Recording bill payment refunds received via Paypal.

I'm here to help you handle this refund in QuickBooks Online (QBO).

First, identify the transaction corresponding to the refund in your PayPal account. Ensure you have the details handy, such as the date, transaction number, and amount.

Next, make a bank deposit in QBO to match it later in your bank feed. Here's how:

1. Go to the + New at the top right corner and select Bank Deposit under Other.
2. From the Account ▼ dropdown, choose the account you want to put the money into.
3. Select the checkbox for each transaction you want to combine.
4. Make sure the total of the selected transactions matches your deposit slip. Use your deposit slip as a reference.
5. Click Save and Close to record the transaction.

I would also suggest reaching out to your accountant to help you with choosing the correct account to use. Once the deposit appears in your bank feed, match it with the transaction you recorded in QuickBooks Online.

In the future, when reconciling your bank account in QuickBooks Online, ensure that the transactions match the corresponding deposits in your bank statement.

By following these steps, you should be able to accurately record and categorize the refund received via PayPal for bill payment in QuickBooks Online. If you have any further questions or encounter any issues, don't hesitate to post here again for assistance.

Thank you for your suggestion, however I guess I should have been more specific with my wording. We recently integrated PayPal with QuickBooks using the PayPal Connect App. The refund transactions from PayPal were downloaded and show in both the Bank account and the PayPal tabs. Normally when I receive money in my Bank account from PayPal it is recorded as a transfer from the PayPal Bank to our main Bank account then matched on the Bank account side. In this instance, when I record the transfer from the PayPal bank, it causes a negative balance to be displayed on the PayPal banking tab.  I am trying to find a way to properly record this so it will not show as a negative balance.

Sorry the App is called Connect to Paypal.

Good afternoon, @RCrawford79. 

I appreciate you coming back on this thread with some additional information.

After reviewing your screenshot and your other details, I recommend contacting our Customer Support Team for further assistance. They'll be able to look over your account with you and use a screen share tool to do that with and walk you through some more steps to help. 

Here's how: 

1. Go to the Help ? icon in the top right-hand corner.
2. Press the Contact Us button.
3. Enter your question and tap Let's talk. 
4. Scroll down and choose to Get a callback. 

It's that easy! 

Let us know how the call goes. We want to ensure that this gets taken care of as soon as possible. Have a great day!