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Level 2

Received Underpayment

We received an underpayment from one of our customers who was doing an international money transfer to us and put the transaction charges on us, hence the underpayment.


I already had made a invoice for this customer on quickbooks with the original (not underpaid) amount.

My question is, since the transaction charges is an expense for us, should I enter it as a bill ? Can I LINK the transaction charges entered as an expense with the underpaid invoice ? Is there any way to do this.


If not, what are the correct steps to be followed in this case ?

7 Comments 7
QuickBooks Team

Received Underpayment

I'll share a way on how you can resolve the underpayment, arshia200.


Let's open the invoice and make a payment by following these steps:


  1. Go to Customers > Customer Center.
  2. Select the customer's name and open the invoice.
  3. From the Main menu, click the Receive Payments button.
  4. In the Receive Payments window, select the invoice you want to pay.
  5. Enter the underpaid amount in the Payment column. 
  6. Choose the option that applies under the UNDERPAYMENT section.
  7. Hit Save & close twice.

Please see this sample screenshot for a visual reference:




You can also read this article for more information: Get started with customer transaction workflows in QuickBooks Desktop.


For any follow-up questions, please feel free to leave a reply and I'll get back to you as soon as I can. Take care and stay safe.

Level 2

Received Underpayment

Hi, Thank you for replying

so I should leave it as an underpayment ? then what should I do with the underpaid amount ? Is there any way to link it with the money transfer expense we bore on our clients behalf ?

QuickBooks Team

Received Underpayment

Hi there, arshia200.  


Thank you for getting back to us. You can receive the underpayment once the client settled it. You can follow my colleague's steps provided above on how to receive payments.  


Also, to link the money transfer in clients behalf, you'll need to create a wash account, so you can move the money from one account to another. 


Once done, you can create a journal entry to transfer the amount from the expense to the clearing account. Here's how to that: 


  1. Go to the Company tab.
  2. Choose Make General Journal Entries.
  3. On the first line, debit the Accounts Receivable with the amount to be transferred then add the customer name in the Name column.
  4. On the next line, credit the Clearing Account.
  5. Click Save & Close

Once done, you can now link the payment to the journal entry. Let me guide you on how to do that:


  1. Go to the Customer tab.
  2. Select Customer Center.
  3. Choose the customer you're transferring the payment from, then go to the Transactions tab.
  4. Double click the payment and mark the journal entry.
  5. Click Save & Close

Though, I still recommend reaching out to your accountant to seek an opinion to prevent any discrepancy in your books.  


To learn more about how this workflow works, you can refer to this article: Create a journal entry in QuickBooks Desktop for Windows or Mac.


Post again if you have any other questions. I'm always here to help. Have a good day!

Level 1

Received Underpayment

This was so simple in the desktop version.  Do you know how to do this in QB Online? I can't figure it out and no one seems to know when I call them for help.


Thank you!


QuickBooks Team

Received Underpayment

Thanks for chiming in, Suzanne.


It looks like you have received an underpayment from a customer who incurred transaction charges during an international money transfer. To handle this situation in QuickBooks, you can follow these steps:


  1. Click + New and select Receive Payments.
  2. Enter all the payment information.
  3. Select the checkbox next to the invoice you would like the payment to be applied to.
  4. In the Deposit to field, select Undeposited funds
  5. Choose Save and close to record the transaction.


Once done, enter the fee as a negative amount on the Bank Deposits screen when depositing a payment. Here's how:


  1. Select + New and then Bank Deposits. You should see the payment you entered in the Select Existing Payments section at the top.
  2. Place a checkmark to select the payment you want to deposit.
  3. From the Add other funds to this deposit section, enter the amount of charge as a negative amount.
  4. From the Account section, select the Expense account.
  5. Verify that the deposit amount is correct.
  6. Choose Save and close to record the transaction.


Finally, if your bank is connected to QuickBooks Online, you can match the deposit with the downloaded transaction.


Please let me know if you need more help with categorizing your transactions, Suzanne. I'm always here to help. Have a good one.

Level 1

Received Underpayment

Excellent help for my situation. Thanks.

QuickBooks Team
QuickBooks Team

Received Underpayment

We appreciate you for coming back, Es65.


Thank you very much! I appreciate you taking the time to let us know that my colleague's solution was able to assist you. I also commend you for following the suggestions and utilizing all of your resources to arrive at the solution you have now.


As always, the Community is brimming with professionals who are knowledgeable in every aspect of QuickBooks, so please don't hesitate to contact us here if you have any questions. We're always happy to assist you on your way to victory. I wish you and your company continued success!

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