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kathy47
Level 1

I have a Direct Pay system that withdraws funds for payment from the bank account in the name of vendor.If it doesn't go through it gets refunded. How should I account?

I use Stampli to Direct Pay our vendors. The funds are withdrawn from our bank as if it has already gone to the vendor. If for some reason the ACH doesn't clear the funds are returned. I need to know how to account for that in QB's? Do I credit the vendor since we are fixing the issue and submitting the payment again or show the credit under Stampli?
Solved
Best answer February 02, 2021

Best Answers
Jen_D
Moderator

I have a Direct Pay system that withdraws funds for payment from the bank account in the name of vendor.If it doesn't go through it gets refunded. How should I account?

Thanks for coming back to our forum, @kathy47,

 

I appreciate the additional details, the explanation is much more clearer now. When the third-party payor sends the refunded amount, you can create a deposit to increase the bank balance.

 

This way you can match this amount with the bank statement. Here's how:

 

  1. Click the + New icon and choose Bank Deposit.
  2. Under Add funds to this deposit, add the refund account in the Account column.
  3. Adding a vendor name (third-party payor) in the Received From window is optional, you can leave it blank if you want.
  4. Add the amount you received and the payment method.
  5. Once done, press Save and new or Save and close.

 

When the third-party payor takes back the funds from your bank, create a check to offset it. Here's how:

 

  1. Press the + New icon again and choose Check this time.
  2. Again, adding the Payee name is optional.
  3. Under Category details, add the same refund account used on the deposit.
  4. After adding the amount, press Save and close.

 

When you run a report for the refund account, the check will remove its balance so it won't take much effect on your financials. See this:

 

 

Please update me if you need further help with the same topic or anything else. I'll be more than happy to help you. 

View solution in original post

6 Comments
Jen_D
Moderator

I have a Direct Pay system that withdraws funds for payment from the bank account in the name of vendor.If it doesn't go through it gets refunded. How should I account?

It's nice to see you here today, @kathy47,

 

You can record the entries manually in the program if you have a third-party payment processing for vendor transactions. For refunded payments, you  can create a vendor credit to show the returned funds.

 

If in case you already created the bill and applied the payment, you can edit the payment and replace it with the vendor credit.

 

To create the vendor credit, follow the steps below:

 

  1. Tap the + New icon then choose Vendor credit or Receive vendor credit.
  2. Add the contractor's name in the Vendor drop-down.
  3. Depending on how you record purchases with this vendor, enter the Category details or Item details. Usually, this is the category, product, or service you’re getting a credit for.
  4. Hit Save and close.

 

To apply the credit to an existing payment, use these steps:

 

  1. Go to the Expenses menu and choose the Vendors tab.
  2. Click the vendor name to open the Transaction List.
  3. Tap the Bill Payment transaction applied to the bill.
  4. Mark the bill under Outstanding Transactions then the Vendor Credit.
  5. Once done click Save and new.

 

To apply the credit to an unpaid bill, follow the steps below:

 

  1. Press + New then choose Pay bills or Pay bill.
  2. Pick a bill for your vendor from the list. You'll see the available credit with this vendor in the Credit Applied field.
  3. Complete the rest of the fields like you normally do.

 

I'll be adding some resources here to help you record vendor transactions:

 

 

If you need further help, I'll be right here anytime. Just mention me so I can provide additional assistance. Have a nice day!

kathy47
Level 1

I have a Direct Pay system that withdraws funds for payment from the bank account in the name of vendor.If it doesn't go through it gets refunded. How should I account?

Thanks Jen_D for the input.  I don't think that works exactly though because then it looks like the vendor has an available credit when they don't.   I can't just leave an unapplied credit on their account. 

It's not a refund in any way it's funds being put back into our bank account by our third party payor because the payment didn't clear.   Once the ACH information is corrected they take funds back out again to resubmit the payment. 

kathy47
Level 1

I have a Direct Pay system that withdraws funds for payment from the bank account in the name of vendor.If it doesn't go through it gets refunded. How should I account?

Thanks Jen_D for the input.  I don't think that works exactly though because then it looks like the vendor has an available credit when they don't.   I can't just leave an unapplied credit on their account. 

It's not a refund in any way it's funds being put back into our bank account by our third party payor because the payment didn't clear.   Once the ACH information is corrected they take funds back out again to resubmit the payment. 

Jen_D
Moderator

I have a Direct Pay system that withdraws funds for payment from the bank account in the name of vendor.If it doesn't go through it gets refunded. How should I account?

Thanks for coming back to our forum, @kathy47,

 

I appreciate the additional details, the explanation is much more clearer now. When the third-party payor sends the refunded amount, you can create a deposit to increase the bank balance.

 

This way you can match this amount with the bank statement. Here's how:

 

  1. Click the + New icon and choose Bank Deposit.
  2. Under Add funds to this deposit, add the refund account in the Account column.
  3. Adding a vendor name (third-party payor) in the Received From window is optional, you can leave it blank if you want.
  4. Add the amount you received and the payment method.
  5. Once done, press Save and new or Save and close.

 

When the third-party payor takes back the funds from your bank, create a check to offset it. Here's how:

 

  1. Press the + New icon again and choose Check this time.
  2. Again, adding the Payee name is optional.
  3. Under Category details, add the same refund account used on the deposit.
  4. After adding the amount, press Save and close.

 

When you run a report for the refund account, the check will remove its balance so it won't take much effect on your financials. See this:

 

 

Please update me if you need further help with the same topic or anything else. I'll be more than happy to help you. 

View solution in original post

kathy47
Level 1

I have a Direct Pay system that withdraws funds for payment from the bank account in the name of vendor.If it doesn't go through it gets refunded. How should I account?

That worked.  Thank you!

ZackE
QuickBooks Team

I have a Direct Pay system that withdraws funds for payment from the bank account in the name of vendor.If it doesn't go through it gets refunded. How should I account?

Thanks for following up with the Community, kathy47.
 

I'm happy to hear Jen_D was able to help with identifying how you can properly account for a rejected Automated Clearing House (ACH) transaction.
 

I've included a couple resources about working with ACH transactions and QuickBooks that may come in handy moving forward:


Please feel more than welcome in sending a reply if there's any additional questions. I'll be here to help. Have a wonderful day!

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