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Experienced Member

Customer overpayment, refund and account receivable

A customer paid $200 on an invoice of $150 i.e. they overpaid $50 on the invoice. 

I sent them a check for $50.

Then followed the Refund Receipt workflow to record the payment of $50 to customer.

 

But the Accounts Receivables still show negative $50  (-$50) balance against that customer.

Since I already paid back to the customer, the Account Receivable should be zero'ed out.

 

How do I fix this? 

12 Comments
Established Community Backer ***

Re: Customer overpayment, refund and account receivable

1. Click on the plus (+) icon

2. Select Check or Expense under Vendors header

3. Select the customer from drop down that need refund

4. Go to Account under Account details = Accounts Receivable (A/R).

5. Enter the Amount = refund amount

6. Click on Save.

 

Refund receipts are often used when a customer credit card or ACH charge is rejected or returned and a bank feed deposit will need to be reduced by the amount "taken back", the refund receipt is posted to undeposited funds so that it can be included with other deposits.

Established Community Backer ***

Re: Customer overpayment, refund and account receivable


@somani_vivek wrote:

 

I sent them a check for $50.

Then followed the Refund Receipt workflow to record the payment of $50 to customer.

 

 


Did you match the Refund Receipt with the check in For Review? Or did you record the check separately?

Experienced Member

Re: Customer overpayment, refund and account receivable

I am using Quickbooks online.

When I go to Expense screen, I do not see "Accounts Receivables" in the Payment Account drop down. 

Experienced Member

Re: Customer overpayment, refund and account receivable

I sent the check outside of Quickbooks. 

When the debit bank transaction was pulled in automatically by QBO, I matched it with the refund receipt.

The bank balances match all fine, but I have the negative entry in the AR.

QuickBooks Team

Re: Customer overpayment, refund and account receivable

Pleased to have you here, @somani_vivek.

 

To zero out your customer's balance and Accounts Receivables, let's create an expense transaction here's how:

 

  1. Click the Plus Icon (+).
  2. Go to Expense.
  3. Choose the name of the customer.
  4. Select the same bank account used in processing the refund.
  5. In the Category Details section, choose Accounts Receivables in the Category column.
  6. Enter the complete expense details.
  7. Click Save and Close

 

That should do it! For additional insights about processing customer's refund, you may check out these articles:

Please don't hesitate to visit us here in the Community if you have other questions about clearing out your customer's balance. I'm always here to help.

Established Community Backer ***

Re: Customer overpayment, refund and account receivable


@somani_vivek wrote:

I sent the check outside of Quickbooks. 

When the debit bank transaction was pulled in automatically by QBO, I matched it with the refund receipt.

The bank balances match all fine, but I have the negative entry in the AR.


Refund receipt is the wrong document. Delete it.

Create a check transaction and in the place where you normally enter what expense it is for select Accounts Receivable. 

Then to apply the open credit to this debit  create a zero Receive Payment and check them both off, so the net is zero. Save

Community Contributor *

Re: Customer overpayment, refund and account receivable

Thank you Malcolm!  I've been searching for hours on this.  All the other answers pointed me to the refund receipt mechanism.  Your answer actually made sense and worked!

Community Contributor *

Re: Customer overpayment, refund and account receivable

When you create the expense and then match it with the zero payment, what account to "deposit" the funds to? There has to be something chosen, even though it's not being deposited. Thanks!

Established Community Backer ***

Re: Customer overpayment, refund and account receivable


@helphomeschoolgr wrote:

When you create the expense and then match it with the zero payment, what account to "deposit" the funds to? There has to be something chosen, even though it's not being deposited. Thanks!


It 's not an expense. it's a Receive Payment. The "deposit" to doesn't matter. Just use the bank account

Community Contributor *

Re: Customer overpayment, refund and account receivable

That is what I meant, sorry for the confusion.  When I receive payment and match it to the expense I created there is still a deposit to field.  I can't just leave it blank.  Whatever "bank" I choose the money shows up there as an additional amount.  Maybe I am doing something wrong--created expense against A/R, then receive payment choosing that expense.  But the deposit to is creating a stumbling block for me.

QuickBooks Team

Re: Customer overpayment, refund and account receivable

Hi there, @helphomeschoolgr.

 

I appreciate you getting back to us and for performing the steps provided on this thread. Allow me to chime in for a moment and share additional information about where to deposit the expense you've matched with zero payment.

 

As mentioned by @Malcolm Ziman, you can choose any bank on the deposit to field since you're just offsetting the unapplied payment (overpayment). To make sure that I'm on the same page, I'll appreciate if you can provide us a screenshot of the bank you're referring to the money that is showing as an additional amount.

 

I'm looking forward to your response, @helphomeschoolgr. Have a great weekend.

Established Community Backer ***

Re: Customer overpayment, refund and account receivable


@helphomeschoolgr wrote:

That is what I meant, sorry for the confusion.  When I receive payment and match it to the expense I created there is still a deposit to field.  I can't just leave it blank.  Whatever "bank" I choose the money shows up there as an additional amount.  Maybe I am doing something wrong--created expense against A/R, then receive payment choosing that expense.  But the deposit to is creating a stumbling block for me.


The total net amount or value of the Receive Payment s/be zero. There s/be 2 amounts checked off; a positive amount and the same amount as a negative, total = zero