Bank issued debit memo for a customer payment

Hey there, @JenW1.

To answer this accurately, I will need to know why the bank issued this memo. If the check didn't clear, you'd need to reverse the payment in your QuickBooks so the invoice shows open instead of paid. 

If you can share a bit more information on. the background of the situation, we'll make sure we get this worked out for you! I look forward to hearing from you. 

So the business owner doesn't recall exactly what the issue was (end of 2020).  It was listed as a proof suspense correction by the bank on a remotely deposited check.  

I'm here to ensure you'll be able to record your customer's payment in QuickBooks Online (QBO) smoothly, @JenW1.

You simply need to record the customer payment using the Receive Payment option in QBO. Let me guide you how:

1. In your QBO company, click the +New button.
2. Then, select Receive Payment.
3. In the Customer drop-down choose the name of the customer.
4. From the Outstanding Transactions section, select the open invoice you wish to apply for the payment and enter the amount ($220).
5. Select Check as the payment method and select Undeposited Funds account or your specific bank in the Deposit to box.
6. Once done, select Save and close.

For more details about recording customer payments, please see this article: Take and process payments in QuickBooks Online. 

When finished, you'll now have to match the payment in the bank feeds with the one you create in QBO. Also, I'd recommend excluding other bank transactions if necessary to avoid duplicates. If you need additional assistance with the steps I've provided, please leave a reply below. 

I've attached also this helpful link in guiding you about entering a debit note in QBO: How to create a debit note in QuickBooks?.

You can also run reports to view and track your sales as well as your customer's transactions in QBO. 

Stay in touch if you have any other questions in recording customer payments. I'm always around to help. Have a good one. 

The issue is not recording the payment.  The issue is the proof suspense correction the bank debited the business checking account for the amount of the deposit made.  Both transactions are from the bank feed so is the solution to simply exclude both transactions or is there a better way?

Hi there, @JenW1. I'll make sure to provide you with the resolution you need.

You can record the transactions as customer refunds to ensure the books are up-to-date. You can follow the steps below on how to record a customer refund if the invoice has been paid.

Initially, you need to create a credit memo, but if your customer has overpaid, you don't need to create one. After that, you'll create an expense and receive payment to refund the customer.

Here's how to create a credit memo:
 

1. Click on + New and select Credit memo.
2. On the Customer field, select the appropriate customer.
3. Enter the Credit Memo Date, Amount, and Product/Service.
4. Then select Save and close.
    

To create an expense and receive payment to cancel each other out, here's how:
 

1. Click on + New and select Expense.
2. From the Payee and Payment Account fields, enter the desired customer and select the bank the money is being refunded from.
3. In the Category field, select the Debtors account (Accounts receivable).
4. In the Amount field, enter the amount of the refund. Then select Save.
5. Next, click on  + New again and select Receive payment.
6. Add the Customer and choose the Payment method and Deposit to.
7. Balance should be 0 as they will cancel each other out.
8. Then select Save and close.
9. If you have Online Banking, go to the Banking page and match the record found.
    

For additional information, you can check this article: Record a customer refund in QuickBooks Online.

I'm also adding this following articles for your future help:
 

• Categorize And Match Online Bank Transactions In QuickBooks Online.
• Enter A Refund From A Vendor.
   

Let me know if you need any further assistance on how to manage customers in QuickBooks Online. I'll be around. Enjoy the rest of the day!