I need assistance on posting an overpayment, and recording a refund for the same overpayment.

usernatasha · ‎December 20, 2022

We have received a payment from one of our customers, paying an invoice, and the rest was an overpayment send by mistake.
We did issue them a refund for the same overpayment amount.
So I need assistance on how to close the correct invoice and how and where the post the over payment. Should it be posted as credit? And then how to record the refund for the over payment?

CharleneMaeF · ‎December 20, 2022

I'll help you track the overpayment accurately, usernatasha.

Let's start by recording the refund for your customer. Here's how:

Go to + New.
Select Expense or Check.
Choose the customer you want to refund from the Payee drop-down menu.
From the Payment account drop-down menu, select the bank account to which you deposited the overpayment.
On the first line of the Category column, select Accounts Receivable.
Enter how much you want to refund in the Amount field.
Fill out the other fields, then select Save and close.

Once done, let's link the refund to the customer's credit or overpayment. I'll show you how:

Go to New, and select Receive payment.
Select the customer you used for the check or expense when recording the refund.
Fill out the other fields.
Under the Outstanding Transaction section, select the checkbox for the Expense or Check you created when recording the refund.
Make sure the payment is equal to the open balance, then select Save and close.

For more details, please see this article: Record a Customer Refund in QuickBooks Online.

Additionally, I'd recommend reconciling your accounts every month. This will help you monitor your income/expenses and detect any possible errors accordingly. You can check out this article for the detailed steps: Reconciliation Workflow.

Please don't hesitate to let me know if you have other concerns about managing invoices and payments. You can drop a comment below, and I'll gladly help. Take care, and I wish you continued success.

View solution in original post

SME Bookkeeper · ‎December 20, 2022

Hey usernatasha,

I saw your post. The followings may help you.

Step 1
>Match the Invoice from the Find match option at the Banking feed

>Match partially for that invoice.

>Turn on the Resolve l Difference button

>Add resolving transactions- Open a Chart of Accounts under Other Current liability (Customer deposit)

>Click on Save

Step 2:
If you give a refund by Bank/card then do the following

>Categorize the transaction to the Customer deposit.

So, the amount will be equal (+ & -).

Feel free to comment, if you need any further help regarding bookkeeping.

Click here if you want a bookkeeping service: [Removed]

Regards,

wsraaz

usernatasha · ‎December 20, 2022

Thank you for answering to my question, but I did not get the Step 2.

So we did issue a refund from our bank account directly, and I have the transaction pending in the bank feed for review. How should I record the refund transaction?

And since I will post the overpayment to other current liability, how to release it from that account to the refund? How to connect those transactions?

SME Bookkeeper · ‎December 20, 2022

I am happy to help you.

Tell me one thing. What do you do, when you receive an overpayment from a customer?

Go to your customer panel, and undo the payment from that invoice.

Then start the match as I mentioned earlier.

Customer Deposit - is the more suitable chart of account to hold your customer overpayment, if you are not a solicitor/property manager. If the customer makes an advance payment then it has a different scenario.

If you need a bookkeeping service for your SME/S-corporation business visit the followings.

Click here to know more: [Removed]

Regards,

WSRAAZ

CharleneMaeF · ‎December 20, 2022

I'll help you track the overpayment accurately, usernatasha.

Let's start by recording the refund for your customer. Here's how:

Go to + New.
Select Expense or Check.
Choose the customer you want to refund from the Payee drop-down menu.
From the Payment account drop-down menu, select the bank account to which you deposited the overpayment.
On the first line of the Category column, select Accounts Receivable.
Enter how much you want to refund in the Amount field.
Fill out the other fields, then select Save and close.

Once done, let's link the refund to the customer's credit or overpayment. I'll show you how:

Go to New, and select Receive payment.
Select the customer you used for the check or expense when recording the refund.
Fill out the other fields.
Under the Outstanding Transaction section, select the checkbox for the Expense or Check you created when recording the refund.
Make sure the payment is equal to the open balance, then select Save and close.

For more details, please see this article: Record a Customer Refund in QuickBooks Online.

Additionally, I'd recommend reconciling your accounts every month. This will help you monitor your income/expenses and detect any possible errors accordingly. You can check out this article for the detailed steps: Reconciliation Workflow.

Please don't hesitate to let me know if you have other concerns about managing invoices and payments. You can drop a comment below, and I'll gladly help. Take care, and I wish you continued success.

usernatasha · ‎December 21, 2022

Thank you very much!

usernatasha · ‎December 21, 2022

Thank you!

SirielJeaB · ‎December 21, 2022

You're always welcome, @usernatasha.

I'm delighted to hear that we were able to offer a solution for properly tracking the overpayment.

If you have any more questions, don't hesitate to get in touch with us. We are continuously hopeful about your company's success. Have a wonderful day, usernatasha.

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I need assistance on posting an overpayment, and recording a refund for the same overpayment.