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Level 2

Customer overpaid an invoice via check and owner kept the difference. How do I record the transaction for the difference?

Our owner went to a customer and fixed his system. The customer paid the $188 bill with a check for $250.  Our owner came in and asked for the $62 difference back in cash.  I gave it back to him out of our Petty Cash account.  The check was deposited to the Operating Account. 

 

I applied the payment of $188 to the invoice but how do I record the $62 difference so it shows that $250 was deposited into the Operating Account?

I know the next steps would be to make a "Bank Transfer" from Operating to Petty Cash transferring the $62 in then another "Bank Transfer" for Petty Cash to the owner withdrawing the $62 out. 

 

It's that initial $250 deposit that I can't figure out.  I'm sure it is so simple too.  

I have QuickBooks Desktop Enterprise - Contractor. 

Thank you for any help or insight!

Melissa

 

Solved
Best answer January 18, 2021

Best Answers
Level 2

Customer overpaid an invoice via check and owner kept the difference. How do I record the transaction for the difference?

So in essence the full 3-step transaction would be this below because when I did step 1 and 2, everything balanced in reconciliations.  

 

Step 1:  Take in the payment of the $250.00. Apply the $188 to the check and left the $62 open on the customer’s account.   

Step 2: Write a check. Use Petty Cash Bank Account

Pay to the Order of “Owner”.   Amount is $62.00.

Expense Account: Accounts Receivable

Record Customer Job Name

Step 3: Banking: Transfer funds from Operating Account to Petty Cash

 

Just want to be exact so I don't have to ponder it again next time I pull up my notes. :)

View solution in original post

8 Comments
QuickBooks Team

Customer overpaid an invoice via check and owner kept the difference. How do I record the transaction for the difference?

Thanks for reaching out to the Community, Commheat.


Based on the scenario, let's apply the customer payment to the invoice and deposit it to the correct account. Then, create an expense or journal entry to close the $62.00 difference.


If you already have the invoice ($188.00), let’s go to the Customer Payment page to input the payment. Here’s how:

 

  1. Tap the Customers menu at the top to choose Receive Payment.
  2. On the Customer Payment page, tick the box for the invoice you’re working on.
  3. Then, enter $250.00 in the Payment amount field.
  4. Click Save & Close.
  5. In the Payment Credit pop-up, click OK to save the transaction.

I've added a screenshot of how it looks like after following these steps.ov.png

Since the payment is automatically posted to the Undeposited Funds account, make a deposit to post it the operating account. This is to show that there's a $250.00 funds. Follow the recommended steps in this article and go to Step 2: Deposit payments into the Undeposited Funds account in QuickBooks Desktop.

 

To add the expense:

 

  1. Press the Banking menu at the top to choose Write Checks.
  2. Fill in the field boxes with the appropriate information.
  3. Tap the Expenses tab to enter Accounts Receivable.
  4. Then, type $62.00 in the Amount field and enter your customer’s name in the Customer:Job field.
  5. Press Save & Close.

If you wish to use the journal entry, I suggest consulting an accountant. They can recommend the correct account type to use for the debit and credit.


I’m adding an article to help you in the future. It contains solutions on how to provide a credit or refund and track customer transactions:

 

Feel free to visit the Community if you have any clarifications or questions. I’ll get back to answer them for you. Have a great day ahead. 

Level 2

Customer overpaid an invoice via check and owner kept the difference. How do I record the transaction for the difference?

Hi

Thank you for responding. For the most part, this was exactly the answer I was looking for.  I just want to make sure I tagged the correct accounts. 

 

Step 1: I took in the payment of the $250.00

Step 2: I wrote a check from my Operating Account (Was this correct?) and addressed it to the owner of the company (Was this correct?) for $62.00, entered the expense under Accounts Receivable and entered the customer's name in the job field. 

This is great! Next time, I'll be doing it this way however..

I went into the customer's profile and pulled up the $250 payment. I had to apply the $62 overpayment to the $62 Accts Rec written check to make the account zero.  I then went into Reconciliations, clicked on the deposit of $250 and the check of $62 and my operating account no longer balances.  It is now positive $62. What did I do wrong? 

 

But to complete this situation. I gave him the $62 from Petty Cash. Not through our Operating Account.  I need to show the transaction where I deposited the $250 in our Operating Account (step 2) then move the $62 to Petty Cash (step 3) then write him a "check" for the $62 (step 4). 

 

I'm sorry if I added an additional problem!

