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Level 1

Balancing Customer Account after Refund Issued

I work for a contractor, and we require a 20% deposit before work is completed. So we do not invoice in QuickBooks online until the work is completed, so the deposit amount is just an open balance on the customer until we enter that invoice.

 

My current situation is that we had a customer cancel their work and we refunded her deposit of $1,247. This part has already been handled, by doing a refund receipt in QB online and I printed the check from QB online. But that still left the customer's account showing an open balance of -$1,247 (even though they technically add together to 0), so I was told to enter an invoice to equal it out, but now that shows as income on our P&L statement, and clearly we did not keep any of that money.

 

What is the correct procedure here and why doesn't the refund automatically balance out the payment entered previously???

1 Comment
Moderator

Balancing Customer Account after Refund Issued

Hello @obradley,

 

Let me help share information about how you can fix your customer's balance to avoid posting it as an income into your accounts.

 

To start with, the income showing in your Profit and Loss came from the invoice you created for the remaining balance even after creating a refund receipt. Also, the refund receipt will not offset the remaining balance of your customer since it'll post the amount into the affected product or service.

 

With this, you'll have to delete the invoice and refund receipt. Once done, create a check and post the amount directly from our customer's account receivable so you can remove the remaining balance. Let me show you how.

  1. Go to the +New button.
  2. Select Check.
  3. Under Payee, select your customer with the remaining balance.
  4. Below the CATEGORY column, select your accounts receivable.
  5. Enter 1247 as the amount to refund.
  6. Click Save and close.

Learn more about handling your customer refunds with this article: Record a customer refund in QuickBooks Online.

 

Additionally, I've got you this helpful article for the steps in creating a document showing all your customer's transactions: Create and view customer statements.

 

If there's anything else that I can help you with, please let me know in the comments. Stay safe!

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