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Level 1

How to Record a returned online bill payment in QuickBooks Online

I sent a payment using my online bill payment via my bank.  The money was returned to the bank as it never reached the vendor.  How do I account for this returned payment?

4 Comments
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Level 15

How to Record a returned online bill payment in QuickBooks Online

Assuming you are going to pay the vendor again

create if you need to a clearing expense account
create a deposit in the amount of the check, and use the clearing expense account as the source account for the deposit

write a new check, bill pay, what ever to the vendor and use that clearing expense account as the expense (reason) for the check.

the clearing expense account will be zero, the bill remains paid as of the original date, especially important if inventory is involved

 

when you reconcile, check off this deposit against the old bill payment check/EFT

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Level 1

How to Record a returned online bill payment in QuickBooks Online

@Rustler  I have this same issue and have a follow-up question.  Payment to vendor made in October 2018, payment returned/deposited in Jan. 2019 and bill re-paid in Feb. 2019. No inventory involved.

Would it work to use A/P as the clearing account for both the return/deposit and new payment?   I did this, but wondered (a) if it's correct and (b) do I need to "add" the deposit to the new payment/expense?  In QBO, the drawer opens on the expense and asks if I want to add the deposit to the expense.  The drawer also contains the expense I'm working on, which seems odd.  What am I missing here?  Thanks in advance!  

Highlighted
Level 15

How to Record a returned online bill payment in QuickBooks Online

@BikenBooks

I have never done it that way so I really can not say if it works ok or not.

 

I do it the way I mentioned previously because I do not want the original date of the bill payment to change.  In cash basis reporting, and when dealing with inventory, that date of payment is important.

Highlighted
Level 1

How to Record a returned online bill payment in QuickBooks Online

Ok, thanks for responding. 

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