I entered and paid a bill twice. Now the client has refunded the overpayment. How is it best to record this and deal with the dupe bill?

Hey there, emb2. 

Thanks for dropping by the Community, I'm happy to help you out today. What you'll want to do is record the overpayment as a tip. 

Step 1: Add an income account to track tips

1. Go to the Accounting menu and select Chart of Accounts.
2. Select New.
3. For Account Type, select Other Income.
4. For Detail Type, select Other Miscellaneous Income.
5. Enter a Name, like "Tip Revenue" and select Save and Close.

Step 2: Create a tip item

1. Go to the Settings ⚙ icon and select Products and Services.
2. Select New, then Non-inventory.
3. Enter a Name, like "Tips."
4. For Income account, select the account you created in step 1.
5. Select Save and close.

Step 3: Record the extra money as a tip

1. Go to the Sales menu, select Invoices.
2. Select New Invoice.
3. Go to the Sales menu, select All Sales.
4. Select New transaction, then select Invoice.
5. Enter the Customer. In the Products/Services field, select the tip item you created in step 2.
6. Select Save. If your credits are set up to apply automatically, you're done. Otherwise, select Receive Payment.
7. Select the credit and then Save and close.

State laws vary on unclaimed funds. If your customer paid you too much in error, you should contact them and arrange for a refund. 

You can find the steps to complete this process in the following article. 

If there's anything else I can help with, feel free to post here anytime. Thanks for dropping by and have a lovely day. 

Hi there, thanks for the replay however I was referring to a vendor bill. They billed us and I entered the same invoice twice and paid it twice so I have two of the same invoices paid ie I doubly paid them. They have now refunded me the money back for the duplicate invoice I paid. 

I would just like to deposit the refund and have it traced back to the 2nd invoice paid in error

thank you!

Thanks for sharing clarifications to your concern, emb2.

Let's get this done so you're able to record the refund from your vendor bill in QuickBooks Online (QBO).

First, enter a vendor credit and use the correct expense account.

1. Go to the + New icon.
2. Select Vendor credit or Receive vendor credit.
3. In the Vendor dropdown, select your vendor.
4. 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 credit for.
5. Click Save and close.

Then, you can deposit the money by following the steps below:

1. Go to the + New icon.
2. Select Bank Deposit.
3. In the Account drop-down menu, select the account where you got the refund.
4. In the Add funds to this deposit section, fill out the following fields.
5. Select Save and close.

For the final step, you can use Pay Bills to connect the bank deposit to the vendor credit.

Here's how:

1. Go to the + New icon.
2. Select Pay Bills.
3. Choose the bank deposit you just created. You’ll see the amount of the vendor credit in the Credit Applied field. The Total payment should be $0.00.
4. Click Save and close.

If your customer used a credit card on a purchase, you can refund a credit card payment on the sales receipt or invoice.

For your reference about the complete process of refunding a vendor: Enter a refund from a vendor.

To help you with the future task and tips when using QBO, you might want to visit our Help Articles.

I'm just a post away if you have other questions or concerns. We're always here to lend a hand. Thanks for posting and I wish you have a lovely day ahead.

Hey Nick_M,

After entering vendor credit, why we have to add funds manually when we have received the deposit in our banking, can't we just match somehow both of them?

Hello there, @King_Omer. 

Thank you for posting here on the Community page. It would be my pleasure to help you with any questions you may have about entering vendor credit. 

As my colleague Charies_M mentioned, you can enter vendor credit and then create a bank deposit that affects Accounts Payable (AP). Once done, you can use Pay Bills to connect the bank deposit to the vendor credit. 

Keep me posted in the comments if you have other concerns about managing your deposit transactions in QBO. I'll gladly help. Take care, and I wish you continued success.