Melissa

QuickBooks Team

Customer overpaid an invoice via check and owner kept the difference. How do I record the transaction for the difference?

I've come to provide some clarifications on how you can track your customer's payment properly in the system, @Commheat.

 

You'll need to delete the $62 overpayment that you've applied to the Accounts Receivable since this creates a positive amount.

 

To get this sorted out, you need to use the petty cash account when issuing the expense since the $62 was taken out from there upon processing the refund.

 

After that, you may transfer the $62 from the operating account to the petty cash account to reimburse the amount that was used during the refund. This way, your transactions will be recorded accurately and will balance your accounts.

 

Here's how you can transfer funds:

  1. Click the Banking Menu.
  2. Choose Transfer Funds.
  3. In the Transfer Funds From the drop-down, choose US Bank.
  4. Select Regions Bank on the Transfer Funds To drop-down.
  5. Enter the transfer amount.
  6. Click Save and Close

For your reference, I'm also adding here a link that contains instructions on how to issue a refund if you're using QuickBooks Payments: Learn how to void or refund customer payments in QuickBooks Desktop.

 

Please let me know how it goes or if you have any other concerns with QuickBooks. I'll be around to help you out. Have a great day.

Level 2

Customer overpaid an invoice via check and owner kept the difference. How do I record the transaction for the difference?

Hi Betty

Thank you for responding. However, I think I am still confused on that Step 2 deposit transaction part.

 

I deleted/voided all the entries I made except for my initial deposit. Basically, starting from scratch again. Please review my steps and correct where I am wrong.  They way you had me writing the check out to Owner under the Petty Cash Account but still referencing the Accounts Receivable as the expense while tagging the Customer created a Payment in my Operating Bank Account and a double payment in my Petty Cash Bank Account. 

 

Seriously, what am I doing wrote with this simple step? Gathering from what Lila and you are saying, I must write a check for the $62.00. But to whom, out of what bank account, expense it to what account, etc. that will not cause a credit or a debit error?  

 

Step 1:  I took in the payment of the $250.00. I applied the $188 to the check and left the $62 open on the customer’s account.   

Step 2:

Step 3: Banking: Transfer funds from Operating Account to Petty Cash

Step 4: Banking: Transfer funds from Petty Cash to Owner

Moderator

Customer overpaid an invoice via check and owner kept the difference. How do I record the transaction for the difference?

You'll want to create a refund, Commheat.

 

Step 2 is to create a refund and to take the amount out from Petty Cash. Since that's the account used to release the cash handed to the owner. You're doing the steps right from 1 and 3. You no longer need to do step 4.

 

Here's an article to help you in the future: Give your customer a credit or refund.

 

If you're still getting an error with the refund, I recommend reaching out to our QuickBooks Desktop support. They can walk you through the steps seamlessly.

  1. Click Help at the top menu and select QuickBooks Desktop Help.
  2. In the Have a Question? window, enter a topic.
  3. Click Contact us.
  4. Hit the Start Messaging button.

Let me know if you need anything else. 

Level 2

Customer overpaid an invoice via check and owner kept the difference. How do I record the transaction for the difference?

So in essence the full 3-step transaction would be this below because when I did step 1 and 2, everything balanced in reconciliations.  

 

Step 1:  Take in the payment of the $250.00. Apply the $188 to the check and left the $62 open on the customer’s account.   

Step 2: Write a check. Use Petty Cash Bank Account

Pay to the Order of “Owner”.   Amount is $62.00.

Expense Account: Accounts Receivable

Record Customer Job Name

Step 3: Banking: Transfer funds from Operating Account to Petty Cash

 

Just want to be exact so I don't have to ponder it again next time I pull up my notes. :)

View solution in original post

QuickBooks Team

Customer overpaid an invoice via check and owner kept the difference. How do I record the transaction for the difference?

Hey there, @Commheat

 

Thanks for reaching back out to the Community. It's my priority that you're able to correct this information in your QuickBooks Desktop (QBDT) account. 

 

Yes, the information you listed would be correct. You're right on track. If you have any more trouble along the way, you can always contact our Customer Support Team. They have additional tools to help walk you through some more steps. 

 

The Community is always here to have your back. Let me know if there's anything else I can help you with. I want to make sure that you're able to get back to running your business. Have a great day! 

Level 2

Customer overpaid an invoice via check and owner kept the difference. How do I record the transaction for the difference?

Thank you everyone for you help.

Onto the next problem! :)

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