Issuing a refund to a customer?

Hi there, @EthanDale.

Let me help you correct your customer's balance in QuickBooks Online (QBO). 

Before we proceed, can you share with the details you've used when recording these transactions in QuickBooks. Any further info would be much appreciated.

Creating a refund receipt won't directly affect your customer's balance since they are posted in the Accounts Receivable. 

If you wish to record a refund for paid invoices, you'll have to create a memo. Here's how: 

1. Click + New and select Credit memo.
2. In the Customer field, choose the appropriate customer.
3. Enter the Credit Memo Date, Amount, Tax, and Product/Service (This is the category, product, or service you’re getting a credit for).
4. Select Save and close.

This should now affects your customer's balance. 

For more info, you can check out this article: How to refund a customer in QuickBooks Online.

Should you have any follow-up questions or concerns, don't hesitate to post again here in the Community or leave a comment on this thread. Take care and have a good one.

I followed your steps, but unfortunately, it made the situation worse. Now, the customer has a balance of -$75,000 in the Accounts Receivable Aging Summary. He should have a balance of $-25,000. What went wrong?

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@ReymondO wrote:

Hi there, @EthanDale.

 

If you wish to record a refund for paid invoices, you'll have to create a memo. Here's how: 

 

1. Click + New and select Credit memo.
2. In the Customer field, choose the appropriate customer.
3. Enter the Credit Memo Date, Amount, Tax, and Product/Service (This is the category, product, or service you’re getting a credit for).
4. Select Save and close.

 

This should now affects your customer's balance. 

 

For more info, you can check out this article: How to refund a customer in QuickBooks Online.

 

Should you have any follow-up questions or concerns, don't hesitate to post again here in the Community or leave a comment on this thread. Take care and have a good one.

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I'm here to help make sure you're able to fix -$75 000 and properly link your refund, @EthanDale.

Since you're trying to record a refund for a customer that made a prepayment for a project but canceled. That said, you'll need to record the refund as a check or expenses to reduce your bank's balance and offsets the customer's open credit, overpayment, or prepayment.

To fix the -$75,000 of your customer balance, you'll have to delete the credit memo created. Just open the transaction, click the More, then select Delete. Tap the Yes button to confirm.

Then, you can now use a check or expense for the refund. Follow the steps below:

1. Click the + New icon.
2. Select Expense, Add expense, or Check. 
3. Select the customer you want to refund from the Payee ▼ drop-down.
4. From the Payment account ▼ dropdown, select the bank account to where you deposited the overpayment.
5. On the first line of the Category column, select Accounts Receivable.
6. Enter how much you want to refund in the Amount field.
7. Fill in the necessary details, then click Save and close.

Once done, link the refund to the customer's credit or overpayment.

Here's how:

1. Click the + New icon.
2. Select Receive payment.
3. Select the same customer you used for the check or expense when recording the refund.
4. Fill out the other fields as you see fit.
5. Under the Outstanding Transaction section, select the checkbox for the Expense or Check you created when recording the refund.
6. Make sure the payment is equal to the open balance, then select Save and close.

For more information, see this article and proceed to Refund a customer's overpayment or credit section: How to refund a customer in QuickBooks Online.

In case you want to track all the refund receipts that you've processed for the year. You can customize the Transaction List by Customer report. I'm sharing these articles about running reports in case you might need them in your future tasks:

• Customize Reports In QuickBooks Online 
• Common Custom Reports In QuickBooks Online.

Feel free to visit our Sales and customers page for more insights about managing your company's income and customers.

If there is anything else I can do to help you in creating a refund or any QuickBooks concerns, please post a response below. I'm always available to help in case you need it. Have a good one, @EthanDale.