Clearing overpayment from supplier for return of funds

Glad you made it here, markatmakinity.

I've got you an article on supplier credits and refunds that will help you with how to handle this in QBO. Please check this out: How do I handle supplier credits and refunds?

You can also use this link if you wish to apply for the credit as payment to future bills: How to enter outstanding balances for customers and vendors

For future reference, check out how to reconcile an account in QBO.

Tag me in a comment below if you need more help.

Not helpful. Please read my entire situation and what I want to do. I am already fully aware of the information you sent to me.

Hello, markatmakinity. 

Thank you for getting back to us. You can record your supplier refund by creating a deposit transaction under accounts payable. Then you can link the bill and deposit by applying vendor credits. Let me show you the steps. 

1. Select + New icon at the left corner.
2. Choose Supplier Credit.
3. From the Supplier field, select the appropriate supplier name.
4. Enter the Date, Amount, and Account (the account used here is typically the original expense account on the original bill).
5. Fill in the other necessary fields.
6. Hit Save and close.

Once done, enter the Supplier Refund in the Deposits screen:

1. Tap + New.
2. Choose the Bank Deposit.
3. In the Add funds to this deposit section, fill in the following fields:
4. Received from: Select or enter the Supplier name.
5. Account: Select the Creditors (Accounts Payable) account.
6. Amount: Enter the Supplier refund amount. Here is an example of a completed Bank Deposit: 
7. Press Save and close. 

Then, Link the Supplier Refund Deposit to the Supplier Credit. 

1. Click + New.
2. Select Expense or Cheque. Note: Both Expense and Cheque recognise and record the expense. When you use Cheque, the transaction adds to the list of cheques that you can print.
3. From the Choose a payee drop-down, select the supplier name.
4. Leave the Ref/Cheque no, Date, Amount, and Memo fields blank.
5. In the Add to Expense or Add to Cheque section, select Add for the outstanding bill and supplier credit.
6. Hit Save and close.

For more information about the refund process to a different scenario, you can refer to this article: How do I handle supplier credits and refunds? 

You can also create a journal entry to offset the supplier credits. Before doing this, I recommend consulting an accountant to guide you in offsetting the amount and to assist you with the correct posting account to use. Then, you can refer to this article to see the detailed steps on how to perform JE: Create a journal entry in QuickBooks Online. 

Also, about write off bad debt in QuickBooks, you can check out this article: Write off bad debt in QuickBooks Online. 

Let me know how it goes. I wanted to ensure you get all the help you need. Take care and have a good one.

Hello -

I have attached a screenshot of my current situation. I have paid a supplier for two invoices ($512K and $9600) for a total of $521,600. We overpaid the supplier by $1,033.19 to ensure sufficient funds. The deal was cancelled in the end and so the supplier returned us two payments ($251265.05 and $271232.00) and this resulted in a overpayment to us of $893.05.

I created a journal to move our overpayment of $1,033.19 to bad debt. (Not sure if this was best way to handle) Then, I issued a supplier credit for $521,600, created the two bank deposits and the result is seen in Bill Payment for $893.05

Summary, we overpaid by $1,033.19 above the total of $521,600 and the supplier returned to us $893.05 over the supplier credit of $521,600; netted, we have overpaid the supplier by $140.14 that I would like to write off as Bad Debt.

I need someone to help me, step by step, with simple instructions to account for the situation and write off the $140.

Thanks for following up with the Community, markatmakinity. I appreciate your screenshot. That helps me better understand what's going on.
 

For step by step assistance with your journal entries and getting everything recorded properly, I'd recommend working with an accounting professional.

If you're in need of one, there's an awesome tool on our website called Find an Accountant. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.
 

Here's how it's used:

1. Visit our Find an Accountant webpage.
2. In the Find an expert in section, choose what you're looking for, then use your search field to enter a City or ZIP code.
3. Hit Search.
   
4. Browse through the results and find one that works best for your business. You can click each ProAdvisor's profile to learn more information about their services.
   

Once you've found an accounting professional, they can be contacted through their Send a message form:

1. Use your available text box to introduce yourself. Be sure to include details about the services you're looking for.
   
2. Enter the appropriate info in the Your name, Your email, and Your phone number (optional) fields.
   
3. Select Send message.
   

You'll additionally be able to find many useful resources in our help article archives.
 

I'll be here to help if there's any questions. Enjoy the rest of your day!