How to record a QuickBooks payment reversal

I've got some steps we can perform to reverse the QuickBooks Payments, Jeffrey Dickson.

We can void the transaction by using the Reverse a Transaction feature in your Merchant account.

Proceed as follows:

1. Sign in to your QuickBooks Payments account.
2. Tick the Processing Tools drop-down and select Reverse a Transaction.
3. Fill out the necessary fields.
4. Tap Search.
5. Choose the transaction you want to refund.
6. Press Submit.

We can also use the Reverse (Void/Credit) option in your QuickBooks Payment account to reverse the payment.

 Let me show you how:

1. Click the Activity & Reports drop-down and select Transactions.
2. Enter the date period.
3. Tap Search.
4. Choose the Transaction ID or the transaction you want to reverse.
5. Hit Reverse (Void/Credit).
6. Place a checkmark on the transaction.
7. Press Submit.

For more details about this one, check out this article: Void or refund transactions in QuickBooks Payments. 

Visit our Merchant Services page for more insights about managing your QuickBooks Payments. 

Tag me in a comment below if you have other questions about refunds in QuickBooks Payments. I'll be around to help you out. Have a great day, Jeffrey Dickson.

Michellebh, thank you for the response!

I'm not sure this is quite what I need help with, maybe I'm describing it incorrectly. The credit card payment has already gone through and was recorded as a QuickBooks payment to the register after saving the Bank Deposit. The credit card was then declined, the charges were reversed and QuickBooks charged us the amount of the invoice that was declined. How do I record those expenses against the invoices marked as paid? If I recall correctly, don't I need to set up a new "card declined service" in products and services or something along those lines?

Hi @Jeffrey Dickson,

I appreciate you for getting back with some clarification about the payment issue. I'm here to help handle the failed credit card payment in QuickBooks Online.

Yes, you're right. You'll need to create a service item to track the rejected payment from the customer.

Here's how:

1. Go to Settings ⚙ and select Products and Services.
2. Select New and then Service.
3. Enter "Rejected credit card payment" for the name.
4. Add "Credit card payment received rejected by the bank" for the description.
5. If the bank deposit is already deposited, select the bank account you deposited into for the Income account. Or if you haven't made the bank deposit yet, select Undeposited funds for the Income account.
6. Select Save and close.

Rejected credit card payments or ACH transfers have the same process for insufficient funds. Once done, you follow the remaining steps in the order shown in this article (scroll down to Step 3): Handle a rejected or failed bank transfer payment.

If you need more help, you can contact our Payments Team. Our support is available from 6 AM - 6 PM PT (Monday - Friday).

You can reach them through these steps:

1. Go to: Contact Payments or Point of Sale Support.
2. Click Chat with us under QuickBooks Payments.
3. Enter the necessary information. 
4. Hit Start Chat. 

Additionally, I've attached a link you can check out to learn more about what to do if customers' credit card payments get declined when you process them: Fix customer's declined credit card payments.

Leave a comment below if you need more assistance with the declined customer payment in QuickBooks. I'm always here to help. Take care.

Hi! I have the same problem but with Paypal. My client purchased an item but never received the item. As a result,  my client has a Paypal Payment Reversal with matching initiated user withdrawal with the same amount. How to record this? 

Thanks!

Welcome to the Community, @Mav95. I'll be happy to guide you in recording a customer refund.

The PayPal payment appears as a credit card transaction in the Merchant Service Center. With this, we can reverse the payment by voiding the received transaction.

However, since you've already performed the reverse payment, we can record the refund manually: 

1. Select + New, then choose Refund receipt.
2. From the Customer dropdown, select the customer you are refunding.
3. Fill in the fields with the same information as the original sale.
   • Choose a PayPal from the Payment method dropdown to issue a refund to their credit card. 
   • Select Direct Debit from the Payment method dropdown to issue a refund to their bank account.
   • Note: If Direct Debit is unavailable in the Payment Method dropdown, click + Add New, then Save.
4. From the Refund dropdown, choose the account from which you want to issue the refund.
5. Select Save and Close.

