Matching Square deposits in QuickBooks Online that have refunds

Hello, @Kelly N.

We're happy to see you posting your concern here in the Community and it's our pleasure to assist you. However, in order for us to provide exact resolution process about managing your deposit that have refunds ,we'll need further details about it. We want to know how the refunds get posted in QuickBooks Online (QBO) if it's separate transaction from the deposit or if it is already deducted. You can also add a screenshot for visual reference.

Any additional information will be highly appreciated.

We'll be waiting for your reply, Kelly. Take care!

The refunds are taken out before they are deposited into our checking account.

Hi Kelly N,

Transactions from Square should automatically sync in QuickBooks even those with a refund. Can you please ask Square's Support about this matter. This way, we'll know they transfer deposits with refunds?

On other hand, you can manually create a payment and deposit it to your bank account, but with another line for the refund that has negative number. It should deduct from the total deposits.

Let me know if you have more questions in mind. Take care and have a good one!

MAJOR Pain of a PROBLEM:  Square refunds DO come over with the online feed from Square, and they are given a sales refund # in QB.  The refund posts correctly as a reduction to Sales of Product Income & Sales Tax Payable, and the offsetting combined total posts correctly to Undeposited Funds.

However, when the deposit is made a day or so later, the QB Sales Refund does not show as an item to match, so that the deposit will be in balance.  If the "add resolving transaction" feature is used, with Undeposited Funds as the offset, the amount posts, but it doesn't match/reconcile ("R") the QB Sales Refund with the deposit's resolving transaction for the refund.  See attachment with screenshot from Undeposited Funds.

What is the CORRECT way to handle this, so that the REFUND appears as a matching transaction for the deposit that includes it, AND it will properly reconcile in Undeposited Funds?

I recognize the importance of tracking transactions properly, @jmhjax. Allow me to assist you in ensuring everything is matched correctly for smooth reconciliation.

You can create an expense transaction in QuickBooks Online to settle the refund and balance your deposit.

Here’s how you do it:

1. Select the +New button.
2. Choose Expense under Vendors.
3. Select the payee, date, and your bank account.
4. In the Category dropdown, select Undeposited funds.
5. Enter other needed information in the fields, such as amount and description.
6. Click Save or Save and close after.

Once done, you can include the entry when matching your transactions. Then, you can proceed with reconciling your account. See this reconciliation workflow guide for more comprehensive information and fixes.

To make managing transactions on the Banking page quicker, you can set up bank rules in the future. This will allow QuickBooks to automatically categorize transactions for you.

Please let me know if you have any additional transaction concerns. I want to make sure you're taken care of, @jmhjax.