Vendor Overpayment/Applying Refund to Credit

Hello, amber-nabyheck.

I'd like to verify, is the difference amount deducted as a bank fee? When recording the vendor refund, you can create a bank deposit and include the difference amount, then record a credit and combine them using the bill payment.

If you're unsure about the process, please consult with your accountant. They'll be able to give you the best accounting advice for your business. Don't have an accountant? Please feel free to can visit our Intuit Find-A-ProAdvisor site to find certified professionals near you.

To record a bank deposit for the vendor overpayment, you can follow these steps:

1. Go to Banking > Make Deposits.
2. If the Payments to Deposit window appears, select OK.
3. In the Make Deposits window, select the Received from drop-down and choose the vendor who sent you the refund.
4. In the From Account drop-down, select the appropriate Accounts Payable account.
5. In the Amount column, enter the actual amount of the Vendor check. For the difference, you can add the fee as a line item.
6. Select who the fee was from (for example, the bank charging you). from the Account drop-down.
7. Enter the amount fee as a negative number. For example, if the difference amount was $34.47, enter –34.47.
8. Review the deposit total with the fee.
9. Enter the remaining information in the Deposit.
10. Hit Save & Close.

After creating the deposit, record a Bill Credit for the amount of the Vendor Check.

Here's how:

1. Go bank to Vendors > Enter Bills.
2. Select the Credit radio button to account for the return of goods.
3. Enter the Vendor name.
4. Select the Expenses tab and enter the Accounts you would normally use for refunds. Note: If you are not sure which account to select, Intuit recommends contacting your accounting professional.
5. In the Amount column, enter the appropriate amount for each Account (the amounts may have to be prorated.)
6. Click Save & Close.

Once done, link the Deposit to the Bill Credit by following these steps:

1. Go back to the Vendors menu, then select Pay Bills.
2. Check the Deposit that matches the Vendor check amount.
3. Select Set Credits and apply the Bill Credit you created earlier then select Done.
4. Select Pay Selected Bills, then select Done.

For reference, please check out this article: Record a vendor refund in QuickBooks Desktop. To learn more about the features in your QuickBooks Desktop for Mac, feel free to open this guide: QuickBooks Desktop Mac 2021 User’s Guide.

You're welcome to post a reply here if you have additional questions about recording the vendor refund or other concerns managing your account. I'll be around to help you out. 

I do not have the option to Set Credits.

Hi there, @amber-nabyheck.

Thanks for getting back to us. Can you share with me a screenshot of the window when opening the Pay bills menu? This way, I can provide you with the right steps to address the issue.

In the meantime, I'd recommend updating QuickBooks Desktop for Mac to its latest release. This way, we can ensure you have the latest features and fixes. 

Here's how:

1. From the QuickBooks▼ drop-down, select Check for QuickBooks Updates.
2. If a newer version is available, select Install Update.
3. When prompted, select Install and Relaunch.
4. When the update is complete, QuickBooks for Mac automatically opens.

If you're still getting the same result, run the Verify and Rebuild Data tools. This will help identify the cause of the issue and fix it.

Before you get started, make sure to backup your company file.

In case you're still getting the same behavior, you can clean install QuickBooks for Mac. This removes QuickBooks with the installation files that were left behind to reinstall the program from a clean slate.

I'm also including our Help articles for related references in managing your account and transactions. 

You're more than welcome to visit this thread again if you have other questions. Just add the details of your concern here and I'll help you out.

Hi,

This is what my bill pay screen looks like.

Thanks,

Amber

Hello again, Amber!

Thank you for sharing a screenshot. The steps for linking the deposit to the bill credit provided by my colleague above work for QuickBooks Desktop for Windows version. Not to worry, I'll guide you on how to do it in the QuickBooks for Mac version. 

First off, you'll need to identify if you initially recorded an overpayment in QuickBooks. If so, you don't have to enter a bill credit. The overpayment will automatically show as an available credit. Otherwise, you'll have to enter a bill credit to track the amount. Then, apply it to the deposit. You'll see both in the Pay Bills window. Make sure you selected Accounts Payable when you recorded the bank deposit so it'll show up as an open bill. 