Additionally, if your funds are on hold, please refer to this article for guidance: Why are my funds on hold?

Let me know if you need further assistance recording a refund or have any QuickBooks-related concerns. Keep safe. 

I have a similar issue, but can't seem to come up with a solution that matches. A customer paid, and then the job was cancelled, so i reversed this payment. How do i add this reversal into my "deposits" so that I deposit the correct amount for the day? Their payment was deposit a day before and I can't figure out how to deposit the correct amount for today. HELP! 

Thank you for visiting the Community with your inquiry about recording your reversed payment in your QuickBooks Online (QBO), Skyles. Let me help you address this matter.

We can create a deposit, then add a line item with the negative amount of the payment posting in the Account Receivable to offset the reversed payment made with your customer. To do this, kindly follow the steps below:

1. Go to the +New tab, then select Bank deposit under Other.
2. Choose a Bank account in the dropdown, then choose the payment included in the deposit.
3. On the Add funds to this deposit section, pick Accounts Receivable as the account.
4. On the Amount section, ensure a negative sign (-) is added to offset the payment amount.
5. Make sure to fill out other information needed. Once done, click Save and close.

After that, unlink the first payment with the invoice to set the invoice status as open.

Here's how:

1. Go to the Sales, then select Customers.
2. Look for the customer you created the deposit, and double-click the name to open the transactions.
3. Look for payment, then click View/Edit.
4. Unmarked the invoice where the payment is linked.
5. Once finished, click on Save and Close.  
6. Tap Save as credit when the prompt appears, and select Yes.

Then, link the newly created deposit to the unapplied payment using Recieve Payments.

1. Go to the +New tab, then choose Recieve payment.
2. Choose the customer with the deposit made.
3. In the Outstanding Transactions section, mark checked deposit created.
4. On the Credits section, mark check the Unapplied Payment.
5. Once done, click on Save and close.

Moreover, I recommend seeking guidance from your accountant before performing the steps. If you need help finding an accountant, this can help you find one: Find a QuickBooks ProAdvisor.

Additionally, you can create reports and customize them based on your preferences and business in QBO. You can refer to these materials below:

• Run reports in QuickBooks Online
• Customize reports in QuickBooks Online

Let me know if you have further concerns with the reversed payment in your QBO, Skyles. You can reach out to the Community at any time. Take care!

Thanks for the quick response. I unfortunately do not have QBO, we use the desktop edition. Can you walk me through it for Quickbooks Desktop? 

Thanks for your prompt reply, @skylesdrilling.

Let me walk you through how QuickBooks Desktop (QBDT) reverses an invoice payment.

You can un-apply the invoice payment. Then, void the invoice transaction to clear this in your financial reports.

Here's how:

1. Go to Customer Center.
2. Select the customer you need to unapply the payment.
3. Look for the payment transaction and click it.
4. Click the Un-Apply Payment above.
   - If you want to retain the payment as available credit for that customer, don't delete the amount in the Payment Amount section.
5. Once done, click Save & Close.

You can visit this article to learn how making credit memos works in QBDT: Give your customer credit or refund in QuickBooks Desktop for Windows.

After that, you can Void the invoice transaction if you still want to see its record. Or Delete it to remove the transaction from the system.

Feel free to follow the steps below:

1. Go back to the Customer Center and select the same customer.
2. Pick the invoice transaction you'll Void or Delete.
3. Click the Delete dropdown above.
4. Choose either Delete or Void.
5. Once done, click Save & Close.

If you're utilizing QuickBooks Payments in reversing invoice payment deposits, you can read this article: Void or refund transactions in QuickBooks Payments.

You may want to learn how to show debits and credits for each transaction to have a more focused view of amounts and accounts. Check out this article: View the Transaction Journal report in QuickBooks Desktop.

Let me know if you have additional questions about managing your customer payments in QBDT. We'll be willing to lend a hand. Keep safe, and have a good one.