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Established Member

Refunding a partially paid invoice and then voiding the invoice (QBO)

I'm using QuickBooks Online and am having difficulty with a refund

 

On January 1 I invoived a customer for $5000.

On March 1 the customer paid $2000. I used the "receive payment" pull-down to record the payment.

On June 1 the cusomer requested a refund and I sent the customer a check for $2000. I entered the refund using the "refund receipt" entry.

 

I need to "void" the invoice so that it doesn't show up as revenue but the customer's page is not showing a balance of $5000. Instead it shows a balance of $3000. 

 

I'm sorry but I'm a n00b regarding refunds. I couldn't find an answer on the support site after searching it. I found an entry indicating I was supposed to use a credit memo but haven't been able to figure out how to apply it

Solved
Best answer 08-18-2017

Accepted Solutions
ProAdvisor

Re: Refunding a partially paid invoice and then voiding the invoice (QBO)

@RickDerris 

@JohnRedding

 

Creating "Refund Receipt", you've already reduced your sales by $2,000. When you VOID the Invoice, it will reduce sales by $5,000. Instead of using "Refund Receipt", use "Check" form from the Vendor tab, that way, it will show, you're returning $2,000 and will still show $5000 as an open invoice. Select Customer as payee and for an Account, use Accounts Receivable (A/R) account. Don't VOID Invoice (Why? you've already received partial payment against this invoice), instead create a Credit Memo. Lastly, to apply "Credit Memo" against the original invoice, go the Receive Payment tab and check both to clear to zero. After that, you're good. See attached screenshot below for reference.

 

PS: I'm not defending QBO, but merely trying to help users to resolve the issues at hand.

 

Screenshot 2017-08-18 04.13.21.png CUSTOMER SALES TRANSACTION LIST

 

 

3 Comments
Established Community Backer ***

Re: Refunding a partially paid invoice and then voiding the invoice (QBO)

Hi RickDerris, 

 

 

There are a few ways you could approach this, a couple of them are more common in my experience. 

 

You could write off the balance and then use that Journal entry to pay off the Invoice, or you could add a Discount item to reduce the Invoice value by the 3k that is left over. 

 

Let me know if that helps, there are other community members that might be able to offer some advice as well. 

 

- John

ProAdvisor

Re: Refunding a partially paid invoice and then voiding the invoice (QBO)

@RickDerris 

@JohnRedding

 

Creating "Refund Receipt", you've already reduced your sales by $2,000. When you VOID the Invoice, it will reduce sales by $5,000. Instead of using "Refund Receipt", use "Check" form from the Vendor tab, that way, it will show, you're returning $2,000 and will still show $5000 as an open invoice. Select Customer as payee and for an Account, use Accounts Receivable (A/R) account. Don't VOID Invoice (Why? you've already received partial payment against this invoice), instead create a Credit Memo. Lastly, to apply "Credit Memo" against the original invoice, go the Receive Payment tab and check both to clear to zero. After that, you're good. See attached screenshot below for reference.

 

PS: I'm not defending QBO, but merely trying to help users to resolve the issues at hand.

 

Screenshot 2017-08-18 04.13.21.png CUSTOMER SALES TRANSACTION LIST

 

 

Active Member

Re: Refunding a partially paid invoice and then voiding the invoice (QBO)

I use QB Enterprise. Based on the original transaction: invoice and deposit on job, the first thing I did was write a check to the customer for the refund amount. I entered the "accounts receivable" account from my G/L to process the check. Next, I created a credit memo for the entire amount of the invoice (which generated a credit for the customer). Finally, I clicked on "receive payments" from the QB desktop screen, selected the customer, and applied the credit to items associated with the original invoice (this action linked the credit to the original invoice). This sequence brought the transaction balance to zero. The reference to everything done is nicely on display under the customer transaction history.

 

Cheers,