Credit (deposit) received from bank

Hi there, @Lucy222.

Let me share some steps on how to handle overpayment inside QuickBooks Desktop (QBDT). 

If the vendor sends you a refund check for a bill that is already paid, we can follow these steps:

First, create a deposit of the vendor check.

1. Go to the Banking menu, then select Make Deposits.
2. If the Payments to Deposit window appears, click OK.
3. Choose the vendor who sent you the refund from the Received from drop-down list.
4. In the From Account drop-down, select the appropriate Accounts Payable account.
5. In the Amount column, enter the actual amount of the Vendor check.
6. Select Save & Close.

Then, record a bill credit for the refunded amount.

1. From the Vendors menu, select Enter Bills.
2. Click the Credit radio button to account for the return of goods.
3. Enter the Vendor name.
4. Select the Expenses tab and enter the Accounts on the original bill.
5. In the Amount column, enter the appropriate amount for each Account. 
6. Click Save and Close.

Finally, link the deposit to the bill credit. Here's how:

1. From the Vendors menu, select Pay Bills.
2. Check the Deposit that matches the Vendor check amount.
3. Select Set Credits and apply the Bill Credit you created earlier then select Done.
4. Click Pay Selected Bills, then select Done.

For more info, you can check out this article: Record a Vendor Refund in QBDT.

You can also run several reports to tell where your company stands. These offer critical information about your business and finances.

Should you have any follow-up questions or concerns when recording overpayments, don't hesitate to post again in the Community page. We'll be here to assist you. Take care and have a good one. 

I do not use QBO, I use QB desktop (Contractors) for job costing.

I can share a steps for QuickBooks Desktop, Lucy222. 

When recording a refund, you can add it as a bank deposit. Please ensure to select the correct expense account for the deposit amount. Here's how: 

1. Go to the Banking menu, then select Make Deposits.
2. If the Payments to Deposit window appears, select OK.
3. In the Make Deposits window, click Received from the drop-down and pick the vendor who sent you the refund.
4. In the From Account drop-down, select the appropriate Accounts Payable account.
5. In the Amount column, enter the actual amount of the Vendor refund.
6. Tap Save & Close.

After recording the deposit, please follow the next process, Record a Bill Credit for the refunded amount and then Link the deposit to the Bill Credit. I'm adding this article for more guidance on this process: Record a vendor refund in QuickBooks Desktop.

I've added an article that'll help you handle your future tasks about recording your vendor's credit: Transfer and apply credit from one vendor to another in QuickBooks Desktop.

Please let me know if you need clarification about this, or there's anything else I can do for you. I'll be standing by for your response. Have a great day.

Hi AileneA,

Thanks for your response.

I completed your instructions for Step 1. and 2. 

3.  Link the deposit to the Bill Credit.

(b) Do not understand "Check the Deposit that matches the Vendor check amount. (How do you see deposits went you are in Vendor, Pay Bills?  The Set Credits is grayed out.

Thanks.

I have made the deposit.  I have issued a billed credit.  The cost on the project is correct, it has been reduced by the amount of the credit which is what I want.  I have done Verify Rebuild Data, no issues.

My issue is that the billed credit and the deposit are not applied they are standalone transactions in transaction history.  Accounts payable is reflecting the credit amount which I do not want.

When I recorded the bank debit payment in QB Desktop I processed it as "write check" I did not use "enter bill" and "pay bill"

Hey there, @Lucy222. 

Thanks for chiming back in on this thread. Let me point you in the right direction to get this taken care of once and for all. 

Before going forward, the best route would be to consult with your accountant so they can review your transactions and how they're entered in the system. 

In the end, if everything looks correct, I recommend contacting our Customer Support Team for further assistance. They'll be able to use a screen share tool to look over your account and show you the next steps to take. 

Keep us updated on how the conversation goes with your accountant. We're always here to have your back. Take care! 

Thanks.

I am the accountant.  The financial statements and job costing are correct.  The full amount of the transaction posted to job costing and so did the credit.  Both entries are in the property Cost of Goods Sold account.

Just trying to get vendor credit out of accounts payable control account.

Hi there, Lucy222.

I appreciate you for coming back to the thread and adding extra information about your concern. I'll be sharing different steps to ensure you can handle your vendor refund accurately.

Adding a credit to the Account Payable when recording a vendor refund check for a paid bill is part of the process. Thus, the entry appears on the payable side and so removing it isn't possible.

If you don't want to utilize the suggested details above, I recommend performing another alternative way. You'll have to record a deposit of the vendor check and enter a Bill Credit for the amount of the Vendor Check

Here's how to record a Deposit of the vendor check:

1.  Go to the Banking menu and select Make Deposits.
2. If the Payments to Deposit window appears, click OK.
3. In the Make Deposits window, choose the Received from drop-down and select the vendor who sent you the refund.
4. From the From Account drop-down arrow, select the appropriate Accounts Payable account.
5. In the Amount column, enter the actual amount of the Vendor check.
6. Enter the remaining information in the Deposit.
7. Click Save & Close.

Once done, record a Bill Credit for the amount of the Vendor Check. Then, link the created deposit and bill credit. You can open this article to see the steps on how to perform the process: Record a vendor refund in QuickBooks Desktop.

If the steps don't apply to what your business needs, I suggest consulting an accountant. They can provide additional assistance to ensure your records are in shipshape. Also, helps you manage your vendor transaction so your data stays accurate.

Lastly, you may refer to this article to view details on how you can create a general journal entry to write off the amount from the vendor transaction: Write off customer and vendor balances.

If you need further assistance in managing your vendor entries, don't hesitate to click the Reply button below. I want to ensure your success. Have a good one, Lucy222.

Christie,

This is what works for me in QB Desktop.

Banking: Make Deposit, General ledger side is Cash Debit; COGS Credit.

Bill Credit:  General ledger side is Accounts Payable Debit; COGS Credit.

Link Deposit to Credit is not possible in my system, it is grayed out.

As you can see by the entries above the general ledger is not correct because there are two credits to COGS.

To finalize and correct this process I entered a journal entry.

Accounts Payable Credit (and selected the vendor)

COGS Debit.

After this everything is correct in the general ledger and the Accounts Payable control account is correct.