Posting an overpayment to American Express

Welcome to the Community, @Checksandbalance! To record the overpayment, you can enter it as a vendor credit and then apply it to April's bill. By recording it as a vendor credit, you indicate to the system that your client has more cash in the bank than what was owed on the March bill.

To create the credit, follow these steps:

1. Go to (+) Create and select Vendor credit.
2. Select American Express as the vendor.
3. Enter the $5,000 overpayment amount.
4. Use the same expense account that was listed on the original March bill.
5. Ensure the vendor credit is dated in March to match when the overpayment actually occurred (this keeps your books accurate for that period).
6. Click Save and close.
   

When the April bill comes in, apply the vendor credit by following these steps:

1. Go to (+) Create and select Pay Bills.
2. Find the bill/s and select American Express as the vendor.
3. Choose Mark as paid.
4. On the bill payment page, look under the Outstanding Transactions and Credits sections to see all outstanding bills and available credits.
5. Apply the available vendor credit to the bill/s by checking their corresponding boxes. Click Save and close when done.

If you want to learn how to record refunds for expenses or checks, please visit this article: Enter vendor credits and refunds in QuickBooks Online.

Should you have any questions, please feel free to leave a comment in the thread.

Thank you so much for your response Eduardo, I really appreciate it. I am not sure what expense account to use, since the overpayment was made in error and not related to any expense in March. 
I am going to utilize the credit against April’s expenses which I don’t know as yet. 

In this case what can I do to post this bill so I can do my bank reconciliation for March?

Thanks again,

Ann Marie.

Hi, Ann Marie. First, if you haven’t already, create a prepaid expense account (Type: Other Current Asset). This account will serve as a temporary holding account for the overpayment. You will then record an expense transaction for the $5,000 using this category.

When the actual payment clears your bank feed, you can Match it to both the original bill and this new expense entry. This ensures that your QuickBooks records accurately reflect your bank statement, enabling you to reconcile them effectively.

Beyond that, when you eventually receive the April bill and create the Vendor credit, be sure to select the same prepaid expense account. This effectively clears the balance out and applies it to your actual costs. Before finalizing these entries, I recommend consulting with an accounting professional. They can confirm this is the preferred workflow for your specific business structure and ensure your books remain perfectly organized.

Don't hesitate to reach out if you have further questions. 

@Checksandbalance 

Yikes, you're getting bad advice from QB employees.  They may be AI.  You can't use a Vendor Credit because this doesn't involve accounts payable (A/P). 

Use a Check or Expense transaction.  Select the appropriate bank account as the payment account then choose your AMEX CC liability account as the Category.  Don't select an expense account (or a prepaid expense account) because an overpayment on a credit card is a reduction of your cc liability, not an expense or an asset in the case of a prepaid expense.  After doing that, you should have a $5K credit that can be applied to AMEX cc charges.