Record a refund for an overpayment or credit in QuickBooks Online

If you have QuickBooks Payments, you can refund a customer who has a credit or has overpaid. This involves creating an expense or check to record the refund and then linking it to the customer's credit to make sure your accounting is accurate.

To issue a refund directly in QuickBooks, check out QuickBooks Payments rates and apply.

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What you’ll need

• The customer's preferred payment method.
• The bank account you are refunding from.
• Details of the original overpayment or credit.

Create a refund expense or check

First, create an expense or check to record the refund transaction.

Follow this link to complete the steps in product

1. Select + Create.
2. Select Expense, Add expense, or Check.
3. From the Payee dropdown menu, select the customer you want to refund.
4. From the Payment account dropdown menu, select the bank account from which you are issuing the refund.
5. In the Category column, select Accounts Receivable on the first line.
6. In the Amount field, enter the total refund amount.
7. Fill out any other necessary fields.
8. Select Save and close.

Link the refund to the customer's credit

Next, link the refund to the specific overpayment or credit on the customer's account. This step is completed automatically if you have automation for applying bill payments turned on.

1. Select + New.
2. Select Receive payment.
3. From the customer dropdown menu, select the same customer.
4. In the Outstanding Transaction section, select the checkbox for the expense or check you created.
   Note: If you have automation to apply bill payments turned on, this step is done for you.
5. Verify that the payment amount equals the open balance.
6. Select Save and close.

Results

After you save the payment, QuickBooks links the refund to the credit, clearing the customer's overpayment balance. Your accounts receivable and bank account balances will be updated automatically.

Related links

• Refund your customer for a paid invoice in QuickBooks Online
• Refund your customer for an item or service in QuickBooks Online
• Void or refund customer payments in QuickBooks Online.