Hi accounts576, thanks for reaching out to the Community
To record the credit, enter the full amount paid against the invoice on the Bill payment screen (open the bill and select Make payment to record). This will create an unapplied credit of the overpayment amount that can be applied to a future invoice.
If the money was returned, create a bank deposit after this to reflect the funds being received to your bank. To do this, go to + New > Bank deposit > Select the relevant bank on the Account drop-down and choose the Date > Scroll to Add funds to this deposit.
On the first line, enter the supplier under Received from, choose Accounts payable (or Creditors) in the Account field, enter the Amount and select the relevant VAT option then Save & close.
To link the unapplied credit to the bank deposit, go to the supplier's page and select New transaction > Cheque. From here, add the unapplied payment and deposit to the cheque. The total should show zero (0.00) in the amount field once both are selected. Save & close to return to the Suppliers page.
For further support in recording supplier credits and refunds in QuickBooks Online, see here.
