Adjust overpayment on vendor bill

Your solution worked perfectly.  Thanks very much!

How does that work when reconciling the checking account?

Thanks for chiming in on this thread, Ps_25.

Depending on the situation, please make sure you have all the necessary transactions like Deposit and Bill Credit recorded. This way, you can match them to the downloaded transactions showing up in the Bank Feeds.

To see the different scenarios of recording the vendor credit, you can read this article: Record a vendor refund in QuickBooks Desktop.

Once done, go to Banking > Bank Feeds > Bank Feeds Center. Then, match the vendor transactions to the downloaded ones. 

When you're ready to reconcile, you can check out this link for the instructions: Learn the reconcile workflow in QuickBooks.

If there's anything else you need, please feel free to leave a reply below. We're always around to help. Take care and stay safe.

How would I do the same thing in Quickbooks ONline?

I appreciate you for joining this thread, @randialynch. I'll make sure you can record the overpayment from your vendor and apply it to any future bills in QuickBooks Online (QBO).

We can record this as a vendor credit in QBO. Let me walk you through the steps:

1. Open your QBO account, then click the (+) New button.
2. Choose Vendor credit.
   
3. In the Vendor dropdown, select your vendor.
4. Depending on how you record purchases with this vendor, enter the Category details or Item details. 
5. Fill in the necessary information.
   
6. Select Save and close.

Then, you can apply a vendor credit toward any open or future bill. When you’re ready to use the credit, follow these steps to proceed:

1. Click the + New button.
2. Choose Pay bills.
3. Select a bill for your vendor from the list. You'll see the available credit with this vendor in the Credit Applied field.
4. Complete the rest of the fields like you normally do when recording bill payments.

For more information about this process, you can refer to this article: Handle vendor credits and refunds in QuickBooks Online.

In case you want to record a vendor refund in QBO, you can follow the steps outlined in this article: Enter a refund from a vendor.

Additionally, you may open this article to view details on how to run a particular report that will reflect all payments made to vendors: Run a report with vendor totals.

Please let me know if you have additional questions or concerns about handling overpayments in QBO. I'll be here every step of the way. Keep safe!

Would you also go back and correct the bill you entered to have the correct amount? Will this cause any issues?

Hello there, @upanddownaccounting. 

Yes, you can, and I'm here to help you correct the amount you entered in that bill. 

We can void the bill if it has been processed and create a new one. Let me guide you on how:

1. Go to the Expenses menu and look for the bill payment you’re working on.
2. Open the transaction or click the drop-down icon to Void.
3. Click Yes to confirm the action.

Otherwise, we can cancel if it hasn't been processed and enter a new one. Beforehand, ensure that to be within the time frame to avoid issues: 

• A bill payment created through Online Bill Pay before 3 PM PST can be canceled until 4 PM PST on the banking day before the Process Date.
• A bill payment created through Online Bill Pay after 3 PM PST can be canceled until 6 PM PST on the banking day before the Process Date.

When you’re ready to cancel, please refer to this article: Cancel a bill payment in Online Bill Pay. 

For more insights into voiding a payment in Online Bill Pay, see this helpful guide here: Void an Online Bill Pay payment.

Moreover, I’ve added these helpful resources that provide an overview of the cut-off time when to cancel or void an online bill payment and contain steps that can help you along the way in paying your bills: 

• Cancel or void payment cut-off timing in Online Bill Pay.
• Pay bills in Online Bill Pay.

Please let me know if you need clarification about bills or other QuickBooks Online-related concerns. I'll be standing by for your response. Have a great day, and stay safe.

What if the client wants the payment back. We recently had a client pay off the same invoice twice. It was a substantial amount. Then when they realized their mistake they took that amount back out of my account. It was pretty disturbing, but this is a great client and they were changing banks at the time. Can I just add the debit and credit to the same account? (The reason I ask, it it seems that anytime you mess with any debt or credit in the clients account it turns into a nightmare of corrections.)

I have a question. OK I go and issue a credit to be applied later but what account should I use on the overpayment line?

How do I process the refunded overpayment in QBO?

I appreciate you for joining us here in the thread, @Sibyl.

In QuickBooks Online (QBO), how you handle refunds will depend on how you record your purchases. I'll walk you through the process to get you going. 

If you enter expenses or write checks, here's how to manage the refund:

1. Access your QuickBooks Online company.
2. First, make sure you have already created the initial expense or check in QuickBooks and assigned a Category/Account to it.
3. Select + New and then Bank Deposit.
4. Go to the Add funds to this deposit section:

• Enter the amount refunded by the vendor and choose the Category/Account that you selected on the initial expense or check.
• If this refund was for an expense that you linked to a customer or project, select the Track returns for customer checkbox, then select the customer or project. That way, your costs will not be overstated.

