Vendor refunded overpayment with check

Jan_P · ‎May 10, 2022

I accidentally entered the same invoice twice and paid both invoices. Once I realized what I did I voided the 2nd invoice which left us with a credit of 429.60 because of overpayment. Now the vendor has mailed us a check for the 429.60. How can I account for this in Quickbooks desktop? If I do a deposit under the vendor in the AP account it doubles their credit balance. I want to get the vendor's account to a zero balance without voiding the original payment because it has been reconciled. Newbie to QB....please help, thanks!

Giovann_G · ‎May 11, 2022

Welcome back, Jan_P.

I'll share another way to record overpayment refund in QuickBooks Desktop.

The steps outlined by my colleague above are the normal process of recording the vendor's refund. Based on your situation, you've voided the 2nd invoice that is already paid which left credit for your business.

In cases like this, all you have to do is to record a deposit for the mailed vendor check that you received. Then, you can link the deposit to the bill credit. I'll show you how.

Here's how to record a deposit of the vendor check:

Go to the Banking menu, then Make Deposits.
If the Payments to Deposit window appears, hit OK.
In the Make Deposits window, click the Received from dropdown and choose the vendor who mailed you the refund check.
In the From Account dropdown, select the appropriate Accounts Payable account.
In the Amount column, enter the amount of the vendor check.
Fill in the remaining information in the Deposit.
Once done, hit Save & Close.

Now, you can link the deposit to the bill credit.

Here's how:

Go to the Vendors menu, then Pay Bills.
Checkmark the Deposit that matches the vendor check amount.
Select Set Credits and apply the Bill Credit.
Click Done.
Choose Pay Selected Bills, then Done.

I'm also adding this article if you need to delete or void a check payment for future reference: Void or delete a bill or bill payment check.

Should you need additional help in recording the overpayment? If so, please let us know. We're always here to assist you.

View solution in original post

AileneA · ‎May 10, 2022

Hello, Jan_P.

Thank you for reaching out to the Community. You'll have to create a vendor credit and apply the credit to a bill. This way, you can apply the overpayment you've made to the invoices or bills you've received from a vendor.

Create a Credit for the Original Vendor:

Click the Vendors menu and select Enter Bills.
Press the Credit radio button.
Enter the Vendor's name.
Choose the Expenses tab and enter the Accounts on the original bill.
From the Amount column, enter the appropriate amount for each Account (the amounts may have to be prorated).
Hit Save and Close.

To apply the credit to a bill:

From the Vendors menu, select Pay Bills.
Check the Deposit that matches the Vendor check amount.
Select Set Credits and apply the Bill Credit you created earlier. Click Done.
Hit Pay Selected Bills and select Done.

Don't worry, we got you covered for each scenario. Check out for further details about Record a vendor refund in QuickBooks Desktop.

Additionally, to further guide you in managing your vendor credits and other expense transactions in QBDT, I'd recommend checking out this article: Accounts Payable workflows in QuickBooks Desktop.

Let me know in the comments below if you have any other questions. I'm always around to help. Take care and have a great day.

Jan_P · ‎May 11, 2022

Hello AileneA,

Thanks for the reply. I will not be getting anymore bills from this vendor. Their account is showing a credit without entering that check in for deposit yet. If I put the deposit in it will double their credit balance. Is there another way to get their balance to zero, or maybe I'm just not understanding what you said lol.

Giovann_G · ‎May 11, 2022

Welcome back, Jan_P.

I'll share another way to record overpayment refund in QuickBooks Desktop.

The steps outlined by my colleague above are the normal process of recording the vendor's refund. Based on your situation, you've voided the 2nd invoice that is already paid which left credit for your business.

In cases like this, all you have to do is to record a deposit for the mailed vendor check that you received. Then, you can link the deposit to the bill credit. I'll show you how.

Here's how to record a deposit of the vendor check:

Go to the Banking menu, then Make Deposits.
If the Payments to Deposit window appears, hit OK.
In the Make Deposits window, click the Received from dropdown and choose the vendor who mailed you the refund check.
In the From Account dropdown, select the appropriate Accounts Payable account.
In the Amount column, enter the amount of the vendor check.
Fill in the remaining information in the Deposit.
Once done, hit Save & Close.

Now, you can link the deposit to the bill credit.

Here's how:

Go to the Vendors menu, then Pay Bills.
Checkmark the Deposit that matches the vendor check amount.
Select Set Credits and apply the Bill Credit.
Click Done.
Choose Pay Selected Bills, then Done.

I'm also adding this article if you need to delete or void a check payment for future reference: Void or delete a bill or bill payment check.

Should you need additional help in recording the overpayment? If so, please let us know. We're always here to assist you.

Jan_P · ‎May 11, 2022

Ok that worked!! Thank you so much. I'm still very confused how that happened though...lol. So by depositing that into account payable that kind of created a bill for that vendor to use the bill credit on? Here I was thinking if I deposit the check that it would double the credit. Thank you again, I appreciate your help

Candice C · ‎May 11, 2022

Hey, @Jan_P.

Thanks for coming back and letting us know how the steps went.

I'm so glad that we were able to provide you with some instructions on how to handled this situation.

Reach back out if you have any other questions or concerns. We're always here to lend a helping hand. Best wishes!

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Vendor refunded overpayment with check