Here's how:

1. Choose Vendors  and then Pay Bills. 
2. Sort bills the vendor name to show both the deposit and the credit.
3. Mark these two transactions.
4. Choose the account you’re paying the bill from. 
5. Click OK.

You may refer to this article for more information: Entering a credit from a vendor.

Let me know how it turns out and if you need further assistance. We're always here to ensure your success. Have a good one, @amber-nabyheck.

Good day,

We accidentally paid one of our vendors for the same invoice, once in April and then again in May, and neither side caught it until well after both cheques cleared the bank. Even though this was noticed during May's month-end reconciliation, I didn't hear from the vendor regarding this issue until today. Now I have a cleared cheque showing in QBD with no bill attached to it. The vendor has given us a credit for the amount towards future invoices, but I cannot figure out how to turn that cheque into a credit to apply to our current bill in Quickbooks Desktop. Please advise on the best way to do this. 

Edit: I am very sorry as I thought I had created a new thread for this instead of replying on this one, which doesn't quite pertain to my situation. If I need to create a new thread, please let me know.

Thank you!

It's awesome to have you here, @sharieb.

You don't need to create a different thread. I'm here to help you link the check credit to an unpaid bill. To do this, you must update the line item on the check to Accounts Payable.

Here's how:

1. Open the check.
2. Remove the existing line item and replace it with the Accounts Payable account.
   
3. Make sure the name and amount of the check is the same.
4. Once done, save the entry.

To apply the check as payment

1. From the Vendors menu, select Pay Bills.
2. Locate the bill and choose Set Credits.
   
3. For the Credits tab, select the available credit and select Done.
   
4. Press Pay Selected Bills, then Done.

Post here anytime if you need further help with applying vendor payments or credits. I'll be right here to ensure your balances are correct and assist you with managing your expenditures. Have a good day!

Thanks for getting back to me so soon! Unfortunately, it's not letting me do it this way. When I try to save this cheque after changing the line, I get the error message "Transaction split lines into accounts payable must include a vendor on that line". There is only one line, and all I did was remove it and try to add a new one. I looked this up and the only fix I could find for QBD (not from Intuit but an accounting site) was to change the Accounts Payable account to "Other Current Liability". That is greyed out though, and cannot be changed.

Thanks for replying to me immediately, @sharieb.

Don't worry, you only need to assign the name of the vendor to resolve the error, and to close the transaction. For the Accounts Payable account, add the name under Customer: Job column. Also, using a different account other than A/P will not allow you to link the check to an existing bill.

Follow this screenshot to see how the entry is done:

Kindly reach out back to me again if you need other QuickBooks help besides this billing concern. I'll be right here to share some assistance always. All the best!

Sorry but this still isn't working. I can only add customers to "customer job", not vendors. I created a customer account for this vendor, and I was able to switch the cheque over to Accounts Payable BUT because the credits are now assigned to a customer and not a vendor, they do not show up when attempting to pay this bill.

We don't use customer jobs, so I don't really know how to work with that part of QBD.

Welcome back,sharieb.

I appreciate your time to make us updated with the results of the steps you've tried.

To be able to link credits, you'll need to link it with a sales transaction. Your situation requires an expert advice from an accounting professional. I recommend reaching out to your accountant for tips on how to handle your concern. This is to make sure everything is accurate and prevents your books from messing up.

For tips and related articles in the future about the "How Do I" steps in QuickBooks Desktop, visit our QuickBooks Community help website for reference.

Reach out to me with whatever questions you may have about anything QuickBooks. It's my pleasure to assist you. Have a good one.

Hello Charies,

I would REALLY appreciate if the person who was trying to help me continue trying to help, and if they can't they can speak for themselves and say so. Telling people after they've already messed around with things based on advice given here to just "ask your accountant" to help fix it is a complete cop-out and, in my opinion, terrible customer service. Our accountant charges $250 per half hour by the half hour, and that's more than the amount of this credit, so asking our accountant isn't really an option in this case.