I need to refund security deposit to a tenant. I want to make bank transfer, not write check. Like with vendor bill, I want to pay directly via bank account.

Let me provide some information about refunding a security deposit, @panaviewmanagem.

In QuickBooks Online, there are two ways to enter security deposits. You can either create a liability account to report a product/service item or post a bank deposit directly to the liability account. 

If you post security deposits you receive to a liability account, the proper way to record this is to issue a check for the portion to be refunded. 

To issue a check, here's how:

1. Click + New.
2. Under Vendors, choose Check.
   
   
3. Input the check information.
4. In the Account details section, select the liability account you use for security deposits from the Account column drop-down list.
5. Choose Save and close.

Then, record an invoice for the remaining amount, and then enter a credit memo/adjustment to correct the liability account. For the detailed process, please see this article: Refund a security deposit.

Additionally, you can also review this link to help you understand the process of recording bank deposits in QuickBooks as your future reference.

Keep me posted if you have other questions about refunding the security deposit. I'll be happy to help you. Stay safe!

@Rubielyn_J , they are not depositing security deposits, they are returning them, and they want to do it via bank transfer (not check) like how they pay bills online in qbo. Is this possible?

Thanks for joining in this conversation, @my-answer-is-nonsense. My peer just updated her answer with the correct process of refunding the security deposit. 

Should you need to the bank transfer instead, you can do it outside QuickBooks, as our program is for recording purposes only. 

I'd also recommend seeking an accountant's advice should this be your preferred method. They can guide you on how to account the transaction to make sure your books are accurate. 

For future reference, you can visit our Resource Center to get some ideas and steps to any of your QuickBooks tasks and concerns. 

Get back to us here if you have additional concerns. We'll be here to guide you more. 

Thanks @my-answer-is-nonsense for pointing out the actual question. Yes, I do not want to order checks, mail them, etc. Tenants pay me via bank transfers - QB provides a convenient way to collect payments via invoices, which have links to different methods of payment, including bank transfers. QB charges 1% of the transfer amount, BTW, for this convenience.

So the security deposits come in to the company account via bank transfers from those QB-generated electronic invoices, and are recorded in a liability account as suggested in the mentioned links - I do not have questions with recording of the transactions. Problem is that Credit Memos, unlike invoices and unlike bills, do not have capability of online payment.

I am thinking to try the Online Bill Payments for this - will make my customer also a vendor, create a bill, and pay through that Melio system. I know it is a hack, I thought there would be a normal modern way to do refunds, but it looks like QB does not have it, only the old checks stuff. Do you know if there are any legal/regulatory implications with treating customers as vendors for the refund purpose?

P.S. At some point I used Online Bill Payment to pay myself the owner's distributions, i.e. I added myself as vendor and created a bill for owner's draw. Then I receive that bill as vendor in my personal email and follow the link to receive payment into my personal bank account.

I appreciate you for getting back to us, @panaviewmanagem.

I'm here to help you record transactions from the customer at the same time as the vendor.

You can create a wash or barter account to transfer funds. Here's how:

1. Go to Lists at the top menu bar, then select Chart of Accounts.
2. Click on the Accounts drop-down, then choose New.
3. In the Add New Account window, mark the radio button for Bank.
4. In the Account Name field, enter the appropriate account name. For example, clearing, barter, or wash accounts.
5. Fill in the necessary fields.
   Note: Do not enter an opening balance.
6. Choose Save & Close.

Once done, you can now use the barter account to input the transactions. For detailed instructions follow the steps in this article and proceed to the To use a clearing account section: Set up a clearing account.

To ensure transactions are properly tracked, I suggest contacting your accountant for guidance without messing up your account.

This information should help you move forward.

I’ll be around to help and make sure you’re taken care of. Keep safe!

Thanks @Adrian_A - when I follow the steps to create a new clearing account, there is a mandatory "Detail Type" drop-down that is not explained in the "setup clearing account" link. Neither of the types to choose from match the described purpose of the clearing account. Also, this seems to me an intermediate account for recording purposes, but it does not have an online payment option like invoice or bill.

The documentation says "You can pay out of a bank account via Write Checks or Pay Bills" - since I do not want to use checks the only other option in QBO is to use Pay Bills. The Pay Bills requires that I enter a bill, it cannot work with Credit Memos or refunds. Bills only accept vendors as payees, it does not accept customers. Moreover, I cannot create a vendor with the same name as customer, QB says "something's not right...". I am not sure why my customer can't also be my vendor - e.g. my tenant can do work for me and be my vendor independently from being my customer.

I can overcome the problem of adding my customer as vendor by making their display name different. Can anyone please answer my previous question: are there any implications of making a refund to a customer via the Pay Bills system like to a vendor? Is this going to be treated as their income and my expense or something like that? Thanks!

Please call me. In person. Thank you

I do not want to pay on line. I rather pay by check. Please help

@Yvette2547   This is a public community.  No one can, nor will call you, unless its to scam you out of money.  

Without knowing which product you use, all I can do is provide a link for you to go find your product and follow those steps to get in touch with Intuit/ QB. 

https://quickbooks.intuit.com/learn-support/en-us/open-programs/contact-support/00/433872