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Level 1

ACH Payment Dispute Returned

I had a client reverse an ACH payment two months after the deposit was made.  It appears Quickbooks returned the money to my client and then started withholding Credit Card payments from other clients who paid to get their money back.


The client realized their mistake and processed another ACH payment four months later.  Now I have two payments for the same client and payments from four other clients that went to Quickbooks that never hit my account.  I can't delete the original ACH invoice payment or the Credit Card payments from Quickbooks kept.  


How do I fix this?

1 Comment
Level 6

ACH Payment Dispute Returned

Hi @winemagnum , 

To record a returned payment, you'll have to create a new service item and use it to create an invoice. Then, attach the rejected payment. Lastly, mark the old transaction as unpaid and re-send it to your customer. 


I'll show you how:


First, you'll need to determine if the payment deposit was recorded or not.

  1. Select the Plus icon at the top and choose Bank Deposit.
  2. Go to the area labeled QuickBooks Payments.
  3. Look for the payment in the list. If it is there then it's undeposited. If not, the deposit was recorded to your bank account in QuickBooks.

Next, create a special service item. This will let you account for the rejected payment.

  1. Select the Gear icon at the top and choose Products and Services from the pop-up window.
  2. Click the New button, then choose Service.
  3. Enter the following details:

    If the payment was deposited in QuickBooks

    • Name - Rejected bank transfer
    • Description - Bank transfer payment received but was rejected by the bank
    • Income account - Select the bank account where the payments were deposited to

    If the payment wasn't deposited in QuickBooks

    • Name - Rejected bank transfer
    • Description - Bank transfer payment received but was rejected by the bank
    • Income account - Undeposited funds
  4. Leave everything else blank.
  5. Hit Save and close.

Then, create a new invoice which you can send to your customer.

  1. Go to the Plus sign icon and hit Invoice from the pop-up window.
  2. Select the customer name in the first field.
  3. Enter the Rejected bank transfer item you just created in the steps above. (Do not use the original product/service you used on the invoice).
  4. Add the total amount of the invoice including tax if applicable. (Do not mark as taxable).
  5. Select Save and close.


Step 4: Attach the rejected payment to the new invoice.

  1. Open the original invoice for the customer.
  2. Select the Payment link to open the rejected payment.
  3. Uncheck the original invoice and select the new one.
  4. Hit Save and close.


The account balance is now set and you can resend the original invoice to collect the payment.


Please visit this article for the complete steps in handling a returned payment reverse payments . Comment back, cheers.

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