Refunding Customer A for invoice A and applying the payment of Customer B to invoice A

MillieKM · ‎June 02, 2022

Hi There,

Okay I need some help because i'm not sure how to record this all in quickbooks correctly.

So, I have Invoice A. I charged Customer A's credit card for Invoice A. This was a mistake as Customer A didn't need to pay for Invoice A. I refunded Customer A.

Customer B needs to pay for Invoice A. I have charged her card.

How do I document this all correctly in quickbooks to show Invoice A was paid by Customer B. And Customer A was refunded for accidently paying invoice A.

Thanks so much. x

JessT · ‎June 02, 2022

Hi MillieKM,

Welcome and thank you for getting help with your customers' transactions. I'll guide you through moving funds, so it will appear that Customer B paid the invoice of Customer A, and then received a refund.

Step 1: Move money from Cust A to Cust B:

Click on +New and choose Journal entry.
On the first line select A/R, enter the amount in the DEBITS field, and tag Cust B in the NAME field.
On the second line select A/R, enter the amount in the CREDITS field, and tag Cust A in the NAME field.

Step 2: Pay invoice A:

Open invoice A of Cust A.
Click Receive payment.
Select the journal entry in the Credits section.

Step 3: Create a refund receipt using the same item on invoice A. Refund from a clearing account.

Step 4: Move the refund from clearing to A/R to returned to Cust B.

Step 5: Create a Receive payment for Cust B to link the refund and the credits created in step 1.

After settling the payment and refund, you can create a replacement invoice for Invoice A.

Please also know that we have quick references for QBO on the main support page should you need them in the future.

Let me know if you have questions along the way. I'm just right here to continue to help.

View solution in original post

JessT · ‎June 02, 2022

Hi MillieKM,

Welcome and thank you for getting help with your customers' transactions. I'll guide you through moving funds, so it will appear that Customer B paid the invoice of Customer A, and then received a refund.

Step 1: Move money from Cust A to Cust B:

Click on +New and choose Journal entry.
On the first line select A/R, enter the amount in the DEBITS field, and tag Cust B in the NAME field.
On the second line select A/R, enter the amount in the CREDITS field, and tag Cust A in the NAME field.

Step 2: Pay invoice A:

Open invoice A of Cust A.
Click Receive payment.
Select the journal entry in the Credits section.

Step 3: Create a refund receipt using the same item on invoice A. Refund from a clearing account.

Step 4: Move the refund from clearing to A/R to returned to Cust B.

Step 5: Create a Receive payment for Cust B to link the refund and the credits created in step 1.

After settling the payment and refund, you can create a replacement invoice for Invoice A.

Please also know that we have quick references for QBO on the main support page should you need them in the future.

Let me know if you have questions along the way. I'm just right here to continue to help.

MillieKM · ‎June 02, 2022

Hi There JessT,

Wow this looks very comprehensive. I still think we are missing something though.

So. Customer A paid for Invoice A.

I recieved the funded and cleared through the bank.

Customer A called me and said she should not have been charged for Invoice A. She said Customer B is going to pay for Invoice A.

So I did a credit card return to customer A. But I have not yet documented it in quickbooks.

Then Customer B paid for Invoice A.

Also not yet invoices.

So what I have in fron tof me in quickbooks is a payment that shows Customer A paid for Invoice A.

What I haven't documented yet in quickbooks is Customer A's refund of the payment of invoice A and that Customer B has paid Invoice A.

Does this make sense ? How do I show this ?

RoseJillB · ‎June 02, 2022

Thank you for your prompt reply, @MillieKM.

Following the steps provided by my colleague above, should enable you to transfer the money paid from Customer B to Customer A using the Journal Entry (JE). Then, link the payment to Invoice A with Customer A.

Although the payment was initiated by Customer B. With that being said, you can add notes to Invoice A that the amount paid is from Customer B. This way, you’ll be able to track the transaction.

Also, I highly recommend you reach out to your accountant for expert advice. This also ensures us that your books or records are accurate.

Let me know if you have further questions about sales transactions. I’m just one post away from assisting you. Stay safe!

MillieKM · ‎June 03, 2022

You people are great ! Thank you so much for your advice, help and support. :)

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Refunding Customer A for invoice A and applying the payment of Customer B to invoice A