I'm using Quickbooks Pro 2017. I work on a Cash basis as opposed to Accrual.
A customer double-paid an invoice - but it's a bit confusing as their second payment on that already-paid invoice was included with a correct payment on a second outstanding invoice.
Here are the transactions:
I invoiced client $3410 on 12/7/17.
Client paid $3410 by check on 2/6/18 and I properly recorded the payment.
I invoiced the same client $2750 on 2/28/18 for additional services.
Client paid $6160 by check on 4/2/18 - they paid the correct $2750 for the second February invoice PLUS they paid the December $3410 invoice again (3410+2750=6160).
When I recorded the $6160 payment, I applied $2750 to the appropriate $2750 February invoice but I didn't notice the OVERPAYMENT section on the Customer Payment window and the checkbox was (and still is) marked for "Leave the credit to be used later" instead of "Refund the amount to the customer."
I then cut a company check back to the client for the overpayment amount of $3410. I recorded the refund check to the account "Ask My Accountant/Other Expense."
My Customer Center page now shows negative $3410 for this job for this client.
On my P&L Detail for the month of April I show the correct $2750 income, I don't show the double-payment $3410 on any income line, and I have the refunded $3410 on an expense line coded as "Ask My Accountant."
When I check Job Profitability Detail for both jobs, I have the correct revenue and expenses for each job...the overpayment and corresponding refund are nowhere to be seen.
How do I correct this floating $3410 refund amount?
I sincerely appreciate any help you can provide!!!
Hey there, WMGAZ.
Thanks for joining the Community and providing us with detailed information on how the customer's payment was recorded. I can help you clear out the overpayment for your customer’s record will be in order.
Let me walk you through the steps. To begin, open the check and change the posting account to Accounts Receivable.
Now, go back to the Receive Payment window and apply the credit. For detailed instructions, follow the steps below:
By following these steps, the check is already linked to the invoice and the overpayment will no longer show on the customer’s transaction list.
For future reference, I’m adding a link that will help you record a credit memo or refund.
Feel free to reach out to me if you have any other concerns. Just mention my name and I'll get back to assist you further. Wishing you continued success.
Please Learn from this input. Nothing here is AP. And you don't also make a credit memo; the overpayment is negative AR and the CM also is negative AR = just Doubled it.
The overpayment leaves Negative AR. bottom left of that screen allows you to Create the refund Check. This is AR. That's why you would do manually, then.
"I don't show the double-payment $3410 on any income line"
Because you have Two assets: Banking funds = Negative AR. If you ran an AR Aging Detail, you would see the customer has Negative AR. That never hits the P&L, which is why a Cash Basis entity would never hold or sit on Customer Overpayment or Prepayment as Negative AR, too.
"When I check Job Profitability Detail for both jobs, I have the correct revenue and expenses for each job...the overpayment and corresponding refund are nowhere to be seen."
Because all of this is Balance Sheet. Not income/expense.
Edit your check as AR for the customer name, then apply it in the Original Payment window, where it shows as if that is a new invoice row listed here.
Thank you for your reply.
Unfortunately when I try to open the check and change the posting account to Accounts Payable, I get an error message: "The selected account cannot be used with a customer name. Please choose a vendor from the list."
I had originally tried to code it as AP back when I wrote the check but I received this error message so I chose "Ask My Accountant."
Thank you also for your reply.
You directed me to Edit your check as AR for the customer name, then apply it in the Original Payment window, where it shows as if that is a new invoice row listed here.
On the editing window for the refund check that I wrote to the client, I changed the account to AR and I specified the CUSTOMER:JOB that was associated with the $6160 client payment received (different than the $3410 job that was double-paid).
Then when I go through the Customer Center to this particular job, my refund check appears under the Customer Payment window along with the actual correct customer payment from 2/6/18. I check-marked both my original invoice and my refund check and now the amount has zeroed out. In the main Customer Center / Customer & Jobs viewing windows the negative amount (-$3410) has disappeared.
Have I successfully followed your directions?
Again, thank you both for your responses and assistance!
This: "I check-marked both my original invoice and my refund check"
I do it from the Original Payment, where you had the overpaid amount. The refund check showing AR in its details looks like an Invoice in that screen. Applying the payment to it Closes the rest of the payment that was Unapplied. Because not only did you Refund it, which makes them 0 on the AR Aging Summary; but you Applied it, which means they don't even show on AR Aging Summary, and should not show there unless these amounts are Not Applied to each other.
So, run the AR Aging Summary or Detail; if they are not there, and don't owe you and you don't owe them, then Yes, that is Perfect.
Thanks for joining this thread and adding more information on why the $3410 didn’t show on any income line. I also updated the steps I provided above to help resolve the customer’s issue.
I think we are on the same page here and saying the same thing. I'll attach a screenshot of the Customer Payment screen - I did go in through the Original Payment window where I had the overpaid amount.
I'll also attach screenshots of my AR Aging Detail and Summary screens. Interestingly the overpaid job appears on both AR reports but the amounts are net zero (Detail) or actually zero (Summary).
Hi there, @WMGAZ.
I appreciate you adding a screenshot and coming back to us for additional support. Allow me to join this thread and clear this up for you.
The $3,410.00 shows on the Customer Payment screen because you posted the transaction to your A/R. Another, your Aging Summary report is perfectly right since they don't owe you and you don't owe them. It shows a zero amount because it offsets the opening balance.
That's it. Let us know if you have other questions about reports or transactions. We're always here to help you out. Have a good one.
Please Learn from this input.
The AR Aging Reports are Wrong. When a customer name is at 0, there is not supposed to be a row for that name At All, on that report.
The Math is 0, but the unlinked transactions still are Aging. That is Wrong. That doesn't treat an invoice as paid or a refund as applied. These are Unapplied to each other, even though the math shows 0.
"Interestingly the overpaid job appears on both AR reports but the amounts are net zero (Detail) or actually zero (Summary)."
Pay attention to the date on that report; if you Applied a payment from Feb to a Refund in April, all of that is 2018, then from that Feb date forward, this Customer should stop showing on the Open Balance and AR Aging reporting, because they are not supposed to have any Open Balances that Age.
There should be no "0" total in Summary.
There should be no Transactions listed in the Detail report that show offsetting each other.
So, you are Almost there.