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Level 1

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

Best Answers
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Level 10

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

@RickDerris 

@Anonymous

 

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.

 

CUSTOMER SALES TRANSACTION LIST CUSTOMER SALES TRANSACTION LIST

 

 

View solution in original post

7 Comments
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Anonymous
Not applicable

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

Highlighted
Level 10

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

@RickDerris 

@Anonymous

 

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.

 

CUSTOMER SALES TRANSACTION LIST CUSTOMER SALES TRANSACTION LIST

 

 

View solution in original post

Highlighted
Level 1

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,

Highlighted
Level 1

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

We were recently caught by a scam where they ordered products and prepaid by credit card, including the cost of freight forwarding. We sent money to the freight forwarder (bogus).  The scam artist then revoked the credit card charge and we are on the hook for the freight cost as this is unrecoverable.  My question is, how do I get the inventory back in?  I created a credit memo/check against the invoice so there is no outstanding balance.  If I void the invoice, to return the products to inventory, will I not be left with an outstanding credit? 

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QuickBooks Team

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

Hello there, @PILLC.

 

In QuickBooks, a credit memo can be applied to the next invoice. While you use a refund receipt when the customer asks for a refund. 

 

You'll want to create either a credit memo or refund receipt so the item will be returned to stock. 

 

Here's how to create a credit memo:

  1. Go to the +New icon.
  2. Select the Credit memo.
  3. Fill in the necessary fields.
  4. Click Save and close

Then, here's how to create a refund receipt:

  1. Go to the +New icon.
  2. Select the Refund receipt.
  3. Fill in the necessary fields.
  4. Click Save and close

You can check out these articles for better guidance:

I'll be right here in case you meant anything else. I'll keep an eye on your response.

Highlighted
Level 1

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

Hi Grace,

Thanks for the quick reply!  While the credit memo closes the invoice as paid, it does not seem to return the stock to our inventory.  I prefer not to delete or void the invoice because it is evidence in the fraud so I beginning to think the only way may be to IA the products back into inventory.  Does that make sense or am I missing the subtleties of the credit memo? TY

Highlighted
Moderator

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

@PILLC I can help answer your question. The proper way to bring in your inventory would be to void the invoice to show why the inventory came back.  In your case, since you are needing to keep the invoice as evidence, you may want to seek advice from your accountant in order to record inventory in a way you feel comfortable doing. 

 

Let me know if you have additional questions.

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