Credit / Refunds

If the customer account balance already is negative, do not Also make a Credit Memo. That is Duplicate negative AR using two different methods.

Right now, your Refund check is linked to the Credit Memo. Delete the Credit Memo. Now the payment screen will show the check as open, looks like an invoice in the rows, and you can apply the available credit.

Balance 56K

create credit memo for 23k, create refund via check for 23k, delete credit memo

NOW the check is 23K but the open balance on the check is 46K

Rec. payments - enter 23k in Payment Amount, 

Now what?  If I select the open invoice it is reduced but now I have

Check 23k, open balance 46k; and

payment 23k, open balance $0; and

the overall balance is still 56k for the customer.  

IF I select the check (instead of the invoice) everything is the same except the invoice is still open.

Pleased to hear again from you, @Jfkastq.

Recording your transactions accurately is my priority. Allow me to help walk you through creating a refund transaction to zero out your customer's balance.

For starters, in recording payments in QuickBooks Desktop, transactions will stay under “Undeposited Funds” if a specific bank account is not selected or entered while creating the check. 

To deposit payments and refunds properly, here's the workflow:

1. Create an invoice
2. Record a payment
3. Deposit customer payments
4. Record a vendor refund in QuickBooks Desktop

On the other hand, QuickBooks Desktop has a variety of reports that you can choose from for all of your business needs.  To view the transactions that make up the current balance of each vendor, you can generate the Vendor Balance Details report or the Open Balance report.

Here's how:

1. Click Customer from the menu tab.
2. Select Customer Center.
3. Choose the customer that shows an incorrect available credit.
4. In the Customer Information window, click Open Balance.
5. In the Open Balance Report page, click Customize Report.
6. Click the filter tab.
7. Select Transaction Type.
8. Choose All.
9. Click Ok.

Once completed, it will display all of your transactions that cause an open balance. Kindly ensure to use “Expense Account“ in recording the vendor check not “Accounts Payable“.

If you’re still unable clear your customer's balance on your end, I’d recommend reaching out to Customer Care team. An agent will be able to further assist you via secured remote access.

Here’s how you can contact us:

1. Visit: https://help.quickbooks.intuit.com/en_US/contact.
2. Select your QuickBooks Product.
3. Choose your QuickBooks version.
4. On the Contact Us page, click a topic.
5. Click on the Get Phone Number button to see the support number.

Don’t hesitate to drop a comment below if you have follow-up questions about creating a refund. I’m always here to help.

You never Make a credit memo just to delete it.

"Balance 56K"

So, they Owe you, and that is not negative?

"create credit memo for 23k, create refund via check for 23k, delete credit memo"

No. You either Use the credit memo to apply to the amount owed on the invoice, refund from the credit memo, or Both needs. Do not also Delete it. Things are linked to it.

"NOW the check is 23K but the open balance on the check is 46K"

There is no Open Balance on a Check. That refund check should show it is AR, only.

Perhaps you put the wrong thing on the Credit Memo. That Charge Item you list should be linked to Income, to show it is reversing the Sale. Do not link it to Bank.

"Rec. payments - enter 23k in Payment Amount,

Not unless you have Real Money, too. This is a Real Banking entry.  If you have not got Real Money, the Amount = $0. Otherwise, you just Invented $23k from thin air.

You are doing too many things.

Let's start over!  Can you tell me how to do what I'm asking? 

To be clear: 

Client has a balance on their invoice.  

We have written them a check because they are parting ways.  (client pays a rather large deposit and very little work was done so we are paying them back)

1) account for the check to client

2) show the invoice decreasing in the amount of the check

Please just walk me through the steps and you will have my gratitude :manhappy:

Let's take this one thing at a time:

"Client has a balance on their invoice."

That means they owe you money. If you do not intend to collect, then you use a Credit Memo to write off that balance, and use an item, such as other charge, linked to income, to show you are reversing that sale amount for the remaining balance owed. You Apply them to each other.

"We have written them a check because they are parting ways.  (client pays a rather large deposit and very little work was done so we are paying them back)"

What you never told us is how you Processed it. And why you are not applying what they prepaid to what they owe. Example:

I use an Other Charge type item, linked to Income, on a Sales Receipt and this item is named Prepayment. Later, I use that on a credit memo to apply this as Value to the invoice for the actual sale, to show you your prepayment is being Used Up by applying it to sales.

And if you decide to cancel the work, I put the remaining balance of your Prepayment on one Credit Memo. I apply the portion needed to the Open Invoice. I refund the rest from the Credit Memo. In Desktop, Both Icons are found at the top of the Credit Memo. Please see my attachment.

"1) account for the check to client" <== From the Credit Memo using your prepayment item

"2) show the invoice decreasing in the amount of the check"

Not Decreasing the Check. That's where you went wrong. The check is the Net Payout after their funds are used for the open AR.

In my explanation, the customer credit memo (refund form) is where you put the Total still on hand for the client. The Amount owed back to them is not held here; it is applied to the open invoice and the remaining credit here is refunded on a check.