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Level 3

How do I reconcile a partial refund by credit card.

Scenario: customer pays an invoice $600 by CC through QB merchant services. There are several items on the invoice going to several different income accounts. Payment is funded and deposited in a batch with other payments.

Customer then cancels some items on the invoice and we refund $300 to the CC they paid with.

We create a ‘Refund Receipt’ attached to the customer account.

The next batch deposit we receive from QB Merchant Services contains 10 payments of $100 each and the refund of $300. $700 is deposited in to our bank account.

How do I reconcile the above?

The refund receipt does not appear anywhere in the reconciliation lists and therefore cannot be matched.

I’ve had 4 support calls with QBO support lasting around 7 hours. Not one of them had much of an idea what they were doing. One didn’t even have the same version of QBO for some reason.
13 Comments
Level 3

Re: How do I reconcile a partial refund by credit card.

UPDATE:

I'm now 110 mins in to my 5th session and have achieved absolutely zero. Worse still the 'chat' person seems to have no idea what my questions is, despite repeatedly pasting it in the chat window.

 

How difficult is it to change accounting software? 

QuickBooks Team

Re: How do I reconcile a partial refund by credit card.

Let me help you sort this out, @howardjennings.

 

I can lend a hand by sharing some information on how you can record your transactions accurately and reconcile.

 

To avoid getting discrepancies while reconciling your account, you need to make sure all of your manually added transactions are matched with the downloaded ones and mapped to the correct account.

 

Since your customer made a time payment for all the invoices you've sent to them, here's how you can record one-time payment:

  1. Click the Plus Icon.
  2. Select Receive Payment.
  3. Choose the name of the customer (all the invoices associated with the customer will be displayed).
  4. Put a check mark on all the invoices.
  5. Click Save and Close.

If you have set up a specific account where the income of the items added on the invoice were to be posted, the payment you've made will automatically be mapped. There's no need to manually assigned it.  

 

Now, let's record the refund. Here's how:

  1. To offset the refund amount from the Accounts Receivables, let's create an expense transaction.
    1. Click the Plus Icon (+).
    2. Choose Expense.
    3. Under the Category column, choose Accounts Receivables.
    4. Enter the description and amount of the refund.
    5. Click Save and Close.
  2. Link the Expense transaction and Recorded payment. 111.jpg

Now, you can match your transactions including the refund you've made. Once completed, you can now reconcile  your transactions.

 

Feel free to visit us here in the Community if you have other questions about reconciling in QuickBooks Online.

Level 3

Re: How do I reconcile a partial refund by credit card.

Hi I only need from the refund receipt forward.

 

We've created the refund receipt. and made the actual refund back to the credit card that the customer used to pay the invoice in the first place.

That resulted in the next batch payment from QB merchant services being less than the invoices that are in the batch.

i.e. 10 payments received @ $100 each = $1000 received by QB merchant services for us.

1 refund to customer for $300

Therefor we only receive $700 in to our bank account.

 

How do I match the 10 payments and the 1 refund in the bank feeds?

 

 

QuickBooks Team

Re: How do I reconcile a partial refund by credit card.

Hello there, howardjennings.

 

Thanks for getting back and providing additional details of your concern. Let me help you match payments and refund on your bank feeds.

 

If the merchant services payments are deposited under Undeposited Funds, the Refund Receipt should also be refunded using the Undeposited Funds as Bank.

 

Then when you create a Bank Deposit to match the money deposited on your bank, you'll need to include the Refund Receipt so this will be totaled to 700.

 

That should point in the right direction. ​If there's anything else I can help you with, feel free to stay in touch with me by adding a comment below.

Level 3

Re: How do I reconcile a partial refund by credit card.

Still doesn't sound right.

