How do I fix a returned payment from customer disputed payment on Quickbooks?

I'll help you fix that, info1627.

Generally, a chargeback will occur when a transaction you processed gets disputed and the money goes back to the payer. To handle this, you'll have to create a service item to track the rejected bank transfer. Here's how:

1. Go to the Sales menu.
2. Select the Products and Services tab.
3. Click New, then choose Service.
4. Enter "Rejected bank transfer" for the name.
5. Enter "Bank transfer payment received rejected by the bank" for the description.
6. If the bank deposit is already deposited, select the bank account you deposited into for the Income account. If you haven't made the bank deposit yet, select Undeposited funds for the Income account.
7. Hit Save and close.

Then, you'll have to create an invoice to record the rejected payment and keep your income and A/R accounts accurate:
 

1. Click the + New button.
2. Choose Invoice.
3. Enter the customer who had the failed bank transfer payment.
4. Add the Rejected bank transfer item you created to the invoice.
5. Enter the total amount of the rejected payment.
6. Make sure Tax is not selected.
7. Click Save and close.

Next, remove the payment that didn’t go through from the original invoice and then move it to the new invoice:
 

1. Open the invoice that has the rejected bank transfer payment.
2. Select the Payment link to open the rejected payment.
3. Uncheck the original invoice, then select the newly created one.
4. Click Save and close.

Once done, you may now manually receive the payment of the original invoice. Additionally, if you were charged a fee for a returned payment, you can pass it on to your customer by adding a rejected bank transfer fee item to the invoice. Just go to the Step 5 section of this page to be guided in doing it: Handle a rejected or failed bank transfer payment. After that, you can resend it to the customer.

I'm also adding this article to learn how to manage returned checks in QuickBooks Online: Record a bounced check using an expense.

If there's anything else that I can help you with, please don't hesitate to leave a comment below. I'll be more than happy to assist you again.

This is confusing to me.  I reached out to QB Online Support and she wasn't sure how to handle a disputed A/R Invoice payment with a repayment and has escalated it to someone higher up.  Still waiting for a call back from last week.

This is what I have:

Original invoice 12/18/21 for $273.11

Payment received 12/18/21 for $273.11

Disputed bank withdrawn amount 01/03/22 for $298.11 (includes $25 bank fee we will absorb)

Payment received 03/21/22 for $273.11

Support had me create a new invoice for "rejected bank transfer" in the amount of  $273.11 dated 03/21/22 (no tax) and then escalated the support case.  Debit and credit are both still sitting in the bank as well as two invoices in sales (one disputed and one open).

Thank you,

TRoyer

Here's how I fixed the error when it happened to me without needed to talk to "support."

1. Go to the invoice and then go to the incorrect payment.
2. Uncheck the incorrect payment from the invoice and apply the incorrect payment as a credit to the customer’s account
3. Now the Invoice is open to receive a new payment.
4. Go to the bank screen where the correct deposit is and match it to the new payment. Now the invoice is correctly paid.
5. QBO won’t match the chargeback expense to the customer. It’s not recognized as part of the Customer Invoice, Payment, Deposit coding.
6. Create a journal entry that debit’s Accounts receivable with the customer name, and credit’s Ask My Accountant.
7. Go back to the customer account and match the journal entry to the account credit to zero it out.
8. Locate where the incorrect payment was coded. If it’s not in Undeposited Funds, then check the bank accounts
9. Change the journal entry to where the payment was coded to zero out the payment.
10. On the bank transaction list, select the incorrect deposit and the chargeback expense and exclude both.

I have figured it out! 

Background: I have the same issue, a customer disputed a charge on accident. They then later paid me.

I had two payments and one invoice. This has been resolved by creating a new invoice for the the payment and then deleting the old invoice.

The tricky part is getting past the "This transaction has been deposited. If you want to change or delete it, you must edit the deposit it appears on and remove it first."

**Before you can do the next step, you have to jump through another hoop. You will have to find your expense in the category and delete the transaction. **

To do this:

- You must first categorize this transaction.

- Go to Transactions

- Go to Bank Transactions

- Find the payment and categorize it under something easy to find. I made a Category called "Returned Payments"

- After you have categorized this, Go to "Reports"  then find the Category in your "Profit and Loss" statement.

- When you expand your Category, you will be able to find this transaction listed.

- Open the transaction and select "more" at the bottom. Then select "Delete"

*Remember the date so you can find the transaction in the next step easily*

Here is how to delete the deposit:

I have figured it out! 

Background: I have the same issue, a customer disputed a charge on accident. They then later paid me.

I had two payments and one invoice. This has been resolved by creating a new invoice for the the payment and then deleting the old invoice.

The tricky part is getting past the "This transaction has been deposited. If you want to change or delete it, you must edit the deposit it appears on and remove it first."

Here is how to delete the deposit:

I have figured it out! 

Background: I have the same issue, a customer disputed a charge on accident. They then later paid me.

I had two payments and one invoice. This has been resolved by creating a new invoice for the the payment and then deleting the old invoice.

The tricky part is getting past the "This transaction has been deposited. If you want to change or delete it, you must edit the deposit it appears on and remove it first."

Here is how to delete the deposit:

This is an old post but I just had the same issue and couldn't find a complete answer on the post. I spent two hours with support telling me to do contradicting things, or things that just flat out didn't work. I could not delete the entire deposit because a customer paid 4 invoices and only two were returned. This is what I did that finally worked. 

1. Go to Sales > Customers > Select Customer and scroll down the transaction list until you find the payment that was returned.

2. Click on the payment and then click "Edit"

3. Uncheck the invoice the payment was applied to. Click Record & Close - a box will pop up asking if you want to apply it as a credit. Click Save as a Credit.

4. Now go to banking transactions and find the debit/withdrawal for the returned payment in your bank account. Record the transaction type as an Expense. Enter the customer name in the paid to/from. Make the category your A/R account, and Post.

5. Go back to the payment transaction - Sales > Customers > Select Customer and scroll down the transaction list until you find the payment that was returned. Click Edit. Check the checkbox next to the Expense you just posted. Click Record & Close.

This should show reopen the invoices and remove the "needs attention."

6. If you charged a fee for the returned payment, you can either:

- Go to Products & Services > New Product/Service > Service. Name the service "Bank Fees" assign your "bank charges & fees" expense account as the income account and save. Then return to the invoice you just reopened and add a line item for the returned payment fee you charged. Save and close.

- Or you can add an adjustment when you receive payment.

If the invoice has since been paid by another method such as wire/ACH/check and you are ready to receive payment:

7. Click +New > Receive Payment. Select the customer name, fill out payment method, Deposit to Undeposited Funds, and check the invoice that you just reopened. Adjust for the fee you charged if applicable and you did not add it directly to the invoice. Save the payment.

8. Now go back to bank transactions and a match to the payment you just created should appear with the deposit in your bank feed. Click "Match" and you're done!