Recording returned Payment

I've got you covered, @Augustine B.

You can create a journal entry and a bill payment check to record the returned payment due to wrong account information. Let’s go through these steps one at a time:

Firstly, let's enter a reversing journal entry. Here's how:

1. Sign in to your QuickBooks Online (QBO) account.
2. Click the + New button, then select Journal Entry.
3. Make sure the Date, Entry No, and Vendor name are correct.
4. Debit the checking account for the amount of the returned payment.
5. Credit the A/P account for the amount of the returned payment.
6. Click Save & Close.

Then, unlink the bill from the payment check and link it to the journal entry.

1. Click Expenses from the left menu, then select Vendors.
2. Locate the vendor you need, and open the original bill payment.
3. From the Bill Payment screen, put a checkmark in Journal Entry you’ve created.
4. Uncheck the Bill you originally paid.
5. Enter a Memo to indicate the returned payment. 
6. Then, click Save & Close.

Lastly, you'll have to create a new bill payment check to record the new payment transaction. 

1. Click the + New button, then select Pay Bills.
2. Choose the bill you originally paid.
3. Complete all other required information.
4. Click Save and Close.

Most importantly, I suggest seeking help from your accountant if you're unsure about these steps. This can get tricky and they know how to handle the next steps.

Let me know how it goes by leaving a comment below, @Augustine B. I want to make sure your concern is taken care of.

You may also want to run and customize reports in QuickBooks Online. This will help you view useful information about your business and transactions.

Have a great day ahead!

Hi Mark, 

Much appreciated for your detailed response. I have entered a reversal journal entry and followed your steps. It was very easy. Thank you very much. 

I am unsure, of how should I apply the refund amount appearing in bank feeds. 

Greatly appreciate your response. 

Thank you

Allow me to chime in, Augustine.

I'll help you match the bill payment to the refund amount that appears in bank feeds.

Let's locate the bill payment transaction using the Find match feature and match it to the bank transaction. I'll show you how.

1. Go to the Banking menu, then Banking.
2. From the For Review tab, locate the refund amount transaction.
3. Click the Find match option.
4. A Matching transactions window will appear, select the bill payment transaction.
5. Once done, hit Save.

If you're unable to see the bill payment transaction, you'll have the option to Exclude the refund transaction from bank feeds.

Check out this article for more details: Exclude a bank transaction you downloaded into QuickBooks Online.

I also recommend reconciling your account at least once a month to ensure bank and credit card statement balances match up with QuickBooks. For a complete guide, see this resource: Reconcile an account in QuickBooks Online.

You're welcome to post again if you need further assistance in QuickBooks. We're available to help you 24/7.

Hi Giovann, 

Thank you for your reply. There is no matching transaction as there is no entry related to the deposit of returned payment. So how should I apply them? Should I apply as a deposit?

Also, I don't want to exclude the transaction. 

I appreciate you for getting back to this thread, @Augustine B. Let me provide some insight on how to match and handle returned payments.

Since there are no matching transactions showing in the feeds, we can create and apply them as a deposit. 

Here's how:

1. Click + New and select Bank Deposit.
2. From the Account ▼ dropdown, choose the account you want to put the money into.
3. Select the checkbox for each transaction you want to combine.
4. Make sure the total of the selected transactions matches your deposit slip. Use your deposit slip as a reference.
5. Select Save and close.

For more information, you may also check out this resource: Record and make bank deposits in QuickBooks Online.

Additionally, let me share some relevant articles you can utilize to help manage your bank transactions in QuickBooks:

• Categorize and match online bank transactions in QuickBooks Online
• Reconcile an account in QuickBooks Online

Keep me posted if you have other questions about matching bill payments to the refund amount. I'll be happy to help you always. Stay safe!