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b-samuel-lodige-
Level 1

I paid the wrong vendor. The vendor returned the funds less banking fees and an outstanding invoice. How do I enter the transaction in Quickbooks.

The returned funds are to be posted to our banking account.
2 Comments
Mary14850
Level 2

I paid the wrong vendor. The vendor returned the funds less banking fees and an outstanding invoice. How do I enter the transaction in Quickbooks.

I have not done this is QBO.  But, here's how to fix is Desktop.  First of all,. what account did you pay the first vendor out of? If you just paid it out of the checking account to the expense account, then the deposit would go back against the expense account.  If you used the pay bill option, the you would make the deposit to the A/P account listing that vendor.  That wrong vendor should have a credit if their account if there are no outstanding bills.

When you record the deposit, use the original amount going to either the expense account, or the A/P account depending on how you originally wrote the first check.  Then pay the correct vendor. 

If you used the pay bills option, then pay bills, find the wrong vendor and apply the credit, if you paid directly to the expense account, then this step is not needed.  If the fee was $1 and your check payment was for $100, then you would record the deposit as $100 to A/P or expense account and -$1.00 to fees.

Hope QBO will allow you to do this.   Good luck.

JonpriL
Moderator

I paid the wrong vendor. The vendor returned the funds less banking fees and an outstanding invoice. How do I enter the transaction in Quickbooks.

Hello @b-samuel-lodige-,

 

You can enter a credit and a deposit for the wrong payment you made and the returned funds from your vendor. Let me show you how.

 

Let's start with a vendor credit:

  1. Go to the +New button.
  2. Under VENDORS, select Vendor credit.
  3. Select the vendor who received the wrong payment.
  4. Choose a category or item used.
  5. Enter the amount of the payment made.
  6. Click Save and close.

Then, create a deposit:

  1. Go to the +New button.
  2. Under OTHER, select Bank deposit.
  3. On the Account menu, select your bank account.
  4. Below the RECEIVED FROM column, select your vendor.
  5. Select your accounts payable account.
  6. Enter the amount.
  7. Click Save and close.

Once done, create a check to link the two transactions created:

  1. Go to the +New button.
  2. Under VENDORS, select Check.
  3. On the Payee menu, select your vendor.
  4. Select Add on both deposit and credit created.
  5. Click Save and close.

Lastly, I've also included this helpful reference for a compilation of articles you can use while working with your expense transaction: Vendors and Expenses for QuickBooks Online.

 

If you have any other concerns, please let me know in the comments below. I'll be here to lend a hand. Stay safe!

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