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shawna1
Level 2

Unapplied Cash Payment Refunds

Customer was invoiced. Customer paid invoice in full, bringing the invoice to a ZERO balance. After payment is made and invoice is closed, invoice is adjusted which now leaves an amount in the unapplied cash payment account. The customer needs to be refunded and since the invoice is paid and closed, I'm unsure how to do that without deleting the entire transaction and re-applying to show we owe them money and send a refund. 

 

 

11 Comments 11
Malcolm Ziman
Level 10

Unapplied Cash Payment Refunds

You should not change an invoice from a previous month if you issue monthly reports as this changes the history, and especially not if the invoice was paid. It would be better to create a Credit Memo, which is a negative invoice; it sounds like a reduction of the invoice i.e a credit, is what happened.  If you don't mind changing the history, then it can be left as is.  To close the open credit, code the payment to the customer to AR/Customer. That will automatically apply to the open credit if you left the default setting

VivienJ
QuickBooks Team

Unapplied Cash Payment Refunds

I got you covered, shawna1!

 

Thanks for clearly explaning the scenario you're in right now! One of our Allstar peers (partnered accountant) @Malcolm Ziman provided a great explanation above on how to handle this type of transaction. Allow me to provide additional option on how you can resolved this. 

 

You'll also want to give your customer the refund by creating a Check. This will also be the transaction you can use to link with the Unapplied payment and zero out the balance. 

 

To create a check: 

  1. Go to the Create button, then select Check.
  2. In the Choose a payee field, enter the customer's name. 
  3. Select Accounts Receivable under the Account column.
  4. Enter the amount you want to refund. 
  5. Click Save and Close (please see sample screenshot below). 

To apply the check to the unapplied payment:

  1. Go to the Create button, then select Receive Payments.
  2. Enter the customer's name in the Choose a customer or project field. 
  3. Choose a payment method. 
  4. Put a check mark in the Check under the Outstanding Transactions section.
  5. In the Credits section, place a check mark in the Unapplied Payment box. 
  6. Click Save and Close (see screenshot below). 

Here are articles for future reference:

You are now set to record the transactions you need. If you have additional questions, please don't hesitate to get back to the Community. This is the perfect place to connect with accountants and other users regarding QuickBooks. 

 

I'll be around, anytime! 

Create Check.PNG Receive Payment.PNG

shawna1
Level 2

Unapplied Cash Payment Refunds

It makes sense to do it this way, but will it remain in the unapplied payment report? 

JamesDuanT
Moderator

Unapplied Cash Payment Refunds

Hello shawna1,

 

In addition to VivienJ's answer, the amount will be removed from the Unapplied Payment report since it was used as payment of the check. When paying the check and applying the Unapplied Payment, make sure the AMOUNT RECEIVED is zero (0.00). You can use VivienJ's screenshots above.

 

If you need more clarifications about this, feel free to let us know.

 

sb123
Level 1

Unapplied Cash Payment Refunds

Did all the steps and the amount is still showing up in unapplied credits.  QBO issue?

RenjolynC
QuickBooks Team

Unapplied Cash Payment Refunds

Good day, sb123.

 

You'll want to open the payment if the credit was fully applied. Here's how you can check the information:

 

  1. Go to Sales > Customers.
  2. Select the customer's name.
  3. Find and open the payment where you have previously applied the credit.
  4. If you see the check under Outstanding Transactions and doesn't have a checkmark, put a check on the box.
  5. Hit Save and close.

Once done, go back and check the customer's balance.

 

For future reference, you can check this article: Record a customer refund in QuickBooks Online.

 

Please let me know if there's anything else you need. I'll be around to help you some more. Thanks.

twoodland
Level 1

Unapplied Cash Payment Refunds

I am following all of the steps, but what if my refund check that I created is not showing up under the Outstanding Transactions?

Candice C
QuickBooks Team

Unapplied Cash Payment Refunds

Good Afternoon, @twoodland

 

Thanks for joining in on this thread. Let's get this issue sorted out. 

 

There could be several reasons why you're not able to see the refund check under the Outstanding Transactions portion. Examples: (the wrong name entered in the A/R account, have the apply payments automatically setting turned on, etc.) 

 

With that being said, can you provide me with some screenshots of the refund check and the Outstanding Transaction section? After I receive this additional insight, I'll be able to determine the best solution for your business. 

 

In the meantime, you can check out these articles below to help you in the future: 

 

 

I value you as a customer. The Community strives to provide the best possible support. When you're ready, just hit the Reply button below and give me the information need to resolve your problem. I'll be back around shortly!

twoodland
Level 1

Unapplied Cash Payment Refunds

Check created receive payment

twoodland
Level 1

Unapplied Cash Payment Refunds

I attached the screenshots the check and the receive payment portion. I also checked my settings and automatically applied payments are checked off.

Nick_M
QuickBooks Team

Unapplied Cash Payment Refunds

Hi there, twoodland. 

 

Thanks for dropping by the Community this afternoon. I'm happy to provide some feedback. The screenshots provided are very helpful. based off of that, it looks like the issue lies in the Category section. I noticed you're using the '40442 Overage - SMS' account. What you'll want to use there is actually the 'Accounts Receivable (A/R)' account. 

 

Thy this and let me know how that works for you. Thank you for your time and have a lovely evening. 

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