 

  1. We create an invoice.
  2. It appears in or 'Accounts Receivable account'
  3. Client clicks 'pay' and pays by CC.
  4. QBO shows that in our 'Undeposited Funds Account'
  5. merchant services collects the money and deposits it into our bank account.
  6. We reconcile the deposit from merch servics with the paid invoice.
  7. the 'Undeposited Funds' & 'Accounts Receivable' accounts are automatically reconciled.
  8. 3 months later, client needs a partial refund.
  9. We make the refund from our merchant services account.
  10. QB Merchant services refund the client
  11. We create a 'Refund Receipt' against the payment we received in the client account.
  12. QB Merchant services then deduct the amount of the refund from the next batch payment they make to us.
  13. We then receive the batch payment in to our bank account (payments collected less refunds)

How do we match the paid invoices and the refund receipts with we actual deposit we received from QB merchant services.

 

This has to be a very common thing to want to do. Anyone that accepts credits cards has this problem.

QuickBooks Team

Re: How do I reconcile a partial refund by credit card.

Hello there, @howardjennings.

 

I appreciate you getting out back to us and providing more details. I'm here to clear this out for you.

 

You're unable to match the batch payment with the invoice and refund receipt because these are two different type of transactions (received and spent).

 

To begin, you'll have to exclude it from the banking feeds.

  1. Click Banking.
  2. Under the For Review tab, look for the transaction.
  3. Put a check mark on the transaction box.
  4. Click Batch Action and choose Exclude Selected.

2.PNG

 

Then, manually clear the refund you recorded in QBO so you can reconcile it. 

  1. Click Accounting.
  2. Choose the account and click View register.
  3. Look for the transaction.
  4. On the Check column, tag it as C (cleared).
  5. Click Save.

 

 

 

For more insights, you can use this article as a reference: How do I clear, unclear, reconcile or unreconcile transactions?.

 

That should correct your recording, howardjennings. Let me know if you have other banking concerns. Just add a comment below or mention my name. Have a good one.

Level 3

Re: How do I reconcile a partial refund by credit card.

But what about the deposit in my bank account? I still have to match it to the invoices.

I have a deposit of $700

This is made up of 10 customer payments of $100 each

and 1 refunds to a different customer of $300

Level 10

Re: How do I reconcile a partial refund by credit card.


@howardjennings 

What is the difference between "9. We make the refund from our merchant services account." and "11. We create a 'Refund Receipt' "?  

Highlighted
Level 3

Re: How do I reconcile a partial refund by credit card.

The refund we make is the same amount as the refund.

The next batch deposit we receive from QB Merchant Services contains 10 payments of $100 each and the refund of $300. $700 is deposited in to our bank account.

Level 1

hi, i am experiencing the same issue, did you manage to find a solution?Thanks

 
Moderator

Re: hi, i am experiencing the same issue, did you manage to find a solution?Thanks

Hi there, Zornitsa.

 

You'll have to record the received payments to the Undeposited Funds. Then, go to Bank Deposit to match the transaction. You can follow the steps below:

 

  1. Go to the Bank Deposit under Other.
  2. Then, select the customer payments that includes to the deposit.
  3. In the Add funds to this deposit section, enter a negative amount of the refund.
  4. Click Save and Close.

Once done, the transaction will be automatically matched. You can check it in the Banking page.

 

We'll be around to help you with QuickBooks transactions.

Level 1

Re: How do I reconcile a partial refund by credit card.

Did you ever figure it out? I have 2.5 hrs into trying to solve with QB. They even had 2 different engineers on the line and we still do not have an answer on how to resolve this...

QuickBooks Team

Re: How do I reconcile a partial refund by credit card.

Hi there, @Smyersm2.

 

When processing a refund receipt to your customer, make sure to use the same account you deposited the payments.

 

This way, when reconciling, the refund will show on the same account the payment is received. I've attached some images below for visual reference. 1.png 2.png 3.png

Also, I encourage you reaching out to your accountant for further advice on recording this. This way, you'll be guided accordingly.

 

I'm also adding these great resources that can help guide you in your reconciliation:

As always, if you need further assistant with your QuickBooks Online (QBO) account, don't hesitate to reach out to us. We're always here to help.

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