Customer's balance still show negative, after issuing a refund to the customer credit card.

To elaborate- the part that is showing as negative is at the very bottom under "total". The customer's "open" and "overdue" entries at the top are zero. 

Not sure if this helps, or is the issue, but  Once the refund receipt is completed, you have to match it with the refund receipt you’ve processed in Quickbooks.

1. On the left panel, click on Banking.
2. In the For Review tab, locate the refund.
3. Select the transaction, click on Find Match.
4. In the Match transactions page, choose the refund receipt.
5. Click on Save.

You may find this article handy in the future: How to Void or Refund a Credit Card Payment?

Hello there, ASBGS.

I appreciate Just_me providing some steps to get this fix. Allow me to chime in and share information on how to refund a credit card payment from a customer in QuickBooks Online (QBO).

Instead of creating a refund receipt, we'll need to create a written check affecting the Accounts Receivable (A/R)and link it to the credit card payment. This will offset the negative balance. Here's how to delete the receipt.
 

1. Go to Accounting and choose the Chart of Accounts tab.
2. Locate the account and click on the View register link under Action.
3. Hit on the refund transaction and choose Edit.
4. Tap More at the bottom.
5. Hit Delete.
6. Press Yes to confirm.
    

Once done, let's create a check to the bank affecting the (A/R) of the customer with the positive amount of $2,500. Here's how:
 

1. Tap the + New Plus icon.
2. Click Check.
3. Tap the Payee from the drop-down.
4. From the Bank account drop-down, select the account the check withdraws money from.
5. In the Category column, choose the A/R account.
6. Enter the positive amount of $2,500. in the Amount column.
7. Hit Save and close to close the check window.

Moreover, with refunds or return transactions, you may incur a fee depending on your pricing plan and transaction type. For further details, check out this article: Understand fees for refunds or void transactions.

Fill me in should you need further assistance with this refund process. The Community team will always here to help. Have a great day ahead!

matching transactions from the bank feed will not fix it (matching from  a bank feed just keeps the transaction from being double posted).  If you look in the transaction journal for the refund receipt, you will see that it credits the undeposited funds account and debits an income account. It shows up on the customers account but it is not actually posted to Accounts Receivable hence there is nothing to apply to the customers credit balance.  I do not understand why they don't give you the option to post to A/R instead of an income account but that is the case.  The simplest fix is to:

1) create another Customer invoice (I use the same invoice # as the refund receipt with an appendage to distinguish yet connect the entries.) and use the same product/service as the refund receipt.  The debit on the refund receipt and the credit on the invoice will cancel each other out so there will be no affect on income (which there shouldn't be with an overpayment) but allows for a debit to A/R

2) If in same month, just re-open the original payment and apply the overpayment to the invoice and you're done!  (This is what I did in the sample copy & pasted below.)

3) If not in same month, "receive payment" for $0 on the new invoice you just created and apply the overpayment 

It's a pain but the simplest work around I have found.  I tried calling support to see if there was any other work around but they knew less than I did.

I did what DebSheenD recommended but as the image shows, they have not canceled each other out.

Please advise.

I'm here to guide you on what you can do so customer balance will show the correct amount instead of negative number, AjayK76.

There are several ways on how you can give refunds in QuickBooks Online (QBO). For credit card refunds, they have a few requirements. I've provided the list below:

• Credit card refunds can only go back to the original card used for the purchase. You may need to contact your customer to get this info.
• You can refund up to the amount of the original sale, but not more.
• You can only issue credit card refunds within 90 days of the sale.

You'll want to refund credit card payments by following the steps below:

1. Select + New.
2. Select Refund receipt.
3. Select the customer you want to refund from the Customer ▼ dropdown.
4. Enter the details in the fields using the same info from the original sale. To credit back their credit card, in Payment method, select Credit card. To credit back their bank account, in Payment method, select Direct Debit.
5. In Refund From, select the account you wish to refund the customer from.
6. Select Save and close.

However, if you want to refund a customer who paid you with a credit card right from the sales receipt, invoice or associated payment, I've provided the steps below:

1. Go to Bookkeeping then Transactions then All Sales (Take me there), or go to Sales then select All Sales (Take me there).
2. Find and select the sales receipt, invoice, or payment.
3. In the footer, select More, then Refund.
4. A refund receipt opens with all of the information from the customer form automatically filled in, such as payment method, the refunding account, and customer details. Verify that everything looks correct.
5. Optionally, you can give a partial refund. Just adjust the items or amount you want to refund.
6. Select Save and close.

To give you complete details and steps when refunding credit card payments, go through this article for your reference: Void Or Refund Customer Payments In QuickBooks Online.

