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CarlynCH
Level 1

Recording Refunds for checks already applied to invoices and deposited

I received a customer payment for an invoice "A" and deposited it.  I received a second check for the same invoice and applied it to the next invoice "B" and deposited that check.  Customer now wants a refund for the overpayment so I sent a refund check.  I received a new customer check for invoice "B" but that invoice has technically already been paid.  How do I fix?

3 Comments 3
JamaicaA
QuickBooks Team

Recording Refunds for checks already applied to invoices and deposited

Thank you for visiting the Community today, @CarlynCH.

 

Allow me to provide some information about the issue on how to record a refund in QuickBooks Online (QBO). I want to make sure we're able to fix it.

 

You can use refund receipts if a customer asks for a refund for an item or service. If you entered the refund as Refund Receipt, it will not affect the customer's balance. To correct it, you can delete the transaction and recreate using Check or Expense.

 

You may consider editing the payment as Check or Expense instead of invoice. When creating a check, we can select Accounts Receivable as the affected account.

 

Using Check or Expense to record the refund reduces your bank's balance and offsets the customer's open credit, overpayment or prepayment.

 

Here are the steps we can perform:

 

Step 1: Record the refund for your customer

 

1. Select + New.
2. Click on Expense, Add expense or Check.
3. Select the customer you want to refund from the Payee ▼ drop-down.
4. From the Payment account ▼ drop-down, select the bank account where you deposited the overpayment to.
5. On the first line of the Category column, select Accounts Receivable.
6. Enter how much you want to refund in the Amount field.
7. Fill out the other fields as you see fit, then select Save and close.

 

Step 2: Link the refund to the customer's credit or overpayment


1. Select + New.
2. Select Receive payment.
3. Select the same customer you used for the check or expense when recording the refund.
4. Fill out the other fields as you see fit.
5. Under the Outsanding Transaction section, select the checkbox for the Expense or Check you created when recording the refund.
6. Make sure the payment is equal to the open balance, then select Save and close.

 

For more information about voiding, deleting, and recording transactions, please visit these articles:

 

 

Stay in touch if you still have other concerns or questions about recording a refund. I'll get back to help and make sure you're taken care of. Wishing you and your business continued success.

CarlynCH
Level 1

Recording Refunds for checks already applied to invoices and deposited

The problem is that both payments have been deposited so QBO says they only way I can fix is to start with editing the deposit that has already happened. 

KlentB
Moderator

Recording Refunds for checks already applied to invoices and deposited

I'll guide you in handling this transaction, CarlynCH.

 

To fix this, you'll need to unlink the second payment that was applied to invoice B. Then, record the new payment or check that you've received for that invoice. Here's how:

 

  1. Go to the Sales menu.
  2. Go to the Invoices menu, and then open invoice B.
  3. Click the Payment made link above the invoice number.
  4. Select the payment date to open the transaction.
  5. Click the Clear Payment button, then hit Save and close.
  6. Choose Yes, to confirm the changes.
  7. When you're done, receive the new payment for invoice B.

After that, the unapplied payment will be saved as a credit in the program. You may now follow the steps in this to reimburse an accidental overpayment: Record a customer refund.

 

I'm also adding this article to learn how to give a partial refund and reimburse credit card payment for a paid invoice: Void or refund customer payments in QuickBooks Online.

 

You can always find me here if you need more help in logging your other customer transactions. Have a great rest of the day.

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