       5. If you deposited customer payments for invoices into the bank account along with the vendor refund, add them in the Select the payments included in this deposit section.

For other ways to manage refunds, feel free to check this page: Enter vendor credits and refunds in QuickBooks Online.

Moreover, I've got this article to help ensure your data stays accurate inside QBO: Run reports in QuickBooks Online.

@Sibyl, I'll be here in the Community if you need further assistance with this. You can also post here again if you have any additional QuickBooks-related concerns. Take care!

Hi Kurt,

I did as you suggested but my vendor records still show a credit. How do I match the check received by the vendor with the credit for the overpayment I made? 

Here is what happened: I paid a vendor invoice and the amount of the invoice was reduced after payment. I revised the amount of the vendor invoice and now have a credit. Did my error lay here? 

Thank you for your help!

Thanks for giving that suggestion a try, Sibyl.

After reading your explanation, I would recommend changing the invoice back to the original amount that you paid. Then, include a note in the memo section about the price being reduced after you made your payment. Once that's completed, you will have a credit to be applied to a future purchase from this vendor.

It's always a good idea to discuss these types of actions with your accountant. If you don't currently have an accountant, you can find one in your area who is specifically trained in QuickBooks by searching here: Find a ProAdvisor

Please don't hesitate to reach back out if you have any other questions or concerns. Assistance is only a comment or post away.

Hi MorganB,

Thank you for your reply. We do not anticipate any future work with this vendor. Do you have any other suggestions? 

Sibyl

I see, Sibyl. No problem.

In this instance you can record the refund as a deposit. This is explained in steps #2 and #3 in the "Deposit a vendor credit when no expense has occurred" section of the Enter vendor credits and refunds in QuickBooks Online article.

Here's how:

1. Click the + New button.
2. Select Bank deposit.
3. In the Account dropdown menu, select the account where you got the refund.

4. Fill out the following fields in the n the Add funds to this deposit section: 

• Received from: Select the vendor who gave you a refund.
• Account: Select Accounts Payable. Important: You need to pick Accounts Payable so you can tie the refund to the vendor credit. This may seem a little strange, but it’s the best way to do this.
• Payment method: Enter the method your vendor used to refund you.
• Amount: Enter the amount of your refund.

The you're ready to use Pay Bills to connect the bank deposit to the vendor credit:

1. Click + New.
2. Select Pay bills.
3. Choose the bank deposit you just created. You’ll see the amount of the vendor credit in the Credit Applied field. The Total payment should be US $0.00.
4. Click Save and close.

That will get the credit taken care of. I'll be here if you have any other questions!

That solved the problem, thank you so much!

Awesome! That's great to hear, Sibyl. You know where to come if you ever need a hand again in the future.

Kevin C - I entered the overpayment in the bill payment, where it shows up as a credit (we accidentally paid $10 over the invoice amount).  If I instead record it as a vendor credit, it will not match to the bank feed for the total amount of the check.  The vendor has now sent me a refund, which I have deposited but cannot figure out how to  credit to the vendor to get rid of that -$10

Hi Morgan B - I followed your instructions and instead of getting rid of the credit I had already created - the vendor's total now shows double the credit! Help, what have I done wrong? 

I know the steps on how to sort out the vendor credit to match your bank feed, Mary. I'm here to guide you through the process for a seamless experience.

Since you have received your vendor's refund, you can record Bank deposit affecting the Accounts Payable (A/P) in QuickBooks Online (QBO). If you have already created a Vendor credit, you can now link both transactions through Pay bills. Here's how:
 

1. In your QBO account, click on +New, then select Pay bills.
2. Locate and select the vendor to which the credit was applied.
3. Once ready, select Save and close.

See the images below for a visual reference of the process. Note: The images contain dummy names only.






 

Moreover, you may also want to check out this article to learn specific ways to customize your reports to get awesome insights in QuickBooks: Common custom reports in QuickBooks Online.
 

Kindly leave a reply if you require further assistance with refunds or have additional QuickBooks-related queries. I'm just around to assist you anytime. 

It has come to the point that QBO has become so janky it's time to learn a new platform. I am not sure if they wanted to mess their base up so bad to possibly achieve more  training income or what. Every day its a new glitch or buried item that use to be transparent before. HATE THE NEW CHANGES>

DHeraV - I followed those steps and ended up with double the credit for my vendor.  Perhaps because instead of creating a vendor credit, I entered the full amount as payment for the invoice, leaving me with the same $10 credit.  If instead I enter the overpayment separately as a vendor credit, I cannot match that check in my bank feed

It seems to be solved - I ended up calling QB support and she had me create a bill from the vendor, apply the credit, then make a deposit from the vendor to other income. She  assured me it won't change their net amount when we send their year end 1099's