Moreover, when QuickBooks downloads automatically the latest transaction, it looks for and tries to match with transactions you've already entered into QuickBooks. To give you more information, check out this article for more details: Categorize And Match Online Bank Transactions In QuickBooks Online.

You can always get back us to us if you have any other concerns about refunding payment. Remember, we're always right here to help.

I’m not referring to credit card payment.  The client paid with a check and I refunded with a check to Accounts Receivable under their account.  Does it make a difference that I was using an iPad to do the transaction?

Good day. I appreciate you getting back to the thread. I'm here to help you sort things out.

In this case, there's no difference even if you process the refund using your iPad as long as the payment goes through without any error.

I'm adding this article for guidance in recording refunds in QuickBooks Online: Record a customer refund in QuickBooks Online.

You can also check out the following article for future reference:

• Categorize and match online bank transactions in QuickBooks Online
• Reconcile an account in QuickBooks Online

I'll be around if you need more help managing your QuickBooks account. Take care!

Did you find a solution for this problem that corrected the negative total balance on the customers page?

Let me point you in the right direction on how to correct your customer's record, staysmart.

A negative balance occurs if a customer pays more than the invoiced amount. In QuickBooks Online (QBO), you can create a credit memo, enter a refund receipt, and write a check or expense to clear up the balance.

However, the process is scenario-based. You can go over this article for more in-depth information: Record a customer refund in QuickBooks Online. From there, follow the steps that best fit your situation.

You can find more information on resolving net zero balances, managing delayed credits, and handling credit memos by browsing the following links:

• Clear up customers with zero net balances in the Accounts Receivable Aging report
• Create and apply credit memos or delayed credits in QuickBooks Online

You can go over these references to learn more about managing your income and other sales-related transactions:

• Invoices and payments
• Sales and customers

Reach out to me again if you have clarifications about clearing your customer's balance or have other QuickBooks concerns. I'll get back to respond to them. 

I just don't understand why it is set up this way. What is the purpose ? I have read everywhere and tried to understand that but could not find the answer 

If i use quickbooks just as a bookkeeping tool for records. Not to process payments. 

1-Why do i have to issue a credit memo ?? What is the purpose of that ?

2- if i made a sale of 100 dollars then refunded the 100 dollars, why does it show -100 dollars at the bottom ?

3- and why issuing a refund by going to + new ..refund receipt.. it does not reduce the balance of the invoice ? 

Thanks for getting back to the Community, KalRe.

Allow me to share some insights regarding your concern about how credit memos and refund receipts function in QuickBooks Online.

In QuickBooks Online credit memos reduce the price of an item purchased by a buyer or eliminate the entire cost of an item. When a seller issues a credit memo, it's put toward the existing balance on a buyer's account to reduce the total. You can check this article to learn more about how and when to give a credit memo or delayed credit to customers: Create and apply credit memos or delayed credits in QuickBooks Online

Moreover, a refund receipt is a record that shows that you have issued a refund to someone. It indicates the source of the refund (cash or checking account), the recipient of the refund, and the specific product or service for which the refund is being given. The refund amount is displayed as -100, similar to a credit memo. The main difference is that with a credit memo, no money leaves your cash or checking account; instead, it is saved as a credit that can be used as payment for a future or open invoice.

It will not reduce the balance of the invoice since it is another transaction that can't be linked to the invoice, since it is another process of the transaction.

Additionally, we recommend you visit the following articles as your future references:

• How to record a customer refund in QuickBooks Online
• Void or refund customer payments in QuickBooks Online

If you have any more questions or if you need further assistance in handling your credit memos and refund receipt. I'm just a reply away. Have a lovely day!

Thanks for your reply .

I understand the purpuse of credit memos and refund receipts. 

1- What i don't understand is the process to issue the refund. Why would i need to create a memo first. For example +$100 credit . And then issue a refund of - $ 100 ( negative)

2- why does it show the negative balance at the bottom ? Does the negative mean that a refund has been issued ?  Cause when i create an invoice of $ 100 , the balance is 100. 

Then i receive payment of $ 100. Now the balance is 0 ( since it is all paid ) 

Then when i issue the refund, it shows - $100. Does the negative just means that the balance was paid in full but a refund was issued and it stays negative and that is just how qb operates or it should be zero ? 

I'll clarify the process of issuing customer refunds in QuickBooks Online (QBO) using a credit memo, @KalRe.

In QBO, you need to create a credit memo if your customer wants to use it to reduce the balance on their next invoice.

Yes, you're right. The negative amount indicates that the balance has been paid and a refund was issued. You may leave it as is if your customer wants to apply this credit to future invoices. Otherwise, please refer to the steps below on how to zero out the balance on your customer's account:

1. Go to + New and select Expense.
2. Select the customer's name in the Payee field.
3. Choose the bank account in the Payment Account field.
4. If you haven't yet, create a Debtors (Accounts Receivable) account and select in the Category column.
5. Enter the Amount and click Save.
6. Go to + New and select Receive Payment.
7. Select the Customer. The balance should be zero since they will cancel each other out.
8. Click Save and Close.

