need to follow the same process above.

For more details on managing your bank transactions, see this article for a guide: Categorise and match online bank transactions in QuickBooks Online.

For future reference, here's a great resource about the best practices when reconciling: Reconcile an account in QuickBooks Online.

If you have further questions when matching bank transactions, let me know by commenting below. I'll be here to further assist. Have a great day!

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Matching a credit note to a bank receipt