For a detailed step-by-step guide, refer to Step 2: Make the refund in the Customer Refund if the invoice has been paid section in this article: Record a customer refund in QuickBooks Online.

Furthermore, here's a guide to help you handle your customers' outstanding balances in QBO: Manage outstanding balances for customers and vendors in QuickBooks Online.

If you have other clarifications about customer refunds, please don't hesitate to reach out back to us. We'll be glad to explain further. Stay safe.

@KalRe 

You've been receiving bad advice from QB employees.  @JaeAnnC's response of "The negative amount indicates that the balance has been paid and a refund was issued. You may leave it as is if your customer wants to apply this credit to future invoices." is contradictory and incorrect.

To answer your questions:

1) You don't need to create a credit memo first, you can just create a refund receipt.  A credit memo is issued when the credit will be applied to a future invoice.  A refund receipt is best when you want to issue a refund.

2) If you have -$100, then the customer has a $100 credit balance that can be applied to future invoices.  Issuing a refund receipt does not create a negative balance.  It doesn't affect the customer's A/R balance at all.  So, if you are showing -$100, you issued a credit memo or some other entry that credited A/R $100.  If you issued the $100 refund receipt, you can delete the entry causing the -$100 balance.  

1) i am using refund receipt to issue refunds. And that's why it is showing the negative amount AT THE BOTTOM. Refund receipt changes the bottom mount buy not the balance due for some reason. 

2) and you said if it shows negative that means i did not issue a refund but a credit memo. But i did go to + New , refund receipt. So the refund receipt is working as a credit memo ?. That's the confusion. I read everywhere .. noone really explained it in details what happens in every step to all accounts. Qb employees don't know lol that is the only explanation i could have.  They dont know. Cause if they do , they would explain it step by step ..mentioning the effects on the accounts related to every step and the reasoning behind it. ( why it is done that way )

It seems like you are just copying and pasting previous responses.

If i issued a refund, why would i choose to use it as a credit for future ???? That does not make sense. It is a REFUND. that means it is already applied. It is DONE. I DONT UNDERSTAND WHY YOU CONNECT REFUNDS WHICH ARE NEGATIVE ( MONEY OUT OF THE ACCOUNT) TO CREDIT MEMO WHICH CAN BE USED IN FUTURE OR REDUCES THE BALANCE . THAT'S A BIG DIFFERENT 

I think my questions are very clear. 

1) the videos from quickbooks shows credit memo as first step then expense. Why is that ? Why it is not just a refund receipt and it is applied as money out of the account and it adjusts the balance. I want to know the differences , the process and especially the reasoning (Why) and how it affects the accounts in every step 

Hey, @KalRe. 

I appreciate you coming back and expressing your concerns over particular transactions within your QuickBooks Online account. I'd be more than happy to give you a detailed explanation about these transactions. 

Credit memos simply lower the customer's accounts receivable. Therefore, a refund not only credits the customer but also takes funds out of your register (you would've actually sent money back to the customer in this case). 

In a shorter version: Credit memos only reduce the balance owed, while refunds actually send funds back to the customer on top of that (one is more of an adjustment and the other is an actual transaction)

I hope this helps. If you have any further questions, please don't hesitate to come back. We're always here to lend a helping hand! 

@KalRe 

"1) i am using refund receipt to issue refunds. And that's why it is showing the negative amount AT THE BOTTOM. Refund receipt changes the bottom mount buy not the balance due for some reason."

What do you mean "at the bottom".  The bottom of what? 

I'm not sure your understanding of double-entry accounting so if you're fluent with it, please forgive me.  Refund receipts (RR) are a standalone transaction that are used when you are issuing a refund to the customer.  When you create one, you are reducing the account selected under 'Refund From' (credit in double-entry accounting) and increasing or decreasing (debit in double-entry accounting) the account attached to the product/service selected on the RR.  That's it.  It doesn't change any amount due because it doesn't record any amount to A/R, which is the account that tracks the amount due/owed from/to your customer.  A RR is recording the payment made to your customer and the corresponding decrease or increase in your expense/income depending on what product/service you add to the RR.  In other words, the reason for the refund.  RRs do not affect the balance on your customer's account.  If there's a balance, it was not caused by a RR.

A credit memo (CM) is issued when you want to apply the credit to an existing customer invoice or a future invoice.  When you issue a CM, you are reducing the customer's A/R balance as well as decreasing/increasing the account based on what product/service you select on the CM.  If you just want to issue a refund, use a RR, not a CM.  If you have already created a CM and need to issue a refund, that's a different process.